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Manufacturing & Industrial
Many of Orion Capital Group’s most recent deals have involved the distribution and industrial services sector. This can be attributed to the fact that many strong companies in this arena have taken advantage of their strength and sold at times when they could command high multiples. Our principals are familiar with the best practices in supply chain management, logistics, global sourcing, and enterprise resources planning (ERP) tools.
Orion Capital Group has also helped many U.S. buyers in this sector acquire foreign manufacturing, distribution, and quality control facilities. In fact, Orion Capital Group is one of the few foreign merger and acquisition advisory firms with professionals in China and India.
Orion Capital Group has also performed exit planning for manufacturing and industrial service businesses that have been squeezed by lower margins due to increasing fuel, energy, and commodity prices. Again, Orion Capital Group’s experience in India and China has helped many companies who are not ready to acquire foreign companies find alternative sources for production, manufacturing, and quality control issues.
Because Orion Capital Group is intimately familiar with assisting clients develop world class performance, we are uniquely positioned to help sellers in this sector find value in places that other advisory firms would not even think about looking. In early strategy sessions for many of our clients in this sector, Orion Capital Group has advised and managed Business Process Reengineering plans. These plans have helped sellers achieve increased internal rates of return, in addition to identifying and emphasizing value that is marketed to future buyers. These practices have included:
- Value Stream Mapping
- Best Practices
- Work Flow Analysis/Assessment
- Business Process Redesign
- Information Systems Effectiveness
- Operational Strategy Development
- Benchmarking
- ERP Faciliatation
Whether your business is manufacturing or industrial services, Orion Capital Group is uniquely familiar with helping you find value and finding strategic partners realize what that value will mean for them.
Recent M&A Trends
The lower middle-market (deals under $100 million) has weathered the credit freeze and "Great Recession" better than the upper middle market has. The deal landscape for the middle market has changed as Wall Street has struggled, but so far, deals are getting done.
The biggest change has been in the deals has been valuations, reliance on debt and reliance on the seller to finance part of the deal. We have seen an increased use of earn-outs, which are typically used in periods where interest rates are high or credit is tight. Thus, PE groups have not stopped investing, and in fact are aggressively trying to deploy their capital into middle-market companies.
As profits are returning, many strategic buyers are more willing to use their cash reserves to purchase various technologies or intangibles that are of synergistic value to them.
Depending on your situation, now could be a good time to seek an exit or even plan for an exit several years down the road. For those that want top dollar for their company and know it will achieve strong, consistent growth for many years, now is definitely not the right time to sell. While valuations may be down, there are many creative ways of structuring deals that may not affect your end proceeds much.
Therefore, if you are a business owner looking to sell, do not avoid doing so due to market conditions. While current market conditions might require a more nuanced approach, the directors at Orion Capital Group have the experience to help you weather these current changes.
If you would like to learn more about Orion Capital Group, please contact us by your prefered means. Any mode of communication is held strictly confidential.
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