Every year sees a flurry of yearend mergers and acquisitions announced, and this year continues the trend. One of the interesting things I've seen popping up, though, is the move by companies to target purchases that allow them to vertically integrate.
While there has always been interest by companies to fill in portfolio gaps, there was also a big emphasis on focusing on core operations and shedding business units, that way companies figured they could simply buy what they needed from outside suppliers.
Maybe the new acquisitions are just part of the pendulum swing in M&A trends toward being "full-service" suppliers. Maybe they're in response to the supply chain chaos that has left firms waiting for deliveries. Either way, it's interesting to watch.
Consider the recent moves by two companies known for their plastics operations that recently acquired metal-based businesses.
On Dec. 20, Sonoco Products Co. announced a definitive agreement to buy Ball Metalpack of Broomfield, Colo., a manufacturer of metal packaging for food and household products and the largest aerosol producer in North America, for about $1.35 billion.
And on Dec. 21, Tide Rock Holdings — the owner of Plastics Design & Manufacturing, Pikes Peak Plastics and other cable and plastic subcomponents-producing companies — said it has acquired Bayless Manufacturing LLC of Valencia, Calif. That move will allow it to offer U.S.-based metal fabrication.
"Tide Rock has been interested in the metals and machining space for a while now. Many of our manufacturing companies' customers have metal fabrication needs. With Bayless, we can now offer them high-quality metal fabrication, machining and coating capabilities based in the U.S. and with capacity to scale," Tide Rock President Brooks Kincaid said in a news release.