There is a new conundrum facing many manufacturing companies today: capacity limitations. Demand has been strong, especially in aerospace and defense, but it seems to be harder and harder for manufacturing firms to keep up.
Demand has been strong across the board, driven by continued reshoring and nearshoring initiatives, increased consumer purchasing and heightened industrial output, especially for Tier II and III suppliers (most of our clients). As a result, most of the companies we meet with are facing real capacity issues. There is just not enough supply, labor or time to produce at the levels demanded by customers.
Owners, in turn, are seeking more ways to streamline operations, shorten lead times and find new and creative partnerships to outsource production scale or specific processes.
One other way to address capacity issues is to buy it. We are seeing a trend of family businesses purchasing capacity as a way of not only addressing current constraints, but also building real value over the longer term.
If we can help you explore a strategically important buy-side transaction, please feel free to reach out.
In this quarter’s report, we cover:
- Using M&A to address capacity constraints and prepare for a future sale
- Manufacturing M&A transaction highlights
- Public market and subsector performance
- Key U.S. economic indicators
Explore the full report and connect with Ramsey Goodrich, our Manufacturing lead, to discuss what these opportunities could mean for your business.