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Mike Rosendahl

E: mrosendahl@pcecompanies.com

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Industry Trends

Apollo’s Bet on the Industrial Future

Apollo Global Management will acquire Barnes Group Inc. for $3.6 billion, offering $47.50 per share in cash, a 22% premium. The deal, approved by Barnes' board, will take the company private by early 2025, subject to shareholder and regulatory approval. This acquisition aligns with Apollo's strategy to expand its presence in the industrial sector, capitalizing on growing manufacturing demand. The deal is expected to enhance Apollo’s portfolio, positioning it to better serve the evolving needs of the industrial market, particularly in automation and supply chain solutions.1

U.S. Automakers Poised for Slight Growth in 2025

U.S. auto sales in 2025 are forecasted to grow by a modest 1.2%, reaching 16.2 million units. Despite challenges such as high vehicle prices and interest rates, the market remains resilient, fueled by strong demand for both traditional and electric vehicles. The shift toward EVs continues to gain momentum, and the market is adapting to new consumer preferences. Overall, the outlook is cautiously optimistic as automakers innovate and adapt to shifting dynamics.2

Fed Rate Cut, A Boost for Manufacturers

In December 2024, the Federal Reserve cut interest rates by 0.25 percentage points, bringing the federal funds rate to 4.25%-4.5%. This marks the third rate cut of the year, signaling the Fed’s cautious approach amid economic uncertainty. The move aims to stimulate economic growth, particularly benefiting the manufacturing sector by lowering borrowing costs for capital investments. Manufacturers are expected to invest more in technology and expansion, aiding long-term production capacity growth.3

Industrials M&A Forecast to Rise in 2025

Industrial M&A activity is expected to rise by 25% in 2025, fueled by strong demand from both strategic buyers and private equity firms. With an increasingly competitive market, buyers are eager to acquire companies with established operations, while rising investor interest suggests robust growth opportunities. Despite economic uncertainties, this heightened M&A momentum indicates confidence in the industrial sector's long-term growth prospects.4

Trump's Shaping the Future of U.S. Manufacturing and Trade

Trump’s policy shifts, particularly around tariffs and reshoring, have impacted U.S. manufacturing and distribution. The previous administration's focus on bringing production back to the U.S. incentivized domestic manufacturing but also created uncertainties in global trade. As policies evolve, manufacturers could face ongoing pressure to adjust, while reshoring efforts may benefit distribution networks by reducing reliance on overseas supply chains. The future of U.S. manufacturing depends on how these policies develop, influencing both production and trade dynamics.5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Environmental Solutions Group
  • Terex Corporation
  • $2,000.00
  • POWER Engineers, Incorporated
  • WSP Global Inc.
  • $1,780.00
  • Glatfelter Corporation
  • Magnera Corporation
  • $1,446.00
  • Orora Packaging Solutions
  • Veritiv Corporation
  • $1,200.00
  • Clearwater Paper Tissue, LLC / Consumer Product Division Facility Located in Lewiston, Idaho
  • Sofidel America Corporation
  • $1,060.00
  • Asphalt Inc., LLC
  • Construction Partners, Inc.
  • $878.00
  • North America Composites & Fuel Containment Division of Parker Hannifin Corporation
  • SK Capital Partners, LP
  • $560.00
  • Crown Technical Systems, Inc.
  • Flex Ltd.
  • $325.00
  • Mogas Industries, Inc.
  • Flowserve Corporation
  • $305.00
  • Hydradyne, LLC
  • Applied Industrial Technologies, Inc.
  • $272.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • SFS Security Fire Systems, Inc.
  • Blackford Capital Associates II, Inc.
  • n/a
  • R. H. Sheppard Co., Inc.
    International Corporation
  • Balmoral Funds LLC
  • n/a
  • T BAILEY, LLC
  • Saothair Capital Partners, LLC
  • n/a
  • KKSP Precision Machining, LLC
  • Red Arts Capital Management, LLC
  • n/a
  • Landmark Structures I, L.P.
  • Cerberus Capital Management, L.P.
  • n/a
  • Fumex, LLC
  • Vance Street Management LLC
  • n/a
  • BNP Associates, Inc.
  • Godspeed Capital Management LP
  • n/a
  • Consumer Crusaders, Inc.
  • Crossplane Capital Management, LP
  • n/a
  • System Seals, Inc.
  • Vance Street Management LLC
  • n/a
  • World Water Works, Inc.
  • Backcast Partners, LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • BCC Engineering, LLC
  • Parsons Corporation
  • $230.00
  • Business of Cook Medical Holdings Llc
  • Merit Medical Systems, Inc.
  • $210.00
  • Kellstrom Aerospace, LLC
  • VSE Corporation
  • $201.00
  • Lifoam Industries, LLC
  • Foam Fabricators, Inc
  • $137.00
  • Pine Bluff and extrusion facility of Evergreen Packaging, LLC
  • Suzano S.A.
  • $110.00
  • G&F Manufacturing, LLC
  • Pentair plc
  • $108.00
  • Philly Shipyard, Inc.
  • Hanwha Ocean Co., Ltd.; Hanwha Systems Co., Ltd.
  • $100.00
  • Industrial packaging operations of TC Transcontinental Packaging Inc.
  • Hood Packaging Corporation
  • $95.00
  • Tampa Bay Steel Corp.
  • Russel Metals Inc.
  • $80.00
  • Bloom Engineering Company, Inc.
  • Westinghouse Air Brake Technologies Corporation
  • $69.00
  • ElDorado National - California, Inc.
  • Rivaz, Inc.
  • $52.00

 

Source S&P Capital IQ as of 1/17/2025 and PCE Proprietary Data

PCE Transactions

Contacts

Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Ken Sommers

Denver Office

303-276-7985 |

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Michael Poole

Orlando Office

407-621-2112 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. William Pitts, “Barnes Group to Be Acquired by Apollo Funds for $3.6 Billion.” Barnes, October 7, 2024.
  2. 2. Michael Wayland, “U.S. auto sales next year expected to be best since 2019.’” CNBC, December 18, 2024.
  3. 3. Rob White, “Fed cuts key interest rate but signals elevated inflation is likely to persist.” NBC News, December 18, 2024.
  4. 4. Michael Schoeck, “Industrials M&A activity to increase ~25% in 2025.” PEHub, December 12, 2024.
  5. 5. Kevin Rhode, “Trump’s Policy Shifts: What’s Ahead for U.S. Manufacturing & Distribution.” The Bonadio Group, November 13, 2024.
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