The United States manufacturing industry has been resilient since the start of the decade, despite ongoing hindrances stemming from the COVID-19 pandemic, such as supply chain disruptions, inflation and workforce shortages, as well as geopolitical uncertainties. Accounting for 11 percent of the U.S. Gross Domestic Product and 8 percent of the U.S. workforce, a robust manufacturing industry plays a vital role in powering domestic production and employment, as well as the overall global economy.
According to research performed by McKinsey & Company, the resurgence of U.S. manufacturing could result in roughly 1.5 million new jobs, primarily among middle-class workers residing throughout the Midwest region. While this influx of jobs would provide various economic benefits to hundreds of communities, the true economic impact would be realized across the U.S. through employment multipliers, which are indirect jobs created through manufacturers’ presence within a community. As employment multipliers consider industry linkages, consumer discretionary spending and tax revenue, the Economic Policy Institute estimates an additional 9.5 million jobs would be created as a result of 1.5 million manufacturing jobs.
In addition to the aforementioned labor benefits, the resurgence of U.S. manufacturing could help mitigate the reliance on imported materials, which have historically fueled domestic supply chains. As a result of the urgency created by the COVID-19 pandemic, U.S. manufacturers took immediate action to strengthen supply chains by increasing critical inventory, diversifying suppliers, and localizing production and supply networks. Although residual risk will always be present, U.S. manufactures remain confident that the improvements made as a result of the COVID-19 pandemic will pay dividends in future years.
M&A Market Activity
Domestic deal activity continued to slow in August 2022, as M&A activity reverted to near pre-pandemic levels. U.S. M&A deal volume for the eight months ended August 31, 2022 declined 13.4 percent when compared to the same period in 2021, while disclosed deal value for the eight months ended August 31, 2022 declined 16.7 percent when compared to the same period in 2021.
The Central Ohio M&A market has continued its trend with the broader domestic market, as deal volume for the eight months ended August 2022 was 22.8 percent lower than the prior year. Meanwhile, Central Ohio deal volume fell by 62.1 percent in August 2022 relative to August 2021. With that being said, August 2022 saw the closing of several noteworthy transactions in Central Ohio, primarily from strategic acquirers such as, Treetree Agency, America’s Floor Source LLC, Hyperion Materials & Technologies Inc., and Installed Building Products Inc.
Deal of the Month
On August 3, 2022, Hyperion Materials & Technologies, a leading global materials science company, announced the acquisition of Premium Diamond Solutions SA. The acquisition of Predias will expand Hyperion’s position as a global provider of synthetic diamond and cBN products. Headquartered in Europe, Predias helps consumers select optimal super-hard materials for a wide variety of applications. According to Ron Voigt, CEO of Hyperion, “Bringing Predias’ team into the Hyperion Materials & Technologies family enhances the value, reach and experience we can offer to customers around the world.”
Mike Kostandaras is an Analyst with MelCap Partners, LLC, a middle-market investment banking advisory firm. For more information on MelCap Partners, please visit www.melcap.com or email [email protected].
