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 Advanced
Manufacturing 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 … 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

Are You Looking to Exit? The M&A Market is Ready for You.

Posted on June 16, 2015

Matt Porzio, Vice President of Strategy & Product Marketing for Intralinks has a unique perspective on the M&A market. Intralinks maintains the leading due diligence secure data room service in the world and, as such, has a window on a high percentage of global M&A activity as deals are being made.  Additionally, Intralinks offers a global deal networking service, DealNexus, through which thousands of buyers are provided a window on available offerings, particularly in the middle market. Using this unique position Intralinks publishes quarterly its Deal Flow Predictor gauging future M&A announcements based on the trends its sees in the usage volume of its services.  Matt’s observations on the current M&A market are presented below.

The M&A market for 2015 is looking bright – kicking off with a stellar start. According to Thomson Reuters, Q1 2015 saw over $854 billion in activity – the strongest quarter since 2007. Mid-market (deal valuation up to $500 million) deal volume was at $188.4 billion, with a year over year increase of 6.2 percent. From all indications, M&A will continue to be a leading growth strategy for companies, with rich exit multiples.

Multiple deal drivers are contributing to this rich environment, including activist pressure on strategics to tighten up balance sheets/refocus on core business lines.  Distressed sectors such as oil & gas are bringing a sizeable number of mid-cap deals to market, and the strongest volume of Q1 cross border activity since 2007. Financial sponsors, with plenty of dry powder, are also out to market in full force. According to Thomson Reuters, Q1 saw $171.3 billion in sponsor-backed deals – again the highest volume since 2007.

With financial sponsors coming in with plenty of dry power, deal-makers entering this space must have deep pockets and creative earn-out mechanisms in place in order stay competitive in any M&A situation. … read the rest

Categories: Business Acquisition, Business Sale, Investment Banking, M&A, Mergers, Mergers and Acquisitions, Middle Market, Private Equity, Valuation

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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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How Will the Market Drop Affect Middle-Market M&A?

Posted on October 16, 2014

We’ve previously reported that 2014 has witnessed a strong market with record valuations for many middle-market merger and acquisition transactions. This market strength has coincided with a powerful boom in public equity valuations as the S&P tripled from its 2009 lows. As the public equity market takes a breather, it’s time to consider the possible impact of a more significant equity market correction on middle-market M&A.

First, let’s take a look at the reality of the current situation – we are not in bear market territory for the overall market. That requires a 20% decline in value for the major Averages and as of this writing (October 14, 2014) we have only seen a drop of approximately 6%-7% in the broad market indices (S&P and Dow). For some specific sectors, however, this situation is not so sanguine. The energy sector, as measured by the XLE Energy Sector SPDR is now down more than 20%, offsetting gains in other sectors from the reduction in energy prices.

We certainly don’t have a crystal ball: while there is plenty of reason to believe that the current sell-off will continue for a while, we can make a good case that the market will move to new highs following the current sell-off. This has happened before; following the collapse of the Russian Ruble in 1998 and amid fears that one of the leading hedge funds of the era, Long Term Capital Management, would fail, the S&P suffered a precipitous 20+% drop from about 1200 to 950 in the summer of 1998.  Yet the market quickly recovered and over the following 19 months the S&P climbed approximately 60% to an all-time high of 1500 in March of 2000.  A similar trajectory today would show the S&P at 2500 and the Dow at 22,000 by the spring of 2016.

With that … read the rest

Categories: Business Acquisition, Business Sale, Economics, Investment Banking, M&A, Mergers, Mergers and Acquisitions, Middle Market

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Knowing When to Fold ‘Em

Posted on August 26, 2014

You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
Know when to run
You never count your money
When you’re sittin’ at the table
There’ll be time enough for countin’
When the dealin’s done

If you’re a Baby Boomer, you remember well hearing Kenny Rogers’ iconic hit, The Gambler.  If you’re like me, you’ve often wondered how Kenny’s advice might be applied to important business and investment decisions.  If you’re a business owner who has survived our generation’s version of the Great Depression, you need good counsel more than ever.

Perhaps you’re feeling pretty good about your prospects – business is improving and profits are as high as you’ve ever enjoyed.  Is now the time to go all in? Or is it time to cash your chips and leave the table for new faces?  The story below presents a dilemma faced by many business owners.  Names, industry identifiers and other client specific facts have been changed to protect confidentiality, but the dilemma described below is all too real and immediate for many business owners.

Our friend Frank Mayfield (not his real name) recently approached us with a dilemma.  Frank founded Limbtronics, a medical device manufacturer, thirty years ago to provide leading orthopedic doctors with specialized tools for performing innovative surgeries on damaged joints and ligaments.  Over time, he expanded into manufacturing surgical implants for complete joint replacements.  The business has been good to Frank and in 2013 Limbtronics had a record year with revenue of $28 million and pretax profits of more than $5 million.

Over the past fifteen years, Frank has seen several of his competitors acquired by global orthopedic giants such as Medtronic, Stryker, Smith and Nephew, and others.  He’s been approached a number of times, but never felt the time was … read the rest

Is This The Summer of 2007?

Posted on August 13, 2014

(Originally Published on Axial Forum)

The summer of 2007 was a great moment.  We were enjoying one of the strongest booms in both the debt and equity markets that any of us had experienced in our lifetimes.  Just the sort of markets we’ve been enjoying for the past year or so.  The leveraged lending markets have fully recovered from their low point following the market crash of 2008 and 2009 and volume reached a new high in 2013.  While market activity declined slightly in the first half of 2014 from the prior year, current activity levels remain very high.

The question of the day:  Are we, like Bill Murray in Groundhog Day, destined to endlessly repeat this cycle with limited ability to prevent a repeat of the disaster that befell us in 2008-2009.

We’ve just interviewed one of the world’s leading authorities on the private debt markets to help us better understand the current state of the debt markets and what this portends for the level of deal activity going forward.  Randy Schwimmer was a pioneer in developing middle market loan syndication markets in the 1980s, leading the effort for what is now J.P. Morgan and later BNP Paribas.  With a small group of partners he formed Churchill Financial in 2007.  They were successful in raising a $1.2 billion loan fund before the financial crash closed the markets and were left with more than $500 million of dry powder after the crash.  Leveraging this success, they were acquired by Carlyle in 2011 where they began building that firm’s private debt business.

Randy has now left Carlyle to restart his weekly publication covering the private debt markets, which is now called The Lead Left.  This has been a must read for years for anyone who wants to understand this arcane and somewhat opaque, … read the rest

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

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