Subscribe to our free, weekly email newsletter!



Behind the materials handling M&A boom

By Bob Trebilcock, Executive Editor
March 01, 2011

On Friday, I wrote a column about the M&A boom in the materials handling industry.

I also had a chance to talk to Robin Bear, vice president of the DAK Group, an investment bank that specializes in mergers and acquisitions for the mid-market. Although Bear did not discuss specifics of the recent acquisition of Retrotech by Savoye, the DAK Group was involved in that deal.

Bear identified five trends for the recent interest in our space, which she expects to continue.

The deal is strategic: By that, Bear is referring to a combination of products, services or geography where the two companies together are greater than the sum of their parts. “A strategic acquirer will pay more for your company than a private equity shop because there’s more intrinsic value and the return is so much better for both companies,” Bear says.

The world is flat: With apologies to Thomas Friedman, the globalization of business is having an effect on our industry. “You’ve got foreign companies that are keenly interested in investing in US companies,” says Bear. “The US firm gains access to foreign capital and the foreign acquirer gains immediate access to the US market without having to send someone over to open a US office. That’s really important to them.”

Service is king: Bear sees a continued interest by manufacturing companies in acquiring service-oriented businesses to create new streams of revenue and to become even more important to their customers.

Niche expertise is a close second to service: According to Bear, companies with a niche expertise that can open up new areas of business for the acquiring company are valued. “Companies that have significant market share in a segmented portion of the market are valuable to acquiring companies,” she says.

End users now understand the value of materials handling: “An industry with bright prospects is going to attract M&A activity,” says Bear. “Some overall business trends such as the greater emphasis on the distribution network, the emphasis on greener and more efficient warehousing all point to continued growth in the materials handling industry. That’s going to lead to M&A activity.”

 

About the Author

Bob Trebilcock
Executive Editor

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. More recently, Trebilcock became editorial director of Supply Chain Management Review. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.


Subscribe to Modern Materials Handling magazine

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Recent Entries

During this complimentary webcast you'll learn the 6 reasons your operation could benefit from voice and multi-modal solutions and exactly how The Container Store did it. They were able to improve efficiency, safety and accuracy, without a complete WMS overhaul and their employees find it faster and easier to use.

Study suggests solutions for filling the talent gap, including the development of robust ties with the education system.

Global business optimism reaches highest level in survey history.

Mentor-based program aims to help students develop STEM skills and foster innovation, self-confidence, communication and leadership.

Consumer preferences suggest businesses should reconsider chasing the Amazon model.

Article Topics

Blogs · Automation · DAK Group · All topics

About the Author

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. Contact Bob Trebilcock.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA