CompositesWorld
Issue link: https://cw.epubxp.com/i/930524
10 CompositesWorld 2018: Bucking the M&A; trend FEBRUARY 2018 David Schofield, co-founder and managing director of Future Materials Group (Cambridge, UK), a leading independent strategic advisory firm, has 25 years' experience in the specialty chemicals/ advanced materials sector on a global level, with a focus on the areas of strategy and business development. Schofield previously held senior positions within Ciba-Geigy, Huntsman and Gurit AG. Corp. (CSP) by Teijin Ltd. gave the Japanese fiber and raw mate- rials producer a large boost toward its 2030 automotive compos- ites annual sales target of US$2 billion 3 . Just as interesting was LG Hausys' US$43 million acquisition of a majority holding in c2i, the Slovakian composite part manufacturer that supplies BMW, Porsche, Bentley, Jaguar Land Rover and a number of aerospace and industrial applications. LG Hausys is clearly looking to take its materials and composite solutions through to finished parts, in support of the parent LG Group's strategic growth targets in the automotive parts sector. Given the current surge in automotive composites develop- ment and the focus on electric vehicles, it's perhaps odd that we have seen so few major investments in composites technology from China — the biggest global EV market. And certainly, we have seen nothing on the scale of ChemChina's US$1 billion takeover of resin transfer molding and injection molding machinery specialist KrausMaffei in 2016. We speculate that this lack could be due, in part, to regulatory controls within China. at country could be seeking more control over overseas M&A; transactions in a bid to stem vast capital outflows that are putting pressure on foreign exchange reserves and the renminbi itself. Despite the additional scrutiny, Chinese buyers did show some appetite for Western firms: Advanced materials manufacturer Qingdao GON Technology, for example, acquired a majority stake in Compositence GmbH, a German firm specializing in rapid production of tailored preforms with carbon, glass and other fiber types for high-volume production applications in transport, aero- space and wind energy. It's been an intriguing year for M&A; activity, delivering some highly significant industry deals. Private equity investors and strategic purchasers have found the advanced composites sector attractive and an incentive to overcome "wait and see" market uncertainties. ey have brought their large available capital reserves to the sector in 2017. We expect this trend to continue into 2018, with significant M&A; activity driven by a variety of moti- vations, such as the need to acquire innovative technology or growth capital, to further consolidate the fragmented value chain or simply to satisfy the desire to create a position in an attractive advanced composites market. REFERENCES: 1 FMG research and PitchBook. 2 Rockwell Collins release, 04/13/2017. 3 Teijin press release, 01/05/2017.