New Opportunities in Industrial M&A: The Rise of Reshoring
There has been no shortage of supply chain disruptions in our post-pandemic landscape. Rising geopolitical instability, international restrictions, labor disputes: these are just some of the reasons why the global supply chain may face challenges, especially in the industrial and manufacturing industries. But now there’s been a new trend in industrial M&A as manufacturers try to tackle these supply chain problems: an increase in reshoring opportunities.
Within the last few years, a rising number of North American manufacturers have decided to bring their operations back to the continent. Here, we’ll dive into the advantages of this reshoring trend and how MelCap can help facilitate industrial M&A transactions so you can capitalize on these opportunities.
Interested in learning more about MelCap Partners and our M&A experience? Explore a list of our successful transactions here.
The Advantages of Reshoring
In a staggering statistic, research reveals that one long-term supply chain disruption could cost companies 30-50% of a year’s EBITDA. Reshoring is one way that manufacturers can try to mitigate these losses. In addition to saving money, they can save time by moving production closer to home.
Saving money, saving time, and bringing more jobs to local companies: it’s clear that there are several strong benefits to reshoring. About 70% of manufacturers are planning on prioritizing US-based manufacturing. How does this impact industrial M&A? And how can MelCap Partners help you take advantage of these opportunities?
New Trends in Industrial M&A
Several industrial sectors are growing due to reshoring, like building products and materials, packaging, and engineered equipment. As a result, many private equity firms have found new opportunities in industrial M&A by partnering with different manufacturing companies.
In addition, reshoring has illuminated a growing need for automated production equipment. Automation, robotics, and other high-tech solutions improve productivity and efficiency, and as a result, private equity firms have set their sights on companies that are fostering this technological innovation to help facilitate reshoring production.
These companies are focused on improving production processes and increasing automation, especially in the face of rising labor shortages. One area where tech companies might aim to find innovative solutions to production problems is maintenance and improving equipment functionality. Many private equity firms are finding increasing transaction success in industrial M&A due to reshoring and growing technological progress.
At MelCap Partners, We Provide Industrial M&A Support
We’re proud of our industrial sector expertise and have supported industrial M&A transactions for numerous markets, including stamping, machining, fabrication, and foundries. For over 25 years, MelCap Partners has adopted a customer-first approach to M&A, and we understand the importance of supporting your transaction goals.
At MelCap, we stay on the forefront of the M&A world, and reshoring has led to a variety of new industrial M&A opportunities for our clients. With our comprehensive investment banking and advisory services, you can entrust your most important transaction with our expert team.
