The plastics M&A market is evolving, and it's important for buyers and sellers to be aware of these changes.
That's the viewpoint of Steve Bieszczat, chief marketing officer with DelmiaWorks, a manufacturing software supplier based in Paso Robles, Calif. "Over the past several years, I've seen a definite shift in the business structure of the plastics industry," he said in an email.
"When I first became involved, most of the leadership I interacted with were owner/operators," Bieszczat added. "As the years passed, I began to notice that many owner/operators were selling their businesses to investors, private equity mainly."
According to Bieszczat, this change was the result of three factors: Owners were aging and considering how to best monetize their businesses; private equity investors had realized that manufacturing was a solid investment; and low interest rates had created a very favorable investment environment.
More recently, he added, he's noticed a second phase in this evolution: "With many plastics businesses now owned by investors and operated by management teams, there has been a recognition that manufacturing platforms are a vehicle for growth.
"This opportunity has driven industry consolidation, with investment groups typically now owning several previously independent manufacturing operations.
"I believe this consolidation is a natural evolution of the industry. All industries consolidate over time, and plastics processing has moved from a relatively young industry to one that has now matured," Bieszczat added.
DelmiaWorks has seen this evolution firsthand in nearly three decades of delivering ERP solutions to plastics processors.
"We've gone from helping owner/operators of fairly specialized businesses manage one or two locations to supporting the needs of investors and management teams that need to maintain control and visibility over far larger and more complex operations," Bieszczat said.
DelmiaWorks, formerly IQMS Inc., has been owned since 2019 by French software firm Dassault Systemes SE.