Plastics mergers and acquisitions deal volume showed moderate growth in 2024, as the market worked to find more steady results and to adjust to a higher interest rate environment.
For the full year, the number of plastics M&A deals registered at 401, up 5 percent from 2023, according to data compiled by P&M Corporate Finance of Southfield, Mich. First-half deal volume had been flat when compared with the same 2023 period.
Deal volume growth in the specialty subsector pushed plastics M&A into positive territory for 2024. That subsector, which includes machinery, specialty extrusion and distribution, grew by 29 deals vs. the prior year.
The net change in the other five markets tracked by PMCF was a reduction of 10 deals. That change included a drop of almost 30 percent — 17 fewer acquisitions — in injection molding. Specialty deals accounted for 40 percent of all deals tracked by PMCF last year.
Interest rates began to rise from a historically low level of 0.25 percent in March 2022 and, after a series of increases, reached 5.5 percent in July 2023. The Federal Reserve then made three rate cuts totaling 1 percent in the last four months of 2024, dropping the Fed rate to 4.5 percent. Those drops gave a boost to M&A work by decreasing lending costs, but they remain well above the level they were at for most of the last decade.
More rate cuts were expected during 2025, but recent reports of strong economic activity now make that less likely to happen, according to economists and other market watchers. At the same time, sellers in the plastics M&A market "are getting better prices today than they were a year ago," according to PMCF Managing Director John Hart. "You don't sell in a down year unless you have to," he said.
Financial professionals contacted recently by Plastics News shared their opinions on where the plastics M&A market stands as the industry heads into 2025.