Industrials: a variety of opportunities
We’ve seen a lot of activity and interest in fire safety over the last year and while opportunities in this sector remain, it’s not all about fire. Other areas such as TICC, infrastructure services, renewables and facilities management remain attractive for PE, and there are several other sectors that are active as well.
Here are some areas we’re hearing increasing chatter on…
- Utilities & infrastructure services: these include everything from maintenance and testing to environmental consulting and comprise of a variety of business models that vary in levels of attractiveness to private equity. Ageing infrastructure and increasing regulation is driving demand across residential, commercial and industrial sub-sectors.
- Facilities management (FM): there are several FM businesses coming to market. In a fragmented and low-growth sector, investors need to have confidence in the achievability of above-market returns, whether organic or acquisitive. To find out more, read Brandon’s recent article, Facilities Management: Growth from solid foundations here.
- TICC: interest remains high in this sector due to the compliance-led nature of the services provided, the potential for recurring revenue and the fragmented market offering opportunities for buy-and-build. However, there are few providers of scale to provide a platform for M&A.
- Automotive: there are assets on the market in areas such as bodybuilding, EV manufacturing and specialist components. Supply chain issues appear to have eased in the sector, and short-term growth is expected. However, investors need to be comfortable with long-term prospects within the specific niches served by the target company.
- Niche manufacturing: Armstrong has long been a fan of UK-based, low volume and high value niche manufacturing businesses. We have seen several over the years that have built a sustainable competitive advantage versus lower cost competition. These tend to be businesses supplying mission critical products or components into end markets such as aerospace, transportation, medical or energy.
- Energy: along with renewables, which takes up a lot of investor attention, there are businesses which operate in areas such as gensets and oil & gas products and services seeing sustainable demand. Whilst the focus is on renewables, more traditional sources of energy are a long way from obsolete, even if investors and management teams are likely to have one eye on transitioning away from these areas over the medium/long term.
Please speak to the team about opportunities in Industrials.
Matt McNallyEmail Matt
Brandon MatthewsEmail Brandon