BGL Automotive & Aftermarket Insider -- Key M&A Themes Influencing the Automotive Aftermarket

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Dec 21, 2022, 18:51 ET

CHICAGO, Dec. 21, 2022 /PRNewswire/ -- Market conditions have shifted M&A strategies but not overall deal volume, according to an automotive aftermarket industry report released by the Automotive investment banking team at Brown Gibbons Lang & Company (BGL).

Access the BGL Automotive Aftermarket Insider: https://www.bglco.com/research/bgl-automotive-aftermarket-recap-sema-aapex-2022/

Market conditions have shifted M&A strategies but not overall deal volume, according to an automotive aftermarket industry report released by the Automotive investment banking team at Brown Gibbons Lang & Company (BGL).

Inside the report, BGL shares its annual recap from the 2022 SEMA Show, examining developments that are impacting M&A strategies in the automotive aftermarket.

Major automotive M&A themes influencing deal activity in the current environment include:

Economic uncertainty has shifted consumer spending away from new cars while maintenance of existing vehicles has increased, steering purchases toward DIY and DIFM products and non-discretionary services such as mechanical and collision repair. As a result, M&A transactions involving suppliers of replacement parts and repair equipment have seen an uptick in activity.
Supply chain challenges have abated but not entirely, leading some companies to rethink reshoring or near-shoring of production. However, companies with domestic production remain attractive targets for M&A. Vertical integration strategies are also being advanced through acquisitions.
Electrification is no longer an "if" but a "when" question as major automakers announce significant investments to accelerate adoption of electric vehicles (EVs), with EVs expected to eventually represent a large part of the car parc. Aftermarket companies that specialize in powertrain-related components must also have an eye to the future. Suppliers of powertrain parts have resorted to M&A to add capabilities that insulate themselves from obsolescence. Private equity has also been on the hunt for powertrain-related businesses with such plans.
American buyers love their trucks and SUVs, and vehicle market share has shifted as evolving preferences impact consumer buying behavior. Companies making aftermarket performance and appearance-enhancing products for trucks and SUVs continue to be attractive areas for consolidation.

About Brown Gibbons Lang & Company
Brown Gibbons Lang & Company (BGL) is a leading independent investment bank and financial advisory firm focused on the global middle market. The firm advises private and public corporations and private equity groups on mergers and acquisitions, capital markets, financial restructurings, business valuations and opinions, and other strategic matters. BGL has investment banking offices in Chicago, Cleveland, Los Angeles, and New York, and real estate offices in Chicago, Cleveland, and San Antonio. The firm is also a founding member of Global M&A Partners, enabling BGL to service clients in more than 30 countries around the world. Securities transactions are conducted through Brown, Gibbons, Lang & Company Securities, LLC, an affiliate of Brown Gibbons Lang & Company LLC and a registered broker-dealer and member of FINRA and SIPC. For more information, please visit www.bglco.com.