If you’re thinking of flashing the cash and getting involved in the merger and acquisition part of the fenestration market, then the PVCu window manufacturers part of the market might be a good place to start.
The latest research by Plimsoll highlights that in the PVCu window fabrication market alone, there are 120 “highly attractive” companies that are “ripe for takeover”. A further 325 have been identified as “worth considering”.
Click to view Plimsoll sector summary
So, what is making so many PVCu fabricators an attractive M&A option, when the market is in decline, rather than expansion?
Changing demand presents opportunities
I think that the very fact the PVCu fabrication market is on the decline is the reason why so many companies have been identified as good takeover targets.
Rising demand for timber and aluminium windows and doors in the residential market has taken some of that market share away from the once massively dominant PVCu sector. The landscape has since changed and PVCu dominance has waned.
That’s not to say that PVCu fabrication is going down the drain. Rather, some of the deadwood is being cleared out, and the companies that are left fabricating are the ones that are worth keeping.
It’s not that PVCu fabrication has got worse. Just that demand has begun to shift, so the industry doesn’t need as many companies of that type any more. That is why we have seen the number of PVCu window manufacturers decline in the last few years. Periods like this see the weakest disappear, and the best left standing. It’s these that then become targets for larger business looking for acquisition options to grow their market share and influence.
It’s not all roses
The Plimsoll summary on this sector isn’t perfect however. They have identified 88 companies that are making a loss and 45 companies that have lost over a quarter of their value in the last year. 62 PVCu window manufacturers have been identified in “danger”. There is still plenty of room for companies to go under, even during fairly strong trading conditions.
This does underline the growing weaknesses in the PVCu fabrication part of the market. The change in consumer demand has caused a few cracks to appear in this part of the market.
It’s not all bad. Although 45 companies have lost more than a quarter of their value in the past 12 months, 227 have increased their value.
This for me shows that as more PVCu fabricators exit the market, the ones that remain, if they’re proactive enough, can capture the leftover market share to their own benefit. This is what I believe we are seeing in these figures and it will only continue as home owner demand continues to shift towards a more varied spread.
The research from Plimsoll on the PVCu window manufacturers sector only forms part of a wider menu of industry sub-sectors. In total there are 25 report summaries in 25 different fenestration sectors. I will be looking at many of these to ascertain the overall health of the industry. But for now, if you wish to browse these reports, or find out how to obtain these reports in greater details, you can click here to go to Plimsoll’s website, or email: firstname.lastname@example.org or call: 01642 626 419
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