FOCUS Advanced Manufacturing & Automation Team Helps Business Owners

Posted on December 5, 2017

Washington, DC (November 28, 2017) – The world is experiencing a period of unprecedented change as digital connectivity and automation pervade the physical universe of people and things. FOCUS Investment  Banking LLC formed the Advanced  Manufacturing  & AutomationTeam to provide merger, acquisition and capital raising services to businesses affected by this transformation and to support firms supplying the specific tools and technologies driving the innovations.

The FOCUS Advanced Manufacturing & Automation Team currently is pursuing transactions in industries ranging from robotics and industrial automation to autonomous commercial vehicles; from advanced photonics and optics to electronic component manufacturing; from machining and metal engineering to Ag Tech.

The FOCUS team is composed of 15 professionals, including investment bankers, senior advisors, and research analysts. Team members were selected for their deep vertical expertise as both C-Level executives and dealmakers in fields driving — and impacted by — automation. These areas include manufacturing, process automation, software systems, aerospace, defense, logistics, and medical devices and instrumentation. International transaction support is provided by FOCUS’ global partner firms in M&A Worldwide.

For more information, contact John Slater, FOCUS Partner and Team Leader, FOCUS Advanced Manufacturing & Automation Team, at 901-684-1274 or John.slater@focusbankers.com.

About FOCUS Investment Banking LLC  

With more than three decades  of experience,  FOCUS Investment Banking is a trusted name in M&A advisory services worldwide.  FOCUS works to understand each client’s strategic and financial objectives, craft the best plan to achieve these goals, and deliver success. Whether helping to sell, buy, or raise capital, FOCUS strives to maximize the value of every transaction to the benefit of its clients. Securities transactions  conducted  by FOCUS Securities LLC, an affiliated company, registered Broker Dealer member FINRA/SIPC. For more information on FOCUS, visit www.focusbankers.com/automation.

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The Work World Is Changing and Society Needs To Change As Well

Posted on November 5, 2017

Written by John Slater

co-authored by Steven Hansen

We live in a time of great paradox. Technologies such as low cost renewable energy and automated production tools promise a world of abundance in which global poverty is abolished and human drudgery is eliminated. Yet even a casual glance at the daily news confronts us with a sense of dread that, far from Utopia, we are instead headed toward a dystopian future in which the benefits of technological advance will be reserved for a privileged few.

The disquieting consequence is that the bulk of humanity is relegated to scraping out a meager existence in a mean-spirited world where jobs (and the prosperity they bring) are reserved for a global elite trained to read the sacred texts of a new religion of technology.

Is the social contract of Western civilization, promising fair treatment and opportunity for all, which took root in 18th century England and France and flowered in the post WWII democracies, destined to fail? Just how will the world adapt to the current wave of technological advance which threatens the jobs of today’s middle class much as Mr. McCormick’s reaper drove earlier generations from the farms and into the factories of a prior era?

Econintersect has asked two contributors, John Slater and Steven Hansen, to discuss some aspects of this conundrum concerning how and where automation and robotics will impact the new economy and how social institutions, specifically education, can address these challenges.


John Slater is a Partner of FOCUS Investment Banking and Team Leader of the firm’s AdvancedManufacturing and Automation practice, providing merger and acquisition and capital raising services primarily for private middle market companies. He is a Chartered Financial Analyst and holds an AB in economics from Princeton and a JD from the University of Virginia.

Steven Hansen, co-founder and Publisher of … read the rest

Made in America: The 33 Cent Chinese Arkansas T-Shirt

Posted on October 3, 2017

Recently my colleague Marco Chan shared an extraordinary story that puts a new slant on the public discussion about robotics, China, outsourcing and the future of jobs.  According to this Bloomberg Business Week story,  a Chinese manufacturer, Tianyuan Garments Co., is investing $20 million to open a plant in Little Rock that will utilize robots developed by a Georgia company, Software Automation, to manufacture T-Shirts at a cost of 33 cents per shirt.  Each SEWBOT™ workline is capable of spitting out a T-Shirt every 26 seconds.  Human workers don’t stand a chance against such competition, no matter how low a wage rate they are willing to accept.

We’re in a period of profound change as digital technologies promise to transform virtually every industry globally.  In manufacturing this rapidly accelerating transformation will impact employers and employees alike.  PWC recently estimated that 38% of U.S. jobs could be taken by robots by 2030.  Futurists like Martin Ford and even well-known industrialists like Elon Musk have begun to argue that we need to consider adoption of a Universal Basic Income to address a world in which machines and artificial intelligence have replaced human beings in a large part of the economy.

For those that fear the consequences of automation, the connection has been broken between technological advance and the creation of new higher skilled jobs categories to replace the old lower skilled jobs.  I have more confidence that a dynamic economy will continue to provide opportunities for our citizens, creating currently unimaginable job categories for those willing and able to adapt.  Lifetime learning has become a survival skill in our society, opening up new business opportunities in education and training and likely creating hundreds of thousands of jobs in the process.

At the FOCUS Investment Banking Advanced Manufacturing & Automation Team we spend our time addressing … read the rest

Is Industry 4.0 the New DotCom Boom?

Posted on April 3, 2017

Fear stalks the land.  The Robot Apocalypse is nigh, destined to steal our jobs and our future.  Worse yet the machines are made elsewhere (Germany, Japan, even China) and America is being left behind in the race for manufacturing prowess.

We’ve heard this story before.  In the late 1980s, the U. S. computer memory industry had been decimated by Japanese and Korean competition.  To the Cassandras, this meant that the U.S. had forever lost the global economic race and was destined to become a second-rate power.

Nothing could have been further from the truth.  The prerequisites for U.S. global dominance of the technology world were already in place.  Within a few years, U.S. prowess in personal computers, microprocessors, and digital networking would lead to a capital investment boom and a stock market bubble not experienced since the 1920s.  Stock market fluctuations notwithstanding, the global growth of the Internet has not abated since.

For all its impact, the Internet has touched only a relatively small portion of human existence, focused primarily on media, entertainment, telecom and more recently retailing and finance.  The larger world in which we live, the world of things and physical interactions has, until now, been only lightly touched.  But that is going to change – and change in a huge way.

Imagine Amazon on Steroids

The world of digital automation is at the same stage as the internet in 1993, when the Mosaic browser was introduced and we first discovered the wonders of the World Wide Web.  The technologies are in place for a boom that will transform the global economy and, in the process, create new opportunities for better jobs and better lives.  And once again the U.S. is asserting its leadership role in developing the critical technologies.

Today Amazon utilizes highly advanced predictive analytics and automation tools that plan … read the rest

INTERVIEW WITH AXIAL CEO PETER LEHRMAN

Posted on November 10, 2014

We recently interviewed Peter Lehrman, CEO of Axial, one of the most energetic and innovative companies providing advanced technology solutions to M&A and corporate finance professionals operating in the middle market. Speaking from the “Roosevelt Room” in Axial’s headquarters in the Flatiron District, Peter covers a good deal of ground and I highly recommend you listen.

We began with a discussion of the current M&A market and Peter shared with us some highlights of Axial’s recent Concord event in New York: a packed crowd listened to various Axial members and panelist experts on the middle market, but for some of them the main event took place outside the lecture hall.

Highlighting this heightened market activity, Peter shared some of Axial’s internal data showing a rapid rise in new deal submissions. In September over 1000 new deals were submitted to the Axial site, compared with a recent average of 750 submissions a month.  Just-released data shows that October submissions grew again to more than 1200.  No word yet on whether this will bridge the imbalance between buyers and sellers.

Axial recently completed an $11 million capital round with Comcast Ventures. Peter envisions this capital helping Axial become the go-to meeting place for all participants in middle market M&A.  Their target community includes private and public companies as well as the professionals who advise them with regard to strategic relationships and transactions.

Although Peter was reluctant to share too much about his new product pipeline, he did share Axial’s vision for the role of technology in our industry.  He firmly rejected the idea that robots and intelligent systems will replace smart and creative deal professionals in the M&A industry.  Instead, he believes new systems and apps will make M&A professionals more effective by eliminating many of the more burdensome administrative tasks we now endure. My

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A Whiff of Inflation – M&A Valuations Lead the Way

Posted on July 17, 2014

(Originally Published on Axial Forum)

Since the 1970s, many of us have feared the threat of inflation looming just around the corner. Within the past year, economists and central bankers have led us to believe the inflation dragon has been permanently relegated to a dark hole, never to rain fire on the kingdom of men. We’re told that deflation is the real threat and that governments can continually run large deficits without reawakening the dragon. Recently, reality has intervened, however, to remind us that economists and central bankers aren’t infallible. U. S. Core CPI and global consumer prices have taken a sharp turn upward.

While this rate of price increase will have profound implications for business owners if it continues, that’s a story for another day.

Our story here affects these entrepreneurs more directly. Inflation comes as no surprise to those of us in the M&A business. We have watched for some time as the M&A market reheated and deal valuations reached levels not seen since 2007 – the peak of the financial bubble. We now have strong confirmation that this trend is not reserved solely for the megadeals on CNBC.

 

For larger deals that confirmation comes from Pitchbook which reported last week that, for the first half of 2014, average deal valuations reached an all time high of 11.5 times EBITDA.

 

 Median EBITDA Multiples for Buyouts (H1 2014)
For smaller buyouts, the story is the same. Andy Greenberg, CEO of GF DATA®, is in a unique position to understand middle market M&A pricing trends. His company maintains a very comprehensive database of actual transaction values in the sub $250 million marketplace. In our recent interview, Andy shared his perspective confirming our belief that lower middle market M&A purchase multiples have reached historically high levels over the past 12 to 18
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2013 Deal Valuations Reach All Time Highs; What’s in Store for 2014?

Posted on February 3, 2014

  Last March we predicted that middle market business sale values in 2013 could reach all-time high levels. Recent data from Pitchbook confirms that was in fact the case.

Source: Pitchbook

Not only were prices in relation to earnings before interest and taxes (EBITDA) at an all-time high, leverage used in the transactions reached record levels as well. To some extent this reflects a skewing toward larger transactions, but unquestionably we are now back to levels not seen since the run-up to the 2008 financial crisis. History tells us that such heady price levels will not last forever.

So what is in store for 2014? Does weakness in global stock markets mean that the game is over? Or can we look forward to a sustained period of high valuations? Is the past is to be our guide, the current favorable trends in the M&A market have some time to run. We previously indicated that we felt market strength could run through 2014. Recently we have received confirmation of that through a uniquely qualified source.

IntraLinks is the global leader in virtual data rooms with a 30% worldwide market share. For the uninitiated a virtual data room is an online space in which due diligence documents can be securely placed during an M&A process to facilitate due diligence and other deal related activities. As a result IntraLinks has a unique perspective on the merger and acquisition marketplace. They see deals that are moving toward closing as much as six months before any public announcement of the transaction is made. IntraLinks has aggregated this proprietary business intelligence to read the rest

Mid-Year 2013 Middle Market M&A Review

Posted on August 26, 2013

Q4-2012 was a heady time for the M&A business and almost every observer of the industry expected 2013 to be the year the deals business broke out of its five year post financial crisis funk. Best laid plans and all that — the low level of deal activity that has occurred to date in 2013 has both surprised and disappointed most industry participants.  Yet there are signs that this could change.

During H1-2013, deal volume fell off significantly, reflecting a cleared pipeline after the year end burst.  Fortune reported that global M&A announcements for Q2-2013 were the slowest since Q3-2009.  The U. S. market fared comparatively better, with the dollar value of announced deals up 34% year to year in H1 2013.  European activity on the other hand collapsed 43% with the Euro crisis and continental recession still in full swing at the time.  Even the relatively high level of U. S. activity depended in great part on the announcement of two large deals (Heinz and Dell) at the beginning of the year.  Without those announcements the U. S. market would have appeared lackluster at best.

The middle market companies we represent depend on both strategic and private equity buyers for business exits.  Most M&A industry observers believe that bulging corporate coffers and slow, organic growth will eventually dictate a strong increase in strategic M&A activity.  With the exception of a few target sectors, particularly IT related businesses, this corporate gold rush has yet to materialize.  As a result, private equity will be a more important source of buyside demand, at least for the near future.

PitchBook publishes a comprehensive analysis of U. S. private equity activity. Their first-half summary tells the story:

“Dealmakers were optimistic heading into 2013, anticipating one of the most active years for private equity (PE) investment since the financial … read the rest

What Does the Fed’s Prediction of Increasing Growth Mean for Business Owners?

Posted on July 2, 2013

  (Click on Picture to Watch Video)

Last month Chairman Bernanke spoke and the markets reacted by dropping more than 5% in a few days.  Clearly he must have shared some very bad news for business owners.

Actually not!  Coming into the year many observers thought that the federal budget sequester would put the economy at risk of stalling at best and dropping back into recession at worst.  Instead the Fed now foresees annual economic growth at 2-2.5% this year, moving to as much as 3.5% by 2015.  And it’s the private sector that’s carrying the load, not government programs.

Let me say that again.  The Fed now believes that growth is going to accelerate over the next several years.  As a result the economy may not need so much artificial stimulus (QE) going forward.  The economy is no longer digging a hole; we’re back to building a foundation of real economic growth.

What does this mean for the deal business and for private companies considering M&A or corporate finance transactions?  Bottom line: there is going to be much more demand for capital to fund growth.  Unless the banks step up to the plate, which we believe is unlikely, this capital must come from private lenders and equity providers.

The good news is that there is a great deal of financial market capital available to meet this need.  We just closed a mezzanine financing that gave us a good window into the market’s current appetite.  Over the past few years, major investors have made significant financial commitments to entities designed to fill the void left by banks which have abandoned their commercial lending franchise.  As a result today there are numerous private debt providers seeking opportunities to provide senior, hybrid and mezzanine capital to private companies.  Where equity capital is needed, private equity groups are … read the rest

Winds of Change: Banking

Posted on May 8, 2013

John Mason – Originally Published at Seeking Alpha – Reprinted with Authors Permission

Another Executive Leaves JPMorgan…” reads the headline of the business section in the New York Times. The question is, what is going on at JPMorgan Chase (JPM)?

The timing of this last leaving is raising questions. The latest major departure is Frank Bisignano, the co-chief operating officer. The questions are about the status of Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan, the “persistent executive turnover,” and the up-coming board meeting where a debate is raging about whether or not Mr. Dimon should hold both top positions.

To me, there are two reasons for the recent departure events. First, Mr. Dimon is in control and he does not like what has happened inside JPMorgan over the past two years or so, with “the London Whale” and other events that have tarnished the “bravo” image of Mr. Dimon and his bank. The activity going on inside the bank remind me of a “turnaround” operation!’

But, there is a second reason for the things that are going on. Mr. Dimon is moving JPMorgan into the future.

If this is true, then this whole effort is to move JPMorgan into the future in the face of the “hostile” regulatory environment that exists, in the face of the changes that information technology are forcing on the banking industry, and the changing nature of the financial industry.

If I were Mr. Dimon, my feeling would be that the current regulatory environment “sucks”!

Being John Mason, my feeing is that the current regulatory environment “sucks”!

In either case, the basic feeling is that I really don’t want to run a bank. I want to run something different.

Second, whatever is being done in the financial industry, the future of commercial banking…of finance … read the rest

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