Developing technology—and value—within the manufacturing and distribution industry


The U.S. manufacturing and distribution industry has benefited a great deal from technological advancements, developing from a human assembly line into modern-day factories, which employ automated processes and advanced robotics, along with the traditional methods. Danielle Fugazy, in a recent article for Mergers & Acquisitions, explains that “as a result of these advancements private equity firms and strategic acquirers have been snapping up manufacturing and distribution companies.” She guides readers through five areas where this trend is quite prominent:

  1. Process Automation—Manufacturers are constantly striving to stay up-to-date on technological advancements because of the efficiency boost that they are able to provide. Fugazy offers the example of Tesla, which recently acquired Grohmann Engineering, a manufacturer of unique and efficient engine equipment.
  2. Automobiles—This industry has a history of being at the forefront of manufacturing and distribution innovation. Strategic acquirers are rushing to buy up manufacturing and distribution companies whose technology they hope will be attractive to bigger companies, like Ford and Tesla; they hope a quick turnover of the manufacturer will result in big profits for them.
  3. Aerospace—While aerospace and defense had a disappointing 2016, as per industry analysts, the end of the year did show a 73% increase in deal activity, which signals a future upswing.
  4. Medical Devices—Fugazy explains that “demand for more personalized treatment options, an increasing aging population and constantly changing technology has kept medical device manufacturers distributors busy.” In addition, important technological advances within the field, such as custom-made braces based on a digital scan of patients’ mouths, shave time and expense, increasing the value of medical device companies.
  5. Precision Machining—The ability to produce extremely accurate products is enabled by the use of precise, computer-controlled equipment. This technology is growing more capable every day.

For more details, read the article in its entirety at Mergers & Acquisitions.