The following is an analysis of Global Industrial Manufacturing deals with disclosed values greater than $50 million.
The Global Industrial Manufacturing sector closed 2016 with two strong quarters of deal activity. The deal market in the first half of 2016 was suppressed primarily due to geopolitical concerns such as Brexit, slowing growth in China, and the impending US presidential election.
Although 2016 finished strong, deal value ended down 3% and volume ended down 18% compared to 2015, principally driven by the softness in the deal market in the first half of the year.
The largest deal in 2016 was valued at $22.7 billion, which occurred in Q1 of 2016. This drove the average deal size to $404 million from $342 million in 2015.
With two consecutive quarters of improved deal activity (both value and volume), we are optimistic 2017 will likely be a good environment for deal makers. The speculation of reduced tax rates, infrastructure investment, health care reform, and reduced government regulation in the US are positive factors for many deal makers. Further, similar to 2016, deal making in 2017 will be driven by inorganic growth strategies focused on product and service differentiation through access to new markets, customers, and technologies.
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