Distribution ups and downs: an M&A boom, significant disruptions
Distribution Spot On
This is a difficult moment for the distribution sector, with a range of issues causing problems to supply chains at both local and international levels. While some of the disruption is down to the ongoing effects of COVID-19, logistics companies were already having to deal with certain pressures before the start of the pandemic. However, despite this situation, M&A activity in the sector has experienced a boom in the first half of 2021, albeit with lower valuations compared to last year.
Serious supply chain disruptions continue, benefitting some logistics companies and hurting others. However, the distribution sector remains strong, thanks in particular to value-added companies that provide specialty services, sub-assembly, fulfillment and other services. Ocean vessel backups and shortages of labor, trucks and containers will continue to be problematic at least into 2022.Don Wiggins, Distribution Specialist, Oaklins
Our latest Distribution Spot On explores these trends. In addition, we analyze how each of four subgroups within distribution – healthcare, industrial & capital goods, consumer goods, and food & beverage – has fared in recent times, focusing particularly on public company valuations and valuation trends.
To get a feel for the impact of the current stresses on supply chains, and what solutions the industry is looking towards, we spoke to three leading players from business and private equity. We hear from them about facing these challenges, becoming more visible to improve logistics and the role technology can play going forward.
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