Industrial and Manufacturing
The Industrial and Manufacturing sector is large and diverse. The sector provides much of the equipment found on factory floors around the world today and its products help manufacturers large and small do more with less. More power with less footprint. More control with less labor. More output with less cost.
Yet, the boundaries of manufacturing and the other sectors of the classification system can be somewhat blurry. The establishments in the manufacturing sector are engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products. Their output is a new product. However, the definition of what constitutes a new product can be somewhat subjective.
Sectors include:
- Aerospace and Defense
- Homeland Security
- Transportation and Logistics
- Diversified Industrials
- Paper & Packaging
- Capital Goods
- Manufacturing
- Industrial Services
- Security and Safety Equipment
- Industrial Equipment
- Specialty Products
- Industrial Automation
- Construction & Materials
In today’s global economy, similar challenges face all sector players; increased costs for oil, natural gas, steel and copper are squeezing margins - unless offset by pricing and surcharge increases - and customer reluctance to invest in new equipment has intensified the importance of aftermarket services.
To bolster core product offerings or expand geographical reach, some players are seeking acquisition candidates, while others are looking to divest underperforming units. Calls for corporate accountability have driven new regulations around internal controls and everywhere, industrial manufacturing companies are trying to figure out how to get the most out of their IT investments.
Rising costs and the weakness of the dollar continue to affect revenue growth, driving consolidation as companies attempt to mitigate market risk through economies of scale and scope, while concentrating their operations on more profitable sectors.
Local manufacturers, with contraction in the supplier base, are finding they must retool and restructure to gain market share and stay competitive as they compete with larger firms who continue to move towards global platforms. Suppliers, being asked to accept more risk, are taking on wider responsibility for managing the supply chain and are beginning to globalize their operations. Risk is being passed down the chain.
Due to advancing globalization, declining trade barriers, and an increasingly mobile workforce, the transport and logistics industry continues to inch-upward in growth. By expanding their service offerings both upstream and downstream, transport companies and logistics service providers are becoming masters of their supply chain. International growth through acquisitions, joint ventures and alliances are also reshaping the industry. Under these conditions, new corporate strategies and processes are unfolding.
Civil aerospace is also undergoing significant changes - with a plethora of new aircraft launches – driving new business and investment opportunities for smaller suppliers. In the forest and paper sector, success is becoming dependant on how well a company manages costs, satisfies customer demand, and responds to an ever-changing business and regulatory environment.
To stay competitive, companies must continually monitor a host of critical business issues including those involving information and technology security, mergers and acquisitions and global competition. Across all sectors of industry, there is erosion of local domestic monopolies raising the importance of customer management and supply chain management.
Lexington’s Industrial and Manufacturing philosophy is to leverage our expertise in identifying and sponsoring cross-border companies with value-add opportunities, generally signified by strong management depth, attractive industry and economic trends, fragmented markets, top-line and operating margin growth opportunities and robust exit alternatives.
We look to partner with domestic and international companies who favor sound risk management processes and state-of-the-art technologies, global alliances or contracted partnerships, effective security and risk management systems and solid growth and acquisition strategies. We believe the overall level of M&A and leveraged buyout (LBO) activity in this sector is poised to remain strong as companies pursue strategic acquisitions to drive growth, expand product offerings or geographic reach, or to remove excess capacity in their industry.
Our investment banking professionals can assist many Industrial and Manufacturing companies in garnering the financing options they need whether it be packaging materials, plastics, aerospace equipment, demand-driven manufacturing, advanced machinery, specialty components or any number of the other various industrial products and services.
This group includes manufacturers of products and equipment for use by businesses in their operations and supply chain. These companies are not developers of information or medical technologies, their products do not use information technology (such as traditional software or electronics), and they do not fall under any other category.
