Analysis

Industrials M&A update: Q4 2016

While, the incoming Trump administration’s focus on infrastructure investment in the US is expected to fuel growth, its focus on strengthening domestic manufacturing may force companies to consider the viability of onshoring current manufacturing. At the same time, as the pace of innovation in the manufacturing industry increases, so does the risk of cyber security breaches. 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.

Industrials trends

  • 3D opportunities1. Additive manufacturing, which includes subsets such as 3D printing, rapid prototyping, direct digital manufacturing, and more, is gaining traction as the technologies upon which it relies become more efficient. Additive manufacturing has the ability to augment traditional manufacturing capabilities, disrupt current obstacles to innovation, and create new business models.
  • Infrastructure investment2. A focus on infrastructure investment in the United States, signaled in part by the recent executive orders permitting the construction of the Dakota Access and Keystone XL pipelines, is expected to fuel growth in many infrastructure-related industries. The federal government is expected to seek to reduce regulatory burdens and hasten the approval process for a spate of projects intended to modernize the nation’s infrastructure.
  • Domestic manufacturing3. President Donald Trump has indicated he plans to strengthen domestic manufacturing as a hallmark of his administration’s economic agenda. Many companies may be forced to consider whether onshoring current manufacturing and production processes is economically and commercially viable given the uncertainty surrounding the ultimate impacts of the new administration’s policies.
  • Cyber risk in manufacturing4. The increasing reliance on smart products, the Internet of Things, and sensor technology has increased the pace of innovation in the manufacturing industry, but it has also exposed some major players to substantial cyber security risk. Firms should consider engaging senior leadership in substantial discussion to develop a business-driven cyber risk program.

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References

1 “3D opportunity for business capabilities: Additive manufacturing transforms the organization,” Deloitte University Press. January 17, 2017.
2 “Trump’s Big Plans on Infrastructure Will Stay Big,” BlooombergView. January 28, 2017.
3 “Trump signs executive orders on manufacturing, infrastructure,” Reuters.January 24, 2017.
4 “Cyber risk in advanced manufacturing: Getting ahead of cyber risk,” Deloitte. 2016.

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