Private Equity Investments in Manufacturing Companies

Historically, manufacturing was the primary industry of interest for private equity acquisitions. However, as PE firms progressively tried to find more scalable companies with lower CapEx requirements, over time, manufacturing acquisitions declined as a percentage of the overall private equity investments.

To be clear, the entire private equity market has actually grown considerably over this very same time. Consequently, the absolute variety of making acquisitions by private equity companies has actually grown, however not at the exact same pace as the personal equity industry.
Most just recently, with the effects of the coronavirus, private equity investments in producing business has dropped from 15% of transactions in 2019 to 13% in 2020 YTD. The impacts are likely more extensive considering January and February of 2020 were mainly unaffected by the coronavirus.
So, while the overall number of PE acquisitions declined substantially in current months due to the coronavirus, the impact on producing acquisitions has actually been even more severe as need for items unexpectedly weakened, producing a less beneficial outlook for making business compared to other sectors such as technology, software and health care business, for example.


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