Sensors Empower the New Age Industrial Revolution

DENVER, CO – Sensor-enabled technologies are pervading practically all areas of life as the development of sophisticated and smaller sensing solutions has seen adoption levels grow across a number of markets, including automotive and transportation, industrial, medical and consumer electronics. Rocketing demand, combined with technological innovations and concepts such as the Internet of Things (IoT), will result in an impressive growth rate (far outpacing global gross domestic product [GDP]) for the global sensors market over the next five years.

“Leading sensor companies are collaborating with customers to develop high performance sensing solutions (focused on speed and precision) with ever decreasing footprints,” said Horacio Facca, Managing Director at Headwaters MB. “The integration of electronics, data acquisition and software analytics creates a differentiated solution and is a key driver of growth.”

As a result, the sensors market is experiencing robust mergers and acquisitions (M&A) activity as prospective acquirers are attracted by the sector’s growth potential, attractive end-market segments and the opportunity for margin expansion by providing solutions for complex applications.

Key conclusions from this report include:

Sensor innovation is driving dynamic market growth. Innovation in technology is creating huge demand for sensors. This, in turn, is driving robust market growth, with a compound annual growth rate (CAGR) of more than 7 percent expected between 2015 and 2019.
Sensing IoT Opportunities. The relatively new concept of the IoT (and Industrial IoT in particular) is a key future growth driver for the sensors sector. With some estimates suggesting up to 50 billion devices will be connected to the internet by 2020, sensors will play a pivotal role in facilitating these applications and companies will benefit from the strong demand that will follow.

M&A activity has been boosted by new market entrants. Traditional sensor players continue to be active acquirers as they seek portfolio expansion and opportunities in new segments. Meanwhile, companies from adjacent markets have added a new dimension to the M&A market by targeting sensor companies that offer strong cross-selling opportunities and help overcome barriers to entry. Targets have typically included (large and small) specialist sensor companies and divisions divested by industrial conglomerates.

Valuation multiples at historically high levels. Strategic acquirers are willing to pay high multiples (often well in excess of 12x earnings before interest, tax, depreciation and amortization [EBITDA]) in order to leverage new technologies, break into new markets, grow product portfolios and expand addressable market size.

Private Equity (PE) groups are also active sector participants. PE firms continue to deploy capital into the sensors market, completing approximately a fifth of all M&A deals since January 2013. Underlying market characteristics (such as fragmentation and high barriers to entry), along with the considerable growth potential, are likely to see PE buyers continue to invest in sensor businesses, particularly those that offer valuable intellectual property, unique technical capabilities and strong customer bases.

To download a copy of the full report, go to
http://info.headwatersmb.com/sensors-empower-new-age-industrial-revolution?utm_campaign=Media+Outreach&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-8QtorLhfVDzMSH85uBzlB4DUYZInJWYewPYdDLjljN8e2yW8wy7vwwgnL4VHAdiwCNYCIzKDCFAHpWO9zYNH6rF1MihQ&_hsmi=21365897

For more information, visit http://www.headwatersmb.com

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