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September 2021

Market Update: Industrial Automation & IoT – Q2 2021


The pandemic has been an element of disruption in the Industrial Automation & IoT sector, intensifying the gap between the companies that embraced digital transformation and the ones that were left behind. As a result, the M&A activity in the sector has accelerated while new technologies have emerged. According to IBM, two-thirds of manufacturers have accelerated their integration of digital technologies, particularly technologies that facilitate remote learning. Additionally, as a response to the supply-chain crisis that affected businesses in almost every industry, many manufacturers opted to reshore their supply sources to the U.S. According to Paulo De Matos, the Chief Product Officer of SYSPRO, companies need to engage in dual sourcing to increase their resilience in front of supply-chain challenges.

Industrial Automation & IoT stock performance measured by 7MA’s sector index has demonstrated momentum, surpassing that of the broader market since July 2021. Since the end of October, the overall market and the Industrial Automation & IoT index have risen sharply amid vaccination news, recovery efforts, and a positive outlook for the global economy. Industrial Automation & IoT stocks have continued to rise so far in 2021 and are hovering close to 40% higher than last August. Revenue multiples have stayed in between 6x – 7x while EBITDA multiples have been near 25x since January of this year.

7MA has recently completed several M&A transactions for companies with Industrial Automation & IoT products, software platforms, and service offerings and has developed unparalleled deal expertise and knowledge of the industry trends, valuation trends, and most active strategic and financial buyers. Please contact Leroy Davis, Sydney Scadden, or Conor Smith if you would like to learn more about Industrial Automation & IOT.

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