Diversified Industrials Q2 2020

Industry Trends

Consumer Spending Continues on Big-Ticket Items

Automakers reported steep drops in sales during the 2^nd quarter due to the pandemic. Consumer spending for these big-ticket items picked up once the dealerships were able to reopen. Car sales have rebounded to pre-pandemic forecasts since the first shutdowns occurred in March.¹

Additional Boeing Orders Canceled

Boeing is reopening manufacturing plants, although customers continue to cancel and delay orders for new planes. Over 300 Boeing 737 Max planes were canceled by customers in the first half of the year. Boeing’s backlog has decreased to 4,552 planes.^{2 3}

Industrial Production Index Remains Below Pre-Pandemic Levels

Many factories are starting to reopen partially. As a result, the industrial production increased by 1.4% in May. Total production levels are still down 15.4% from where they were before the pandemic. In June, IPI increased 5.4% but remained 10.9% below its pre-pandemic levels reported in February. The performance of Q2 2020 is down 42.6% on an annualized rate the largest quarterly decrease since WWII.⁴

Single-use Plastic is Seeing a Resurgence

Single-use plastic bags, wraps, and other hard-to-recycle items have surged amid the pandemic. Efforts to fight the virus are boosting sales for plastics makers. Consequently, the plastics industry is citing the pandemic to lobby against bans, asserting that their products preserve hygiene.⁵

Toilet Paper Continues to Ramp Up Production

The paper goods company Georgia-Pacific is producing 1.5 million rolls more toilet paper per day than they were before the pandemic. Yet, there is still a shortage across the United States, despite producing toilet paper 24 hours a day, seven days a week, with faster shipping than usual. It is estimated consumers will use 140% more toilet paper this year due to staying home during the pandemic.⁶

Largest Transactions Closed

Target
Buyer
Value($mm)

Lummus Technology Business of McDermott
Rhone Capital, LLC; Haldia Petrochemicals Limited
$2,725.00
Pope MGP, Inc./Pop EGP, Inc/Pope Resources, A Delaware Limited PartnershipLimited
Rayonier, Inc.
$552.23
R.H. Sheppard Co., Inc.
Bendix Commercial Vehicle Systems, LLC
$149.50
Elliot Sawmilling Co., Inc.
Canfor Southern Pine, Inc.
$110.50
Consumer Packaging Group Business of Greif, Inc.
Graphic Packaging International, LLC
$85.00
Champion Bus, Inc./El Dorado National Kansas, Inc.
Forest River, Inc.
$49.00
Rapak, LLC
TriMas Corporation
$12.00
Energy Recovery, Inc.
Raymond James & Associates, Inc.
$11.28
Refrigerated Solutions of Standex International Corporation
Ten Oaks Group
$11.00
PeakLogix, Inc.
Alta Equipment Group, Inc.
$7.70

Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

“Consumer Appetite for Cars, Homes Bolsters U.S. Economy,” Sarah Chaney, The Wall Street Journal, July 15, 2020.
“Boeing To Reopen Some Production Plants with New Worker Safety Protocols,” National Public Radio, April 17, 2020.
“Boeing 737 Max Cancellations Climb Again in the Dismal First Half of the Year,” CNBC.com, July 14, 2020.
The Federal Reserve, Industrial Production and Capacity Utilization, July 15, 2020.
“Single-use Plastic is Back in the Pandemic Era,” The Wall Street Journal, June 29, 2020.
“Toilet Paper Shortage: When Will it End?,” The Atlanta Journal-Constitution, May 3, 2020.

Diversified Industrials Q2 2020

M&A Transaction Trends

Industry Trends

Consumer Spending Continues on Big-Ticket Items

Additional Boeing Orders Canceled

Industrial Production Index Remains Below Pre-Pandemic Levels

Single-use Plastic is Seeing a Resurgence

Toilet Paper Continues to Ramp Up Production

Largest Transactions Closed

Contacts

Michael Poole

Michael Rosendahl

David Jasmund

Eric Zaleski

Melissa Ritter

Michael Rosendahl

Will Stewart

Woody Whitcomb

Michael Poole

Paul Vogt

Mackenzie Moran

Isabel Carta

Philipp Seubert

Services

Industries

Subscribe to PCE Communications

SITE MAP

OFFICES

Diversified Industrials Q2 2020

M&A Transaction Trends

Industry Trends

Consumer Spending Continues on Big-Ticket Items

Additional Boeing Orders Canceled

Industrial Production Index Remains Below Pre-Pandemic Levels

Single-use Plastic is Seeing a Resurgence

Toilet Paper Continues to Ramp Up Production

Largest Transactions Closed

hbspt.cta._relativeUrls=true;hbspt.cta.load(460423, 'bac68cc8-fde4-4bb3-9861-d06101aa18bd', {});

Contacts

Please Share This

Services

Industries

Subscribe to PCE Communications

SITE MAP

OFFICES