Machinery

Machinery

Market uncertainties mean realised company values have been dragged down, despite valuation multiples remaining unchanged. Within the machinery & components sector, valuation multiples in the automation, digitalization, robotics, and environmental technology sectors have remained relatively stable, whereas traditional mechanical engineering companies that supply solely to the automotive sector (combustion engine construction), for example, have had to realise lower valuation multiples. Internationalization and market consolidation are primarily driving M&A deals in industrial machinery and components. Digitalization, automation, robotics, environmental technology, and energy and resource conservation in the manufacturing process are all important topics.

Market View

• Machine and component manufacturers were not only directly impacted by the shutdown in spring 2020, but also by disrupted supply chains and unused capacity at their buyers. Some market players’ appetites have been temporarily muted as a result of this.
• Internationalization and market consolidation are primarily driving M&A deals in industrial machinery and components. Digitalization, automation, robotics, environmental technology, and energy and resource conservation in the manufacturing process are all important topics.
• High levels of digitalization, IoT, Industry 4.0, energy efficiency, exciting growth prospects, and worldwide consumers without one-sided dependence can all contribute to higher purchase prices. Low purchase prices are typically paid for enterprises with a low level of product digitisation, or a low level of innovation, as well as a strong reliance on cyclical sectors.
• If target companies have suffered from the epidemic in terms of liquidity but are solid at their core, the market is currently interesting for buyers. The current low interest rates provide a favourable market environment for acquisition finance.

Market Outlook