Mergers and Acquisitions in the Adhesives and Sealants Industry
Keynotes at the ASC Convention and Expo will include talks on mergers and acquisitions, as well as other industry trends.
The three-day Adhesive and Sealant Council (ASC) Spring Convention and Expo, which will be held April 18-20 in New Orleans, will include concurrent technical sessions focusing on business development and market trends, government relations issues, and advanced technology (see the Preliminary Program on p. 18), as well as an Expo. The event will also include several informative keynotes, including Thomas Blaige, chairman and CEO of Blaige & Co., who will present the Wednesday closing keynote, “Lead, Follow, or Get out of the Way: Global Consolidation in the Adhesive & Sealant Sector.”
I recently had the opportunity to speak with him and discuss how global consolidation has affected the adhesives and sealants industry.
Could you give us a quick preview of what you’ll be talking about at the convention?
Everyone knows there’s a global consolidation occurring in the adhesives and sealants sector, similar to many other sectors in the industrial market. But we’re going to be dissecting the reasons behind global consolidation in adhesives and sealants. We’re going to look at the drivers of this consolidation, at the various components of the supply chain to see where the driving or consolidation is occurring most, and at the widening gap between the large participants and the smaller participants.
What we’re finding is that there’s a huge consolidation trend among the large players, but the mid-cap and small-cap companies have not been adaptive in this consolidation. There’s tremendous pressure on these companies to compete, and it’s becoming more difficult. They need to make strategic decisions as the consolidation continues. We’re going to look at this effect on sellers; it’s a seller’s market, so we’re going to be talking about why adhesives and sealants companies are so attractive to potential buyers and why there’s so much M&A activity in the sector. And finally, we’re going to end with some strategies that small- and mid-cap companies can deploy to maximize their outcome in this whole consolidation trend.
How has the industry benefitted from merger and acquisition activity?
The merger and acquisition activity has been driven largely by globalization, so what we’re finding is that, in the supply chain, suppliers to the adhesives and sealants sector are consolidating and becoming more global in their capabilities. And downstream, customers of the adhesives and sealants companies have been going through their own consolidations as well.
The benefit of the mergers and acquisitions has been that it has helped the companies in adhesives and sealants to keep up with the requirements of increasingly large, global, and broad suppliers and customers. These customers are looking for suppliers that have global capabilities when they are global companies, and suppliers are favoring adhesives and sealants companies that can purchase larger quantities. The primary benefit of the consolidation is that adhesives and sealants companies can be more competitive and better serve their customers, which are growing and becoming more and more global. Really it’s helping them to keep up with the needs of their suppliers and customers.
In addition, the consolidation trend has attracted a tremendous amount of capital to the adhesives and sealants sector, and that capital is something that these companies have been able to deploy to grow again and meet the needs of their customers.
What should adhesives and sealants professionals expect in the future?
The presentation that we’re going to give at the Adhesive and Sealant Council Spring Convention is important not only to owners and CEOs of adhesives and sealants companies, but also to the people who are in business development and marketing, as well as the technical side and engineers. It’s also important to the folks who in support roles.
The reason for that is that this merger and acquisition trend is really affecting almost all employees and nearly all companies across the sector. If middle managers and technical and business development folks are aware of the trends in M&A and how they’re affecting adhesive and sealant companies, not only is that relevant to the strategies of companies themselves, but also in terms of career choices, professional development, and advancement within their organization, and in sizing up your company to see if it is a viable success―one of the winners in the consolidation trend. Those who are not owners and CEOs can benefit tremendously from this merger and acquisition activity, and it opens up a lot of opportunity for advancement and to use this activity as an area of experience and a strategic tool, career-wise and professionally, as well as strategically for the company. People who embrace the M&A trend and who get involved in deals in their company will be perceived as much more desirable by employers.
For more information, visit www.ascouncil.org.