With inflation and higher interest rates continuing to ease along with greater flexibility in dealmaking, industrials are a key sector for dealmakers this year, as many seek out innovative technologies, digital assets, and supply chain resilience
Manufacturing and Supply Chain M&A Outlook
Q&A with Mark Williams, Chief Revenue Officer, Americas | Datasite
Tell us about yourself and your role with Datasite
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I’m Mark Williams, Americas Chief Revenue Officer at Datasite, a leading SaaS platform used by enterprises globally to execute complex, strategic projects. I set and execute the company’s regional sales strategy, including leading over 170 sales professionals.
In what specific ways have industrials demonstrated resilience amidst the current geopolitical uncertainties and macroeconomic fluctuations?
Demands for sustainability, innovation, and wartime defense, combined with stimulus funding focused on infrastructure and manufacturing have powered investment in industrials. In fact, industrials helped fuel a 13% year-over year increase in EMEA 4Q 2023 deal kick-offs on Datasite, which annually facilitates about 14,000 new M&A deals. And because these are deals at their inception rather than announced, the outlook for industrials is good in 2024.
What are the primary challenges facing manufacturing and supply chains, and how are industry leaders addressing these challenges?
There are several factors that can pose potential disruption to manufacturing and supply chains in 2024, including inflation, employment trends, elections, and regulatory changes. Cyber security and natural catastrophes are also among the risks most anticipated in 2024. To keep ahead of these risks, some industry leaders have learned from the pandemic that maintaining regular audits of systems and testing business continuity plans are critical.
What key factors contribute to industrials remaining a focal point for dealmakers despite ongoing volatility?
With inflation and higher interest rates continuing to ease along with greater flexibility in dealmaking, industrials are a key sector for dealmakers this year, as many seek out innovative technologies, digital assets, and supply chain resilience to increase manufacturing efficiency and to reinvent business processes.
Are you optimistic about an economic turnaround later this year?
For now, successive interest rate hikes by the Federal Reserve and other central banks have been able to counter rising inflation, which should mean dealmakers can now operate with more certainty. Increased M&A activity is already appearing on Datasite. For example, in Q4 2023, there was a 14% spike in global sell-side deal kickoffs compared to the same period last year.
What do you expect next for manufacturing and supply chains going forward?
Technology will continue to play a significant role in the future of manufacturing. Despite higher financing costs and a still challenging business environment, manufacturers are focused on investing in automation to improve efficiency and business processes, as well as investigating the possibilities of generative AI. Some of this activity is already showing up on Datasite.
Aggregated and anonymized industrial M&A deals on Datasite shows that sell-side industrial deal kick offs are up 20% in the first two months of this year compared to the same time a year ago. Additionally, the global industrial pipeline is full, with deal kick offs up 9% from September 2023 to February 2024 compared to the same time a year ago. A potential first wave of industrial deals could close in 2Q 2024.
The content & opinions in this article are the author’s and do not necessarily represent the views of ManufacturingTomorrow
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