Innovation Archives - Lincoln International LLC

Innovation and Advancements in Packaging Technology

Zoe Kofkin — Mon, 17 Apr 2023 20:57:53 +0000

Advancements in packaging across both active and passive technologies continue to revolutionize the industry as new features, functionality and capabilities broadly become more available. Packaging companies have an increased emphasis on differentiating themselves in the market through unique, tech-enabled offerings as customers have demanded more innovative solutions. As a result, mergers and acquisitions (M&A) continues to be an attractive strategy for acquirers to pursue new technologies to drive growth in their existing platforms.

In the below perspective, Lincoln International explores the evolution of packaging technology as well as M&A opportunities.

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Beauty Outlook: Optimism for an Attractive 2023

Zoe Kofkin — Mon, 20 Mar 2023 12:37:48 +0000

Many investors are eyeing the year ahead for the beauty and personal care industry as it is ripe for accelerated growth due to several factors. 2022 had a key focus on sustainable beauty and the industry experienced great growth across its core categories. In 2023, brands are launching new and more inclusive products that are changing the definition of beauty, yielding an overarching holistic approach to the beauty and wellness theme, and keeping consumers engaged. As a result of ongoing consumer interest in the beauty industry, investors are increasingly interested in the category, and mergers and acquisitions (M&A) activity is expected to pick up later this year.

In the below perspective, Lincoln International further examines the trends that shaped 2022 and those that will usher the industry into a new frontier in 2023, resulting in a positive M&A outlook for the second half of the year.

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UK Hospitality: Unlocking Hidden Value

Zoe Kofkin — Wed, 11 Jan 2023 16:57:09 +0000

The hospitality industry has experienced several challenges over the last few years, which at times has led to valuation concerns amongst investors. However, an opportunity presents for businesses to attract investor interest – by unlocking hidden value.

Below, Lincoln International dives deep into the challenges affecting the industry, prevalent market dynamics and how businesses can demonstrate value.

Challenges

Labor Shortages: Brexit resulted in labor shortages in the UK; and other more recent economic factors caused shortages in the rest of Europe. In addition, as of 2021, 20% of the UK working age population is economically inactive, further compounding labor challenges.

COVID-19: Lockdowns and pandemic-related concerns significantly reduced demand in the hospitality industry, especially in previously high traffic cities.

Rising Costs: Costs are increasing due to inflation across all areas – labor, energy, ingredients, cost of living, etc. – negatively impacting price and consumer demand for the hospitality industry.

Market Volatility: Uncertainty in the markets has caused investors to become risk averse, particularly in areas more reliant upon discretionary spend.

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Art of the Deal-by-Deal Fund

Zoe Kofkin — Thu, 08 Dec 2022 16:13:04 +0000

Deal-by-deal investing has become an increasingly popular strategy for financial sponsors in Europe. Unlike the traditional private equity (PE) approach of raising a fund and deploying it over the course of several years, deal-by-deal firms raise capital for each opportunity separately. Each transaction is funded with capital sourced from the most suitable investors with terms tailored to the situation.

In the right situations, the deal-by-deal model can offer advantages, particularly in a dislocated market. PE firms that raise capital from limited partners (LPs) under pre-agreed conditions can be constrained from making more opportunistic investments that would have an attractive return profile in a turbulent market. In what has become a spot market for mergers and acquisitions (M&A), a deal-by-deal approach could yield significant returns to investors whilst benefiting all stakeholders.

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Automated Storage and Retrieval Systems – Combining Efficiency, Speed, Accuracy and Safety

Khushboo Parekh — Fri, 05 Aug 2022 11:10:41 +0000

E-commerce sales are currently approximately 22% of retail sales and are expected to increase to approximately 30% by 2025.[1] Increasing order volume, combined with an expectation of fast delivery and growing SKU counts, has brought material handling automation to the forefront for retailers and logistics providers.

Many businesses are choosing to invest in automation to increase warehouse efficiencies, reduce labor costs and shorten fulfillment cycles. Amidst a global labor shortage, fulfillment centers are struggling to hire, retain and keep safe the employees necessary to fulfill online orders. Companies are more motivated than ever to invest in automated storage and retrieval systems (AS/RS) to optimize inventory management.

AS/RS solutions are computer-controlled systems that automatically handle, store and retrieve loads from set locations in a facility. These technologies work in varying levels of collaboration with employees and range from mobile robots that move alongside employees to collect goods to more advanced automated solutions that automatically pick, combine and transport goods within a fulfillment facility.

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Adopting Alternative Strategies – How Partnering Expertise Can Help

Zoe Kofkin — Wed, 27 Apr 2022 17:48:30 +0000

Company leaders around the globe are facing uncertain business conditions, including geopolitical tensions, inflation, continuing supply chain problems and raw materials shortages. Economies are only just beginning to recover from the impacts of the COVID-19 pandemic. Stock markets are volatile, as the contingent, mid-term impacts of current conditions remain unpredictable.

In response to such uncertainty, many business leaders and dealmakers are evaluating plans to potentially seek alternative ways to achieve their goals with more flexibility.

Planned mergers and acquisitions (M&A) may, in some cases, not be best pursued right now. However, the economic environment may also create timely opportunities. Now could be the time to accelerate or reprioritize investment, especially where innovative technologies are involved. At moments like this, partnering—in one form or another—may be the answer.

Deciding whether, where and how to partner—and with whom—requires a careful, structured approach, especially against the backdrop of an uncertain macroeconomic environment. The right choice will depend on factors like the speed of technology development, the urgency of emerging customer and market needs, the availability of attractive partners and a business’s own strategic priorities, internal capacity and capabilities.

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M&A Trends in Japan: Q&A with Director Kenji Uemura

Zoe Kofkin — Tue, 05 Apr 2022 15:31:20 +0000

Lincoln International recently welcomed Kenji Uemura, a Tokyo-based Director, to the firm. With unique experience heading the India-Japan mergers and acquisitions (M&A) business in Mumbai and his extensive work in cross-border dealmaking, Kenji is excited to join the Lincoln team.

As Japanese strategics look to expand their geographic horizons by pursuing M&A, Kenji shared his insights on cross-border dealmaking and considerations for the year ahead.

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Business Leaders Adjust Investment Strategy in Light of CO2 Emissions Standards

Zoe Kofkin — Fri, 25 Mar 2022 19:30:34 +0000

As governments and company stakeholders continue to increase their focus on reducing emissions, the shift from fossil fuels to green energy is shaking up almost every sector—resulting in energy efficiency strategies and alternative fuels for many businesses. Large institutional investors are seeing an opportunity within this shift, creating new investment strategies, driving increased demand for environmental, social and governance (ESG) performance metrics and seeking long-term investment value. New ESG rating providers have emerged to measure environmental performance, climate risk mitigation and renewable energy use, aiming to enable broader comparability across companies.

Recently, BlackRock announced it has raised $673 million for the Climate Finance Partnership, a new infrastructure fund dedicated to projects addressing climate change in emerging markets. Larry Fink, Chief Executive Officer (CEO) of BlackRock, reemphasized in a 2021 annual letter to CEOs that actions towards sustainable investing and decarbonization continue to accelerate. This is just one example of major asset managers adjusting their capital allocation strategy to align with goals to reduce carbon emissions.

As C-suite leaders and portfolio managers work to comply with evolving regulations and set themselves up for successful future growth, the impact of carbon on business valuations as well as corporate investment and divestment strategies become new areas of focus.

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Private Equity Pursues Investments in Engineering and Manufacturing Software Sector

Zoe Kofkin — Tue, 22 Mar 2022 22:55:19 +0000

Engineering, simulation and manufacturing software is in high demand as companies across industries shift toward digitizing processes. From the early stages of product design and simulation to manufacturing and usage in the field, these software solutions enable more reliable, efficient and cost-effective outcomes.

In the last few years, investor demand for engineering, simulation and manufacturing software has generated heightened valuations nearly double previous levels, with some investments generating outlier returns. What was previously a target for highly specialized funds or large strategic players has become an important investment opportunity for private equity writ large.

Lincoln International expects valuations will continue to rise due to the technical barriers to entry in the sector. This area of extremely sophisticated technology is often developed by highly skilled engineering teams with a considerable amount of intellectual property and trade secrets. In addition, many companies in this area have a long-standing history and research around an engineering discipline or access to industry experts who develop products to address critical gaps in existing solutions. Further, recent supply chain challenges have solidified the importance of simulating design and digitizing manufacturing processes instead of relying solely on physical prototyping of products and processes to get to market. Together, these factors have generated significant deal activity in the engineering, simulation and manufacturing software space over the last two years—and activity shows no signs of slowing.

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Long-Term Trends Underpinning Utility Services M&A

Zoe Kofkin — Wed, 09 Mar 2022 18:00:34 +0000

Investor interest in utility services will remain high given the numerous attractive tailwinds that underpin the sector’s resiliency and growth potential. For telecom, power, gas and water/wastewater, regulatory and public pressure to improve aging infrastructure will grow due to the need to enhance reliability, safety and efficiency, while also minimizing environmental impact. In turn, these utilities will call for high-quality, reliable and safe service partners to meet their critical infrastructure requirements.

M&A momentum in utility services will continue in 2022 due to keen investor interest and strong valuations for high-quality platforms, thus presenting sellers with plentiful opportunities. Leaders within Lincoln International’s Energy, Power & Infrastructure Group gathered to discuss the trends and themes expected to play a role in ongoing investor interest in the space for the year ahead.

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