Plant engineering, manufacturing M&A: March 2023

Bundy Group, an investment bank and advisory firm, provides an update on mergers & acquisitions and capital placement activity for companies that address the manufacturing and plant management fields.

The A3 Business Forum, an industry-leading event that took place in Orlando, Florida, in January 2023.  Domestic and international industry experts and leaders attended the multi-day event with the goal of discussing the automation and industrial technology markets today, the key drivers behind these growing segments, and how businesses can capitalize on the energy. The A3 Business Forum validated the optimism and strength of the automation industry and its various subsegments.  The trends that are occurring within industrial technology development and adoption are having a direct impact on the manufacturing and plant floors that this reader base operates within.

Bundy Group is as bullish as our team has ever been on the automation and industrial technology industries from a mergers & acquisitions (“M&A”) and capital placement perspective.  Below are our major takeaways from the A3 conference.

Robust activity in automation, industrial technology M&A markets

The Business Forum further showcased how automation and industrial technology M&A momentum continues.  These markets are in high demand from both strategic buyers and financial sponsors, which includes private equity groups and family offices. Several strategic buyers made it known they are aggressively looking for add-on acquisitions to accomplish inorganic growth. For automation and industrial technology business owners today, it continues to be a seller’s market, especially if they know how use a competitive process to their advantage and not fall prey to buyers seeking proprietary conversations.

Robotics has a bright future ahead

The momentum in automation and industrial technology is driven by numerous factors, and the robotics solutions segment is a key contributor. To further the point, North American companies ordered robots valued at $2.3 billion in 2022, an 18% increase from 2021, and the total number of robots ordered in 2022 was 44,196, an impressive 11% increase from the prior year. As one executive pointed out, the lengthy list of robotics attendees at the Business Forum was a sign of the direction the automation market was gravitating. End users are utilizing these solutions to run their operations, solve the talent gap issues and best position their companies for the future.

Warehouse automation’s importance growing

The warehouse automation segment is rivaling robotics for its contributions to the overall automation and industrial technology markets. Current Bundy Group industry work and client engagements show vigorous demand for warehouse automation solutions, and this was further supported by industry presentations and conversations at the Business Forum. Examples of warehouse automation solutions include automated sortation systems, automated storage systems, automated forklifts, and autonomous mobile robots (AMRs).

In one Business Forum presentation, Blake Griffin with Interact Analysis, an international market research firm, provided insights on warehouse automation trends.  Interact Analysis projected the warehouse automation market, which was $36 billion in 2021, to reach $77 billion by 2027, a robust 13% compounded annual growth rate. Griffin added his team, which is in constant dialogue with many of the international automation players, believes that warehouse automation will become increasingly important to automation vendor strategies.

Interact Analysis projected the warehouse automation market, which was $36 billion in 2021, to reach $77 billion by 2027. Courtesy: Interact Analysis

Machine vision solutions in demand

Another lucrative automation and industrial technology segment to note from the Business Forum is the Machine Vision market. Machine vision technology offers equipment the ability to see what it is doing and then make prompt decisions based on what it has seen.  Examples of machine vision components include cameras, lighting, optics, imaging boards, and software. Alex Shikany, VP for Business Intelligence for A3, provided relevant data regarding the Machine Vision market at the Business Forum.  The North American Machine Vision market is valued at $3.1 billion for 2022, according to Alex, and 62% of respondents in a recent A3 survey said they expect orders to increase for these solutions over the next 12 months. The Bundy Group team shares the enthusiasm for the Machine Vision segment, and we see M&A and capital placement activity validate the attractiveness of this robust sector.

Building and realizing value event

For those business owners and executives who are interested in learning more about the automation and industrial technology M&A markets and ways to increase value in their company, please consider attending our Building Value & Realizing Value workshop in New Orleans in May 2023 and will be held the day before the Control System Integrators Association Conference.

The Bundy Group team was excited not only to participate in the jam-packed informative A3 Business Forum, but to see firsthand the drive behind the current momentum in the automation industry. The Bundy Group team will be at the Control System Integrators Association Conference and the Automate Conference, both of which are in May, and looks forward to continued conversations with automation owners and executives.  We also look forward to providing updates on the state of the industry and the automation and industrial technology M&A and capital market to the Plant Engineering readers in our future monthly pieces.

The Bundy Group reported five automation transactions in the month of March. Courtesy: Bundy Group

March 2023 mergers and acquisitions

3/6/23

ScalePad, which provides asset lifecycle management automation and is backed by Integrity Growth Partners, has acquired ControlMap, a best-in-class Governance, Risk, and Compliance (GRC) platform for MSPs. Learn more.

3/1/23

Rockwell Automation, Inc. (NYSE: ROK), the world’s largest company dedicated to industrial automation and digital transformation, has  acquired Knowledge Lens. Knowledge Lens will join Rockwell’s premier digital services business, Kalypso, to accelerate transformational outcomes for more manufacturers around the world. Learn more.

3/1/23

Building Controls & Solutions (“BCS”) is joining forces with Minvalco, a leading provider of building automation systems and components based in Minneapolis, MN. This acquisition continues the execution of BCS’s strategy to grow its leading position in the North American building automation market. Learn more.

2/28/23

CORE Industrial Partners, a manufacturing, industrial technology, and industrial services-focused private equity firm, acquired D&R Machine Company, a provider of CNC precision machining solutions for the aerospace & defense market, by CORE portfolio company Cadrex Manufacturing Solutions. Learn more.

2/23/23

Rockwell Automation, Inc., the world’s largest company dedicated to industrial automation and digital transformation, announced a strategic investment in READY Robotics, a pioneering company in software-defined automation and a Rockwell Technology Partner. Learn more.

– Bundy Group is a CFE Media and Technology content partner.

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