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The Blueprint – May 2021

By Emily Halstenberg | May 17, 2021

The Blueprint – May 2021
Actionable Intelligence for Leaders in the Architecture, Engineering, Environmental, Geospatial, and Construction Services Industries

Over the last twelve months, the pandemic has significantly affected manufacturing and supply chains, forcing companies to rethink their investment strategy. The first phase for companies was reacting to the emergency situation and trying to enact the initiatives necessary to protect their business. The objective began as simply business continuity and workforce protection. The next phase was a substantial hold of any significant investment while trying to understand what was going to happen. Companies began to realize the modifications they implemented during the first phase would not go away quickly. The third phase started with companies realizing this emergency was going to last long enough to create permanent changes in the market. The organization needed not only to react but to start planning for a new market and a change in consumer habits. The final phase is where we are now. Companies are focused on implementing a strategy that adapts and shapes their new market. A major part of this new strategy is implementing Industrial IoT (IIoT) into the supply chain. Analysts predict a 30% CAGR in the adoption of IIoT solutions over the next few years as organizations adapt to and shape the new market.

IIoT has three characteristics that help organizations adapt and shape the new market. IIoT is more agile and can be scaled quickly without heavy infrastructures. It’s also easy to connect to your current factory, transforming existing production environments by increasing operational visibility, connecting legacy machines, and connecting a remote workforce. The third benefit is that IIoT is fast to implement and roll out. This means results can be collected faster and be extended to multiple areas or plants faster and with lower investment.

Over the past twelve months, Industrial Automation stocks have been rising with the overall market. Since the end of October, the overall market and the Industrial Automation index have risen sharply. Industrial Automation stocks have continued to rise so far in 2021 and are hovering around 80% higher than last May. Revenue multiples have stayed in between 6x – 7x since January and are currently around 6x. EBITDA multiples have been around 25x since January of this year.

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7 Mile Advisors provides Investment Banking & Advisory Services to the Business Services & Technology industries globally. 7 Mile Advisors advises on M&A and private capital transactions, and provides market assessments and benchmarking. As a close-knit team with a long history together and a laser focus on our target markets, 7 Mile Advisors helps its clients sell companies, raise capital, grow through acquisitions, and evaluate new markets. For more information, including research on the M&A markets, visit www.7mileadvisors.com.

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