“Welcome to our latest CASPI Industry Insight, giving you a glimpse on market sizes, trends, M&A transactions as well as industry valuations.
Recently, we can observe interesting market conditions with continuously increasing global demand, technological innovations and a fragmented market, creating attractive M&A opportunities. Especially the coatings & paints and the adhesive & sealants market show active consolidation by major market players, combined with relatively high multiples.”
Global CASPI Market
-Coatings and Paints, Adhesives and Sealants, Specialty Polymers and Inks are forecasted to continue their stable growth rate, due to increasing use in the electronics, construction, packaging, automotive and aerospace industries. During the period 2019-2025, the CASPI market is expected to grow at approx. 5.9% p.a., with adhesives and specialty polymers forecasted to grow the most
– Geographically, Asia Pacific will be the fastest growing region due to its growth-economies and resulting demand for the end products. Europe stays a generally fragmented market, with ample M&A opportunities
European Coatings and Adhesives Market
– Europe represents approx. 15% of the global paint and coatings market and has a semi-consolidated market, with big players amassing roughly 50% of the market
– Germany, the U.K. and France, amongst others, are expected to show robust construction activities, thus creating growth for architectural coatings – the biggest coatings segment in Germany and the U.K.
– The European adhesives and sealants market amounts to approx. USD 19B and is expected to show medium growth, with Germany being the largest market accounting for more than 20% of the total European market
Sources: Reuters, Mordor Intelligence, Coatings World, Market Watch, Globe News Wire
Coatings & Paint
– The global coatings and paints market is still very fragmented, with stable growth forecasted, thus presenting attractive M&A opportunities
– Key drivers for the coatings market are GDP growth, construction activity, automotive and aerospace industries – all of which benefit from an increasing global demand, developing alternative energy sectors (i.e. electric vehicles and wind turbines), technological advancements and low interest rates
Adhesives & Sealants
– The adhesives and sealants market is primarily comprised of the construction, packaging and assembly sectors (together representing approx. 75% of the entire industry)
– Adhesives and sealants are becoming a prime component in automotive applications, since they are replacing more conventional adhesion methods
– They are also beginning to be used in the healthcare sector, for instance in surgical instruments, hospital equipment and also on walking canes or cast boots
-Specialty polymers represent approx. 29% of the total USD 700B polymers market
– The specialty polymers market is fragmented and is forecasted to grow (with Asia Pacific leading) due to increased consumption in the packaging, construction, electronic and healthcare industries
– Overall, the ink market is consolidated, with five players accounting for more than 40% of market share. In Europe, moderate growth is expected at a CAGR of 2.8%
– The digital press is enabling versioning and personalisation in food and beverage sectors, which enables rapid customer response. For instance, Coca-Cola took advantage of the digital press, with its ‘Share a Coke’ campaign
M&A Insights CASPI
Trading Multiple Comparables
– Especially the coatings and the adhesives industries, show M&A attractiveness due to their profitability combined with very low levels of indebtedness and with forecasted growth to remain stable
– For the coatings and adhesives peer group, EV/EBITDA (NTM) multiples stay within a stable range of 9 to 13x EBITDA
Note: The peer groups are formed out of international stock-listed companies. For calculation purposes, two-year averages of consensus estimates on a next 12 months (NTM) basis were used
Key Performance Indicators
Source: Infront Analytics – Sazun Global Coatings Peer Group
Selected Transactions 2019
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Your SAZUN Team