Industry fragmentation is high and consolidation a key theme in the coatings, adhesives, sealants, and elastomers (CASE) markets, where M&A is accelerating across all verticals, according to the Industrials Insider, an industry report released by Brown Gibbons Lang & Company (BGL).

The CASE markets have experienced steady growth against a backdrop of global economic expansion; gains in industrial and automotive production; and strengthening recovery in the construction markets. Acquisitions are occurring across areas of expertise, technologies, and geographies, as industry players look to gain entry or increase penetration in fast-growing niches, with highly strategic assets attracting premium valuations in the current environment.

Corporates are actively pursuing acquisitive growth, with large targets such as Valspar (Sherwin-Williams), Royal Adhesives & Sealants (H.B. Fuller), and A. Schulman (LyondellBasell) illustrative of an aggressive posture. Bolt-on activity has also been robust with Axalta Coating Systems and PolyOne among the industry players to complete serial buys. Private equity groups have been equally aggressive illustrated by an increasing level of new investments and add-on acquisitions.  U.C. Coatings (High Road Capital Partners), Innovative Chemical Products (Audax Group), Valentus Specialty Chemicals (Huron Capital Partners), and Meridian Adhesives Group (Arsenal Capital Partners) are among the platforms looking to consolidate the market.

Liquidity will continue to fuel deal-making as buyers look to deploy surplus capital.

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