The Blueprint – May 2021
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.
The Download
The best articles from around the web for AEC industry leaders.
- Why IIoT Demand Continues to Grow via Automation World
- Google Cloud and Siemens Target the Manufacturing Industries via Automation World
- Leverage Your Existing OT System As You Create Your Digital Transformation Roadmap via Automation World
- 5 Ways Automating the Manufacturing Process can Save you Money via Robotics & Automation News
- What Does Industry 4.0 Mean for Data Analytics? via Manufacturing Tomorrow
Transaction Talk
Insights and intelligence on recent notable industry transactions.
Source: Google Images
- Sole Source Capital LLC, an industrial-focused private equity firm, announced that its portfolio company, Peak-Ryzex, a value-added reseller of barcoding and data collection solutions to customers across North America, has acquired Inovity Inc. The acquisition of Inovity marks Sole Source’s seventh investment in the AIDC space following the April merger of Peak-Ryzex and Optical Phusion Inc. “We are very excited to welcome Jack and Steve and the great organization at Inovity to our team, and look forward to leveraging their veteran industry experience,” said Juliann Larimer, President, and CEO of Peak-Ryzex. Details of the transaction were not disclosed.
- Accenture (NYSE: ACN) has acquired Electro 80, a leading provider of operational technology (OT) for resources clients in Australia, including mining, energy, engineering, construction, and utilities companies. The acquisition expands Accenture’s local digital OT capabilities, which help asset-intensive companies make manufacturing and production operations safer and more efficient. The acquisition also strengthens Accenture’s local capabilities for Industry X, which helps clients digitize their manufacturing, operations, and engineering. “Resources and asset-intensive companies are increasingly looking for ways to deliver more with less and, at the same time, in a more sustainable way,” said Tara Brady, Market Unit Lead for Accenture in Australia and New Zealand. “Digital and automation technologies will be fundamental in delivering these outcomes and we are delighted to have Electro 80 on board.” Details of the transaction were not disclosed.
- Accenture (NYSE: ACN) has agreed to acquire Pollux, a provider of industrial robotics and automation solutions, headquartered in Joinville, Brazil. The acquisition will expand Accenture’s capabilities for clients in Consumer Goods, Pharmaceutical, and Automotive industries seeking to make their factories, plants, and supply chains more productive, safe, and sustainable. Pollux provides solutions to optimize manufacturing and logistics processes. The company designs, engineers, and deploys fully functional assembly lines that include robots and other hardware, plus the software that controls them. Pollux also offers visual analytics inspection solutions, autonomous mobile robots, and robots as a service for shop floors and warehouses. Renato Improta, Latin America lead for Accenture Industry X, added: “Pollux’s expertise and experience in robotics and automation solutions will complement our industry consulting skills and industrial IT and applied intelligence capabilities. This combination will enable us to deliver real-time supply chain and operations orchestration with flexible manufacturing functions to our clients.” Details of the transaction were not disclosed.
About 7 Mile Advisors
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.
Subscribe to receive newsletters and industry research, as well as details about recent transactions, new podcast episodes, and upcoming events:
