The Industrials sector can be divided into ‘Capital Goods’, ‘Commercial & Professional Services’ and ‘Transportation’. These are typically companies midway down the value chain, partway between the Materials sector and various (semi-)finished goods. The Capital Goods group is generally comprised of B2B product companies with the exception of Trading Companies & Distributors, who provide a service. Commercial & Professional Services and Transportation companies can serve both the B2B and B2C segments.
With the exception of the professional services segment, this industry group is generally asset intensive. Capital assets can be owned, leased, or both. The Transportation group is relatively unique in the sense that concessions can be a major value driver. Commercial & Professional Services might be driven by customer relationships and Capital Goods driven by patents or proprietary designs. Companies in the Industrials sector can differentiate themselves by offering either innovative products or services, or by offering volume at bargain rates.
Industrials is one of AN Valuations’ strongest sectors. We have a wealth of experience across this sector, in particular with Purchase Price Allocation and other financial reporting valuations.