Newsletter

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Cyberattacks: A potent reminder of technological vulnerabilities in the age of automation.

High profile cyberattacks are a potent reminder of growing technological vulnerabilities as manufacturers implement higher levels of automation. Adoption of “Industry 4.0” technology infrastructure is increasing the attack surface to include legacy systems not designed to defend against today’s sophisticated cyber criminal or rogue nation. Ransomware can trigger financial losses, but disruption to production and supply chains can cause harm beyond the initial shake-down. Breaches such as the Colonial Pipeline and SolarWinds attacks grab headlines and underscore the need to defend operations and silo production networks from companies’ external facing business networks. In response, manufacturers should audit not only their existing cyber defenses, but also the resiliency of their operations in the event of a cyber attack. 

Cybersecurity plays a vital role in M&A strategy and execution. Firms considering a transaction should understand risks present in the form of data leaks, ransomware, and opportunities for malicious actors to use a transaction as a way to break into an acquiring company. According to IBM, more than half of companies wait until due diligence is completed to perform cybersecurity assessments. Considerations surrounding data privacy regulations, mandatory disclosure laws, and the risk of business interruption should be a priority for sellers and acquirors from the early stages of the transaction process.

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A capacity crunch amidst high demand

A capacity crunch throughout the transportation, logistics and warehousing sectors continued through the end of 2021. Shifts in consumer spending, tight capacity, supply shortages and ongoing coronavirus threats have impacted how shippers and carriers do business. 

Demand for goods and materials continues to outpace the supply needed to produce and transport goods from points of production to consumption.  U.S. consumers have shifted their consumption habits from services to durables, driven by the pandemic and more time spent at home. Closely related is the trend toward faster and more frequent deliveries, which continues to spur growth in final mile. 

We’ve highlighted some of the key themes that impacted the transportation & logistics industry in 2021 and where shippers and carriers have focused their efforts to combat the supply chain challenges and capitalize on the heightened demand. 

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Carbon Capture: The Future or a False Start?

Environmental, Social, and Governance (“ESG”) investing has established itself as a serious investing niche, with global sustainability fund assets almost doubling over the past six months through September to $3.9T. Encouraged by regulators worldwide eager to show their commitment to tackling wide-ranging equality and environmental issues, investors and companies alike are investing and marketing themselves as responsible and sustainable corporate citizens. Enter carbon capture, while high hopes for CCUS (Carbon Capture, Utilization, and Storage) technologies over the past decade have been a litany of false-starts and delays, this time may be different.

In this newsletter, we will demonstrate the impact of renewed investment and focus on CCUS applications for key Industrials and Manufacturing sectors and how the related M&A market has performed in the Q4 2021.

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G2 Capital Advisors is pleased to present its Industrials & Manufacturing industry update for Q3 2021, providing commentary and analysis on M&A and market trends within the Industrials & Manufacturing sectors.  We hope this report finds you and your families safe and healthy, we encourage you to contact us directly if you would like to discuss our perspective on the current market environment, trends, or our relevant industry experience.