Brown Gibbons Lang: Capital Flowing to Energy and Environmental Services – Halifax Quote by Scott Van Duinen
CLEVELAND, OH and CHICAGO, IL — (Marketwired – December 31, 2014) – The energy and environmental services sectors are benefiting from strong secular growth and attracting broad investor interest, according to the Environmental Services Insider, an industry report released by Brown Gibbons Lang & Company (BGL) www.bglco.com.
The BGL report, now available online, documents clear positive investor activity-merger and acquisitions activity is high, lending appetite is robust, and deals show increased interest and competition.
“Broadly, there has been a tremendous amount of deal activity. With the current lending environment, there seems to be interest in pretty much every environmental sector — solid waste, liquid waste, environmental services for the energy sector, engineering services, etc.,” said Michael Castellarin of Clairvest Group, one of 10 firms that participated in the report.
The Environmental Services Insider reports an optimistic investor outlook with demand drivers of regulatory change, energy development, and infrastructure revitalization expected to sustain industry growth. Sectors are undergoing consolidation with fragmentation advancing acquisition growth strategies in value creation.
“Consolidation is going to be dramatic. That is why private equity is investing in the sector,” said Scott Van Duinen at The Halifax Group. “Private equity is going to pursue buy-and-builds, as it looks for ways to generate returns when so much debt is available, driving up prices. It is a favorable backdrop for energy and environmental services companies.”
“As private equity investors, one of the opportunities is to find those regional businesses that have competitive differentiation in their marketplaces but can’t access the necessary capital to grow,” said Robert Michalik of Kinderhook Industries.
Private equity funds have amassed more than $518 billion in capital that is waiting to be deployed. Ample liquidity is expected to help support M&A activity with investors likely to maintain an aggressive posture into 2015.
BGL publishes periodic Insider research publications. The middle market investment banking firm based in Cleveland and Chicago releases reports on a variety of industries including automotive; consumer products; building products and construction materials; energy and environmental services; healthcare and life sciences; industrials; metals; and plastics and packaging. Download BGL Insider reports at bglco.com.