|By PR Newswire||
|November 8, 2012 11:50 AM EST||
NEW YORK, Nov. 8, 2012 /PRNewswire/ -- Overall merger & acquisition (M&A) activity in the global industrial products (IP) industry remained suppressed during the third quarter of 2012, as management teams remain cautious given ongoing global economic uncertainty, according to a series of quarterly M&A reports released today by PwC US. Across the entire IP industry, there were 164 transactions worth $50 million or more totaling $81 billion in the third quarter of 2012, compared to 197 deals and $96.2 billion in total value during the same period in 2011. PwC's IP practice examined activity in the third quarter of 2012 across six sectors: aerospace & defense (A&D), chemicals, engineering & construction, industrial manufacturing, metals and transportation & logistics.
Given the restrained M&A environment, industrial products companies have continued to focus on restructuring and rightsizing operations. In line with this trend, deal activity in the third quarter of 2012 continued to include a high proportion of divestitures as companies sought to eliminate underperforming operations, as well as trim their exposure to slowing economies. For example, in the A&D sector, 71 percent of deals worth $50 million or more involved divestitures during the third quarter, largely driven by defense companies divesting their non-strategic, industrial units.
In addition, local deals continued to represent the majority, or 55 percent, of transactions across the IP sector during the third quarter, as companies focused on consolidating operations and driving synergies. Asia and Oceania continued to attract the highest number of deals.
"The M&A environment across the global industrial products industry remained subdued during the third quarter, given a range of concerns including the ongoing Eurozone crisis, slower growth in emerging markets and uncertainty regarding budget issues in the U.S.," said Robert McCutcheon, U.S. industrial products industry leader for PwC. "Strategic investors remain the primary driver of deal activity as they take advantage of their strong balance sheets and attractive deal multiples to execute their long-term expansion plans. M&A activity will likely remain at low levels for most IP segments for the remainder of the year as management teams carefully evaluate macro-economic developments and the near-term impact on their businesses."
Mega deals (transactions worth more than $1 billion) remain below 2011 levels and overall deal activity continues to be driven by smaller transactions (less than $50 million), consistent with the second quarter of 2012. There were a total of 18 mega deals across the IP industry during the third quarter of 2012, representing only one percent of total deal volume. For perspective, the metals industry had no mega deals in the third quarter and had only two deals valued at more than $500 million. In addition, the A&D sector also recorded only one mega deal for all of 2012 thus far and that transaction was canceled.
The industrial manufacturing sector bucked that trend in the third quarter with six mega deals, which helped to support a surge in transaction value to $25 billion, up from $19 billion in the previous quarter. Despite a generally challenging macro-economic climate globally, the improved financial health of many corporations, as well as growth prospects in attractive niche product and geographic markets were among the likely drivers for the acceleration in deal activity in third quarter. The chemicals industry was also active with four mega deals, growing almost threefold to $11.7 billion compared to the second quarter of 2012.
Strategic investors drove the majority of deal activity across the industry, reflecting their focus on longer-term investment initiatives, while financial acquirers largely remained on the sidelines given near-term economic uncertainty coupled with their shorter-term approach to transactions. Across all IP sectors, nearly 70 percent of deals worth more than $50 million involved strategic investors in the third quarter of 2012. Leading the pack, strategic investors represented 86 percent of third quarter deal activity in the A&D sector, followed by 77 percent in the industrial manufacturing sector and 70 percent in the engineering and construction segment. The notable exception was in the transportation and logistics sector, where financial investors represented 43 percent of deal volume during the third quarter.
Reduced deal flow has further bolstered company balance sheets across multiple sectors, potentially boding well for future M&A activity. "We are seeing a considerable number of investors who are taking a wait-and-see approach to M&A, as they closely monitor global economic and geo-political trends," noted McCutcheon. "Meanwhile, liquidity remains healthy with average cash positions increasing and debt-to-capital levels continuing to decline among many companies across multiple sectors. Given slowing growth globally, these companies may ultimately put their cash to work in new ventures, which should result in an uptick in M&A activity."
The U.S. continued to attract notable interest in the IP M&A market given a range of positive factors including a more stable economy than many other countries, modest GDP growth, a strengthening currency and the emerging benefits of increased shale gas production in multiple sectors.
"As China's economy continues to slow down and Europe deals with the ongoing sovereign debt crisis, the U.S. has become increasingly attractive to global companies searching for quality, inorganic growth options," McCutcheon added.
Looking at select sectors, deal activity in the metals industry dropped significantly in the third quarter of 2012. Total metals industry deal value of $3.8 billion was down from total value of $9.1 billion in the third quarter of last year, representing the lowest level in three years. This sector M&A activity is on pace to decline by as much as 50 percent for the full year. In addition to the impact of the uncertain global macro-economic outlook, companies are not expected to accelerate acquisitions until declining base metals prices stabilize and supply starts to keep pace with demand.
Deal activity was also particularly sluggish in the engineering and construction industry, which has continued to lag well behind that of the previous two years. Based on year-to-date activity, it remains unlikely that the segment will reach 2011 M&A levels. Conversely, deal activity in the transportation and logistics sector remained healthy despite a small drop in overall volume. However, total transportation and logistics deal value of $15.3 billion increased from $13.6 billion in the second quarter of 2012 given an increase in mega deals during the third quarter.
About PwC's Industrial Products practice
PwC's Industrial Products (IP) practice provides financial, operational, and strategic services to global organizations across the aerospace & defense (A&D), business services, chemicals, engineering & construction (E&C), forest, paper, & packaging (FPP), industrial manufacturing, metals, and transportation & logistics (T&L) industries. For more information please visit: www.pwc.com/us/en/industrial-products
About the PwC Network
PwC firms help organizations and individuals create the value they're looking for. We're a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.
Learn more about PwC by following us online: @PwC_LLP, YouTube, LinkedIn, Facebook and Google +.
© 2012 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
SOURCE PwC US
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Sep. 24, 2016 04:30 PM EDT Reads: 1,468
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
Sep. 24, 2016 04:15 PM EDT Reads: 1,521
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Sep. 24, 2016 03:45 PM EDT Reads: 1,393
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Sep. 24, 2016 03:00 PM EDT Reads: 1,011
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
Sep. 24, 2016 02:15 PM EDT Reads: 1,178
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
Sep. 24, 2016 02:00 PM EDT Reads: 1,613
SYS-CON Events announced today that China Unicom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE F...
Sep. 24, 2016 01:30 PM EDT Reads: 1,667
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
Sep. 24, 2016 01:00 PM EDT Reads: 1,465
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Sep. 24, 2016 12:00 PM EDT Reads: 724
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Sep. 24, 2016 12:00 PM EDT Reads: 722
Digital innovation is the next big wave of business transformation based on digital technologies of which IoT and Big Data are key components, For example: Business boundary innovation is a challenge to excavate third-party business value using IoT and BigData, like Nest Business structure innovation may propose re-building business structure from scratch, as Uber does in the taxicab industry The social model innovation is also a big challenge to the new social architecture with the design fr...
Sep. 24, 2016 11:45 AM EDT Reads: 1,014
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
Sep. 24, 2016 11:15 AM EDT Reads: 1,441
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
Sep. 24, 2016 10:45 AM EDT Reads: 1,712
IoT is fundamentally transforming the auto industry, turning the vehicle into a hub for connected services, including safety, infotainment and usage-based insurance. Auto manufacturers – and businesses across all verticals – have built an entire ecosystem around the Connected Car, creating new customer touch points and revenue streams. In his session at @ThingsExpo, Macario Namie, Head of IoT Strategy at Cisco Jasper, will share real-world examples of how IoT transforms the car from a static p...
Sep. 24, 2016 10:30 AM EDT Reads: 1,452
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
Sep. 24, 2016 10:00 AM EDT Reads: 888
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the protocols that communicate data and the emerging data analy...
Sep. 24, 2016 09:00 AM EDT Reads: 1,512
Video experiences should be unique and exciting! But that doesn’t mean you need to patch all the pieces yourself. Users demand rich and engaging experiences and new ways to connect with you. But creating robust video applications at scale can be complicated, time-consuming and expensive. In his session at @ThingsExpo, Zohar Babin, Vice President of Platform, Ecosystem and Community at Kaltura, will discuss how VPaaS enables you to move fast, creating scalable video experiences that reach your...
Sep. 24, 2016 09:00 AM EDT Reads: 747
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Sep. 24, 2016 08:30 AM EDT Reads: 2,753
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
Sep. 24, 2016 07:00 AM EDT Reads: 1,461
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Sep. 24, 2016 06:30 AM EDT Reads: 3,310