The pace of plastics mergers and acquisitions continues to percolate like a gallon of high-strength Starbucks coffee laced with Red Bull.
The market recorded 355 deals in 2017, according to P&M Corporate Finance LLC of Southfield, Mich. That's a jump of 19 deals over 2016 and the third straight annual increase. It's also the highest number of deals posted since 2012.
Based on end market, the construction field saw its number of deals double from 19 in 2016 to 38 last year. The number of transportation deals also jumped from five to 14, while the electronics sector registered 11 deals in 2017 after seeing only two the previous year.
By process, the number of specialty deals surged almost 30 percent in 2017, while the number of injection molding deals was up almost 15 percent. And in plastics packaging, the number of deals involving bottle makers jumped almost 70 percent from year to year.
"Despite lower overall volume trends for global M&A in 2017, the plastics and packaging segment remained highly active this year," PMCF Managing Director John Hart said.
Key trends supporting increased deal volume, according to Hart, include heightened strategic buyer interest and the sustained presence of private equity investors.
"The plastics and packaging market continues to attract strong interest from buyers interested in shaping the segment's continued consolidation," he said. "And the changing landscape is creating unique opportunities for large and mid-size players to enhance their positions via M&A."
From a market positioning perspective, Hart explained that strategic buyers "are turning to M&A to serve customers entering new geographies and markets, expand capabilities and strengthen their workforce." At the same, private equity investors are "flush with record amounts of cash and are pressured to grow … [and are] driving competition for industry consolidating deals."