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Michael Poole

E: mpoole@pcecompanies.com

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Industry Trends

Lithium M&A Activity Picks Up

Consolidation in the lithium industry has accelerated in 2023 as EV makers continue to drive up demand for the precious metal. In May, prominent lithium producers, Livent and Allkem agreed to a $10.6 billion deal. Liontown Resources and Essential Metals also received acquisition bids since the beginning of 2023, but both declined the offers. Industry experts predict further consolidation as lithium demand continues to rise.1

U.S. Manufacturing PMI Contracts Continue Decline

U.S. manufacturing PMI contracts declined from 47.1 to 46.9 between April and May, the sixth straight month of contraction in the U.S. manufacturing sector. Operators indicated that the backlog remains robust, though new orders have declined. The trend will likely continue in the coming months as manufacturers work through the existing backlog. Nonmetallic mineral products, furniture & related products, fabricated metal products, and transportation equipment were the four manufacturing industries that reported growth.2

Oil Prices Continue to Decline Through Q2

Oil prices continue to fall amid global recession concerns and a high-interest rate environment. Brent crude oil prices were down as low as $72.09 in June from a YTD high of $86.96 in April. While prices remain low for now, oil production cuts announced by OPEC are expected to lower supply and bolster prices in the second half of 2023. Oil prices are forecasted to increase to $79 per barrel by September as OPEC oil production cuts allow lower supply to meet demand.3 4

Landmark Settlement For Drinking Water Pollution

In the largest settlement to date regarding PFAS in drinking water, known as forever chemicals, two spinoff companies of Dupont will pay a combined $1.19 billion. The settlement aims to resolve claims by multiple states, including Ohio, New Jersey, and West Virginia, over PFAS contamination. The funds will be used to address water treatment costs and cleanup efforts. This settlement highlights the growing legal and financial consequences faced by companies linked to PFAS contamination.5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Evoqua Water Technologies Corp.
  • Xylem Inc.
  • $7,657.63
  • ECM Industries, LLC
  • nVent Electric plc
  • $1,100.00
  • ASPEQ Heating Group LLC
  • SPX Technologies, Inc.
  • $418.00
  • HISCO, Inc.
  • Distribution Solutions Group, Inc.
  • $281.70
  • Distribution Solutions Group, Inc.
  • Westinghouse Air Brake Technologies Corporation
  • $230.00
  • GW Kent/Twin Monkeys/Stout Tanks and Kettles/Brewmation/Automated Extractions
  • Lotus Beverage Alliance
  • $100.00
  • Indoff Incorporated
  • Global Industrial Company
  • $69.20
  • Transcend Solutions, LLC
  • CECO Environmental Corp.
  • $22.40
  • Southern Hydraulic Cylinder, Inc.
  • Miller Industries, Inc.
  • $17.50
  • Edgewater Power Boats, LLC
  • Nimbus Group AB (Publ)
  • $9.50

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Chance Rides, LLC
  • Permanent Equity
  • n/a
  • New Carbon Company, LLC
  • Arbor Investments
  • n/a
  • A.M. Castle & Co.
  • MiddleGround Management, LP
  • n/a
  • Northwest Fuel Systems, Inc.
  • Guardian Capital Partners Investment Management, L.P.
  • n/a
  • Titan Acquisition Holdings L.P.
  • Lone Star Americas Acquisitions, Inc.
  • n/a
  • Cumberland Diversified Metals, Inc.
  • Slate Capital Group
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Riordan Materials Corp.
  • DXP Enterprises, Inc.
  • $6.20
  • Florida Valve & Equipment Corp./ Environmental MD, Inc.
  • DXP Enterprises, Inc.
  • $3.00
  • Altitude Wellness, Inc/Trident Water LLC/Altitude International (Chambers), Inc
  • Greenlite Ventures Inc.
  • $0.41
  • Lawn and Garden Division of Antilles Power Depot
  • Freije Supply Inc.
  • n/a
  • Keller's, Inc.
  • Atlantis Fire Protection
  • n/a
  • Murphy Supply Company
  • RKCA, Inc.
  • n/a
  • American Olean Midwest LLC
  • Louisville Tile Distributors, Inc.
  • n/a
  • Equipment Rental Assets of Elms Equipment
  • Sunbelt Rentals, Inc.
  • n/a
  • West Florida Supply Co.
  • City Maintenance Supply
  • n/a
  • Washoe Building Supply, Inc.
  • SRS Distribution Inc.
  • n/a
  • Assets of R&R Rentals
  • Sunbelt Rentals, Inc.
  • n/a

 

Source S&P Capital IQ as of 07/05/2023 and PCE Proprietary Data

PCE Transactions

Contacts

Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Ken Sommers

Denver Office

303-276-7985 |

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Michael Poole

Orlando Office

407-621-2112 |

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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:

  1. 1. Barrera, Priscila “Lithium Market 2023 Year-to-Date Review” Investing News, 1 June, 2023.
  2. 2. Cahill, Kristina, “Manufacturing PMI® at 46.9%; May 2023 Manufacturing ISM” Institute for Supply Management, 1 June, 2023.
  3. 3. Drozdovica, Jekaterina "Oil price forecast: Will WTI and Brent regain momentum in 2023?" Capital.com, 22 May, 2023.
  4. 4. French, Matthew, "EIA expects lower crude oil prices for the second half of 2023 and for 2024" U.S. Energy Information Administration, 22 May, 2023.
  5. 5. Rubin, Debra “DuPont, Spinoffs To Pay $1.19B in Largest Yet PFAS in Drinking Water Settlement”, Engineering News-Record, 3 June, 2023.
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