Industrial Automation Valuations Down A Bit, But Sector Remains Relatively Strong
Economic instability may be the biggest challenge to the activity with inflation and interest rate issues still looming large, but this will likely have a more significant effect on M&A in general, vs. the IA M&A market.
Even with this relative market strength, we do forecast continued valuation rationalization from the highs leading up to 2022 as the cost of capital has increased, leading acquirers to reduce acquisition costs to drive the same IRR as in 2021.
Highlights from the report:
- Industrial Automation acquisitions for Q4 2022 were lower than numbers from the same quarter over the past 5 years. This decrease in activity matches M&A trends across all industries for Q4 2022.
- Q4 of 2022 was down from Q4 of 2021, and was the lowest volume quarter of 2022.
- Transaction numbers for the year show overall healthy activity. Transaction activity within the industry is expected to remain positive in 2023.
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