Interior image of a manufacturing facility.

Baird’s Continued Success in Flow, Motion and Power Technologies

Baird Global Investment Banking’s Flow, Motion and Power Technologies team delivered another year of strong activity in 2024. With the shift in focus to 2025, we anticipate healthy levels of M&A activity based on the sector’s established secular growth drivers and the expectation for improving M&A fundamentals over the course of the year. Several key themes drive our outlook for 2025:

Demand Sentiment Improving

  • Industrial markets appear to be in early stages of a rebound with a broader industrial recovery expected in H2 2025 after several years of headwinds from higher interest rates, destocking and uncertain macro conditions impacting investment decisions
  • Strong secular drivers remain across themes such as water quality, infrastructure spending, nearshoring and investment in automation and digital capabilities, with newer themes such as data center build-out and power generation / grid investment to support data centers driving above-market growth for some companies
  • Destocking-driven softness appears to have bottomed, and a more “normal” demand-driven cycle is anticipated; lean inventory levels should help drive increased growth
  • Demand dynamics in Europe and Asia are lagging North America but are expected to follow the U.S. recovery

 

Strong M&A Outlook

  • M&A and capital allocation are an increasingly important lever for companies today given more muted recent organic growth – effective M&A is seen as the #2 biggest growth catalyst for the sector after cyclical recovery
  • Longer-dated PE funds, more constructive lending markets, improved demand dynamics and continued corporate divestiture activity are expected to improve asset availability and support increased M&A activity in 2025
  • 2024 saw an upswing in corporate divestiture activity as companies look to ensure transparent linkage to secular growth themes – divestiture activity should continue into 2025

 

Changes from Incoming Administration

  • New administration largely seen as “pro-business,” with a lighter regulatory environment, lower corporate tax rate and drilling-friendly energy policy expected to support sector growth; relaxed antitrust governance should serve as a tailwind for dealmaking
  • Deregulation could have differing impacts across industries (i.e., water quality and clean energy); however, water regulation tends to be bi-partisan and companies generally take a longer-term view on sustainability themes
  • Uncertainty remains around the impact of new tariffs (especially on Mexico or Canada), though companies are broadly showing confidence in ability to “weather the storm” given prior experience


Our continued market leadership in the Flow, Motion & Power Technologies sector is evidenced by our team’s significant recent transaction momentum in 2024:

  • SJE Acquires Revere Control Systems – Provider of controls and automation solutions for water and industrial applications
  • MIRATECH Is Acquired by TPG Rise Climate - Market leader in critical emissions reduction technology and compliance solutions
  • MOGAS Is Acquired by Flowserve - Provider of mission-critical severe service valves and associated aftermarket services
  • ASC Engineered Solutions Refinancing in Partnership with KKR and Apollo – The premier engineered, flow management solutions provider offering customers proprietary products, custom solutions and supply chain flexibility.
  • Cleaver-Brooks Is Acquired by Miura - Leading provider of fully integrated, efficient boiler systems and services

This transaction velocity is a clear reflection of the continued demand for assets in this space by strategic and financial acquirors on a global basis and bodes well for an active market in 2025.

SJE Acquires Revere Control Systems

SJE Acquires Revere Control Systems

MIRATECH Sold to TPG Rise Climate

MIRATECH Sold to TPG Rise Climate

MOGAS Sold to Flowserve

MOGAS Sold to Flowserve

ASC Tailwind tombstone card

ASC Engineered Solutions Refinancing in Partnership with KKR and Apollo

Cleaver-Brooks Sold to Miura

Cleaver-Brooks Sold to Miura

To discuss these recent deals and learn more about the key themes affecting the space, connect with Baird’s Flow, Motion and Power Technologies team.

Joe Packee
+1-414-298-7644
jpackee@rwbaird.com

Nick Sealy
+44-20-7667-8370
nsealy@rwbaird.com

Steve Guy
+1-414-765-7247
sguy@rwbaird.com

Jen Roeper
+1-414-298-1921
jroeper@rwbaird.com

Dale Rudow
+1-414-298-7495
drudow@rwbaird.com

Jack Bazal
+1-414-298-7782
jbazal@rwbaird.com