Industrials M&A update: Q4 2017
As a predicted impending electric car boom disrupts the metals market, technologies such as additive manufacturing, autonomous robots, and the Internet of Things are creating disruption for many within the manufacturing industry. This Industrials M&A update provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the industrial products industry.
- Electric vehicles disrupt metals market1: Prices of an array of metals, including lithium and cobalt, which are key components of electric car batteries, have doubled in price as investors look to get ahead of the predicted impending electric car boom. Automotive demand for lithium is expected to grow at a compound annual growth rate (CAGR) of 35 percent through 2021, driving shares of cobalt and lithium suppliers higher.
- Additive manufacturing2: 3D printing, also known as additive manufacturing, is disrupting traditional manufacturing processes. Additive printing is able to reduce assembly requirements and flaws in component design. Commercialization of additive manufacturing presents an opportunity to drive cost efficiencies and revenue growth, especially for complex assemblies.
- Autonomous robots and the supply chain3: Advances in autonomous robot technologies are becoming a focal point for industrial companies. Robotics can improve the speed and accuracy of routine operations, particularly in warehousing and manufacturing spaces, while improving efficiency and worker safety. The use of drones in inbound/outbound logistics alone is expected to create a $21B market by 2021.
- Internet of Things (IoT)4: The explosion of data and connected devices is creating disruption. Software and analytics are enabling product and operational performance that was not previously possible. IoT spend is expected to grow at a 17 percent CAGR through 2020, while IT security spending is expected to increase tenfold by 2020 due to the increased cyber threats that correspond to the increased use of IoT in manufacturing.
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1 “Electric Vehicles Market - Growth and Impact on Mining,” Deloitte Consulting, 2017.
2 “3D Opportunity for Electronics: Additive Manufacturing Powers Up,” Deloitte Consulting, 2017.
3 “Using Autonomous Robots to Drive Supply Chain Innovation,” Deloitte Consulting, 2017.
4 “Forces of Change: Industry 4.0,” Deloitte Consulting, 2017.