SHIFTING PROFIT POOLS DRIVE M&A

Developments accelerated by global developments 2019-2023

• This report focuses on industrial system integration / automation of production systems in Europe
• Production processes are impacted by social, political and technological developments, fueling a sustainable market growth of €8bn to reach an annual size of €33bn in 2027
• Key drivers are skilled labor shortage, (political agenda driven) near-shoring & supply chain adaptions and cost pressure as well as technical innovations
• Suppliers adapt their offering as 95% of market participants expect profit pools to change
• Consolidation commences in a fragmented market, as suppliers use M&A to meet those opportunities
• Financial investors pursue buy & build strategies on the back of the flourishing industry and propel consolidation
• High transaction activity with >500 deals in the past 4 years (with European targets only) across all end-markets and applications
• Slowed acquisition pace in 2020 (Covid driven) and 2022 (Ukraine crisis) is expected to pick up in 2023
• The industry significantly outperforms the overall stock market by 60& over 4 years – attracting further investments
• Key consolidators sustainably more than 5-folded revenues & reached mid-teens EBITDA margins in just 10 years, boosting their valuations to >15x EBITDA
• Average valuations at ~1x sales and ~11x EBITDA, strongly dependent on activity and end-market served

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