In 2024, the US industrial services sector saw some interesting trends in mergers and acquisitions (M&A):
Overall, M&A activity slowed down a bit. There was a 5% dip compared to the same time last year, and a bigger 24% drop from the previous quarter. This might be because companies are getting ready for lower interest rates in the future.
Deal volume stayed pretty steady, though. In the third quarter of 2024, there were 428 deals, which is slightly more than the previous quarter and a little up from the same time last year. However, the total money invested in these deals went down by 58.2% compared to the same time in 2023.
Private equity companies were still very active, especially in companies that provide facility services. They were involved in 66% of all deals in the third quarter.
The Industrial Supplies & Parts sector was the busiest, with 193 deals. Machinery and Electrical Equipment and Aerospace & Defense were also pretty active.
Looking ahead, things are looking up for M&A activity in 2025. We might see more deals because the new administration might be more relaxed about M&A regulations, and interest rates could go down.
These trends show that the M&A landscape in the US industrial services sector is always changing.
We source Industrial Service businesses for Private Equity, Search Funds and Corporates.