At GreenLeaf, we have access to Industry research that is often helpful, to students, bankers, investors, manufacturers, suppliers, entrepreneurs, journalist and others that monitor the pulse of the industry. So, we will begin sharing research and white papers from sources across the industry. To start, we will share two Industry Snapshots from SRR that cover Fall and Winter of 2014. SRR tends to view the industry through the lens of the investment, banking & ownership community, so it is a unique perspective. After part 2, we will add additional sources and specifically research covering the 2015+ time period. This is Part 1 of 2, enjoy.
Fall 2014 Plastics Industry Snapshot
Plastics Industry Highlights
- There continues to be strong demand for plastic companies across all end markets and manufacturing processes.
- Plastics M&A volume increased approximately 16% during the first half of 2014 relative to the first half of 2013 and approximately 11% during the second quarter of 2014, year-over-year.
- Industrial plastics continues to represent the largest number of transactions with 59% of the volume followed by plastic packaging at 25% and automotive plastics and medical plastics at 9% and 8%, respectively.
- Automotive plastics saw the largest growth during the first half of 2014 with a 143% increase in transaction volume, followed by plastic packaging at 48%, and medical plastics and industrial plastics at 7% and 1%, respectively.
- From a manufacturing process perspective, significant growth in transaction volume occurred during the first half of 2014 in prototyping and blow molding, which increased 350% and 300%, respectively. Other strong sectors include injection molding, which increased 57% as well as rotational molding and tool & die, which increased 33% and 20%, respectively.
- M&A transaction activity by financial and strategic buyers increased 23% and 20%, respectively, while hybrid buyers (PEowned strategics) declined 3%.
- The sale of privately owned plastic business increased 23% during the first half of 2014, while corporate and private equity sellers increased 10% and 7%, respectively.
- There are a number of factors and industry dynamics that continue to have a positive impact on M&A activity within the plastics industry.
- High demand for quality acquisition targets and a general imbalance in transaction volumes (i.e., more buyers than sellers)
- Significant availability of capital (debt and equity) for both small and large transactions
- Positive outlook for most end markets, including traditionally cyclical sectors, many of which are on the upswing in the cycle
- Positive macroeconomic trends
- Valuation multiples continue to be at multi-year highs across each of the plastic end market sectors.
Click to view the full report on their website.
About SRR: SRR is a global financial advisory firm specializing in Investment Banking, Valuation & Financial Opinions, and Dispute Advisory & Forensic Services.
About GreenLeaf: GreenLeaf Industries is an ISO 9001 registered manufacturer that consistently adheres to all its standards to provide our clients with consistent, reliable, quality automotive and industrial plastic parts. We are an American injection molding company, unafraid to compete in the world market and determined to succeed. Established in 1999, we take pride in our high-quality craftsmanship and superior customer service. Visit us:
310 Bussell Ferry Road
Lenoir City, TN 37771