Ask just about any investment bank or financial firm about the plastics industry with respect to M&A and they paint similar pictures: it's hot! While some reports show that transaction volume was down in 2013 from 2012, overall plastics industry players remain attractive to those looking to get into the plastics market.
According to Stout Risius Ross Inc. (SRR), a middle market investment banking company, plastics M&A volume increased approximately 26% in 2012, but decreased approximately 9% in 2013. Despite that SRR noted in its report that there "continues to be strong demand for plastics companies across all end markets and processes." Industrial plastics continues to represent the largest number of transactions with 64% of the volume followed by plastic packaging at 22% and medical plastics and automotive plastics at 10% and 5% respectively.
However, both medical plastics and industrial plastics deal activity grew in 2013, particularly medical, which increased 31%, the SRR report noted. While there are a number of factors and industry dynamics driving this growth, a few that SRR pointed out include "continued high demand for quality acquisition targets from both strategic and financial buyers, good availability of financing for both small and large transactions and positive macro economic trends and outlook for many plastics end markets."