• Corporate Finance Transactions

BGL Industrials Insider Lubricants Greases M&A in Industrial Consumables

October 19 2016

The BGL Industrials Insider discusses key trends and issues affecting the industry, as well as recent mergers and acquisitions activity, and the recent performance of publicly-traded companies.

Positive growth in global manufacturing and end user market demand are stimulating M&A activity in Industrial Consumables. Lubricants is among the active markets, as investors target manufacturers of engineered products and materials that cater to specialized markets and applications.

The report documents economic growth, continued increases in industrial production, and lower base oil prices as drivers of revenue and profit growth for lubricants manufacturers. Demand for higher value-added specialty lubricants is growing with the increasing use of advanced materials and technologies in manufacturing processes. 

Future consolidation is expected as industry participants look to build scale in a fragmented market. Strategic rationale for recent acquisitions has centered on expanding technology and engineering resources, broadening product portfolios, and diversifying into growing end markets:

  • Germany-based FUCHS Group acquired Ultrachem in August, its seventh buy in six years, to expand its reach in the specialty lubricants market in the U.S. The deal came within months of its purchase of Chevron’s White Oils and Food Machinery Specialty Lubricants Business, announced in May.
  • Houghton International was looking to boost its metalworking capabilities with the acquisition of Wallover Enterprises in July, a move that would broaden its product portfolio and tap Wallover’s track record of innovation to enhance its customer value proposition.

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Related pages: Andrew K. Petryk, Justin A. Wolfort

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