C EO M & A SU MMI T
THE NEW DEAL
FOR DEALS
A surge in manufacturing M&A activity is underway. Business leaders shared perspectives at Chief Executive’s Dealmakers Forum 2021. Some takeaways. BY DALE BUSS THE APPETITE FOR MERGERS AND acquisitions on both sides of the manufacturing business is immense these days. It’s fueled by pent-up demand from the Covid pause, the robust post-pandemic U.S. economy, the continued availability of ample and cheap capital, the rethinking of supply chains, the imperative for digital transformation, the fast-rising ESG agenda and the arrival of thousands more business owners every year to the portals of retirement. So, when Chief Executive hosted Manufacturing M&A: Dealmakers Forum 2021 recently, we found an engaged group of mid-mar“We’re bullish on this being a ket manufacturing owners strong M&A year.” and executives who were —Dena Jalbert, Founder and CEO, eager for inspiration and Align Business Advisory Services guidance about how to navigate this surprisingly fertile new era for selling and buying companies. The value of global M&A activity dipped below $2 trillion in 2020, to about $1.7 trillion, for the first time in several years. But particularly for manufacturing, the second half of 2020 brought a rebound in activity. “And we expect that to continue in 2021,” said Dena Jalbert, founder and CEO of Align Business Advisory Services, a con-
48 / CHIEFEXECUTIVE.NET / SUMMER 2021
sulting firm in Winter Park, Florida. “We’re bullish on this being a strong M&A year.” In particular, she said, volume has grown for “downstream” transactions in lower, mid-lower and mid-market segments whose share of deals has grown versus larger deals. Shearman & Sterling’s George Casey concurred. “The M&A market now is up and running again,” said the global managing partner of the New York-based business law firm. While coronavirus-related production halts and supply-chain disruptions basically ground manufacturing M&A to a halt a year ago, Jalbert added, a second-half rebound last year is continuing its climb in 2021. A snap poll of Forum attendees ratified these prospects: fully 38 percent of them said they’re “ready to buy,” with an acquisition in their crosshairs at the moment, and a significant additional cohort responded that they’re “waiting and watching for now.” And the aim of 56 percent of attendees, answering another poll question, is to use M&A to enter new markets, geographies and customer groups; the second most popular reason is to cut costs, build economies of scale and enhance products suites to sell to existing customers. Nearly one-quarter of respondents were seeking to purchase access to a key technology. Seizing Control Supply chains have burgeoned as a focus of M&A activity because so many companies
