Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • CEO Issue
    • Diversity
    • Best Places to Work
      • 2022 winners
    • Processor of the Year
    • Rising Stars
    • Women Breaking the Mold
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • BRICS and Plastics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • Reuters Responsible Business Europe 2022
    • ReifenhƤuser Technologies Livestreams
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Resin Prices
    • All Resins
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
March 22, 2010 02:00 AM

Panel: M&&A confidence, activity to rise

Frank Esposito
Senior Staff Reporter
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    An improving global economy should allow plastics mergers and acquisitions activity to stand on firmer ground in 2010.

    “2009 was a tough year to get anything done,” Deloitte Corporate Finance LLC's Will Frame said at the Plastics News Executive Forum, held March 7-10 in Tampa. “Those who went to market were penalized. It was like they only went because they had to, and that was a problem.

    “But in 2010 those conditions have abated,” added Frame, managing director with Chicago-based Deloitte. “Trailing 12-month earnings are improving. There's more stability, and buyers feel more confident.”

    Frame was part of an M&A panel at the event, joined by Blaige & Co. LLC executive adviser Randy Barko and Kurt Beyer, Red Diamond Capital Inc. senior vice president.

    Barko outlined steady growth of global plastics M&As, which climbed from 359 deals in 2004 to 480 last year, for compounded annual growth of 13 percent.

    Between 2002 and 2009, injection molding deals made up the largest portion of plastics transactions with a 20 percent share, according to data gathered by Chicago-based Blaige. Among end markets, packaging led the way with 143.

    Other changes tracked by Blaige were a reduction in the number of U.S.-only deals — dropping from 50 percent in 2002 to 36 percent in 2009 — and an increase in the number of corporate divestments, which climbed from 32 percent in 2006 to 46 percent in 2009.

    The amount of deals that involved strategic buyers bounced all over the place between 2002 and 2009, starting at 85 percent, then dropping to 68 percent before closing at 76 percent.

    “Plastics is still a fragmented industry, and consolidation is driving a lot of activity,” said Barko, who wrapped up a 25-year career with injection molding major Nypro Inc. in 2006.

    Beyer, whose firm is based in New York, also was optimistic when looking ahead in 2010.

    “You may not find a better time to buy a business than right now,” he said. “Large businesses are selling for higher multiples and non-cyclicals are selling at historically high multiples. Even building-materials firms, which have been beaten down by lack of demand, might be a contrarian play.”

    Frame also offered a bit of contrarian advice when he pointed out that automotive “is not a hot market — there are no prizes for pointing that out — but if you peel back the onion a bit, it may have similar dynamics to medical.”

    Beyer and Frame also addressed the endless riddle of whether financial buyers from outside the industry or strategic buyers from within the industry are better for plastics firms.

    “If you want continuity in the name or in the company — or if you want flexibility and still want to own part of the business, a financial buyer may be best,” Beyer said. “But if you want to sell for a maximum price, a strategic buyer may have the edge up.

    “They don't have to worry about financing as much when considering a purchase price.”

    Frame agreed with Beyer's assessment, saying that while strategic buyers are interested in organic growth, financial buyers “may have a rate of return set so high that capital never gets spent.”

    Although recent recessionary conditions have made it a bit more difficult to value companies, Frame said he also is optimistic about 2010.

    “At the start of 2009, the impact of resin [prices] was benign, but there was no visibility on orders,” he said. “There were educated guesses rather than real knowledge.

    “But multiples and valuations are only part of the deal,” Frame added. “You have to look at why they're coming to market.

    “Some deals in the last few weeks were surprising to me because of their valuations. My caution, week by week, is lessening. Sellers could look at the second half of the year and decide they could do a lot worse.”

    Copyright 2010 Crain Communications Inc. All Rights Reserved.

    RECOMMENDED FOR YOU
    One killed, two injured in shooting at WeatherTech facility
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Pandemic-prompted reshoring creates growth for medical injection molders
    2
    Lego to build $1B US molding plant
    3
    Boston Group consolidating, growing in Ohio
    4
    Atkore buys HDPE pipe maker United Poly, continuing M&A push
    5
    Numbers that Matter Live - June 2022
    SIGN UP FOR TO RECEIVE THESE EMAILS AND ENEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Urethanes Technology
    • European Rubber Journal
    • Tire Business
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright Ā© 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • CEO Issue
        • Diversity
        • Best Places to Work
          • 2022 winners
        • Processor of the Year
        • Rising Stars
        • Women Breaking the Mold
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • BRICS and Plastics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • Reuters Responsible Business Europe 2022
        • ReifenhƤuser Technologies Livestreams
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Resin Prices
      • All Resins
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified