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Boston, MA - Capstone Partners LLC, a national, middle-market investment banking firm, has released a research report on the Filtration industry citing strong consolidation drivers and continued interest from both strategic buyers and financial sponsors alike.  Capstone Partners expects the $35 billion global filtration market to experience a 15% to 20% acceleration in M&A activity over the next 12 to 18 months.    

 

Russell Chung, Capstone’s lead specialty products analyst, commented, “We believe that M&A activity will continue to increase in the filtration industry.   The market continues to gain attention from financial and strategic acquirers attracted by the market’s fragmentation and significant cash flow generation potential.  Additionally, global industrialization and economic development will continue to create new markets opportunities for filtration companies.”

 

In 2005, 3M’s acquisition of CUNO for $1.4 billion and Parker Hannifin’s acquisition of Dominick Hunter Group for $501.9 million garnered most of the attention in the industry.  However, Capstone believes that the majority of transactions in 2006 will include lower-middle-market transactions (i.e., $150 million and below) as buyers target niche acquisitions to address specific technological requirements and vertical applications.  

 

John Ferrara, Capstone’s President and Managing Partner, believes the M&A outlook in Filtration is positive, saying, “We expect filtration industry consolidation to expand into the small and mid-market.  Those smaller companies with footholds in higher growth segments, such as life sciences, semiconductors, and electronics will be among the most attractive targets. We expect that valuation multiples, however, will remain firm through 2006, as private companies continue to tap the M&A capital markets.”

 

To receive a complimentary copy of the Research Coverage Report on the Filtration Industry, please contact Russell Chung at 650-323-1600, ext 101 or at rchung@capstonellc.com