Industry Report: Manufacturing Q1 2025 [Bridgepoint IB]

Key Report Highlights

• Manufacturing Recovery Continues Despite Trade Headwinds
  U.S. manufacturing is regaining momentum with factory orders up 1.7% in January and over 100 million square feet of manufacturing space delivered since 2022. However, rising tariffs on Canadian steel and aluminum (now 50%) are inflating material costs and pressuring supply chains, with 62.3% of manufacturers citing tariffs as a top challenge.
• M&A Environment Strengthened by Favorable Policy and Private Equity Dry Powder
  A more accommodative regulatory stance and $3 trillion in projected private credit AUM by 2028 are setting the stage for a resilient M&A backdrop in 2025. Middle market sellers of high-quality assets remain in demand, especially those with strong performance during economic uncertainty.
• Sustainability and Functional Materials Are Driving Growth
  Rising environmental pressures are fueling demand for bio-based materials and advanced functional materials like Organic Frameworks used in carbon capture and clean energy. Companies investing in these innovations are attracting renewed investor interest, despite potential increases in operational costs.
• Sector Valuations Remain Bifurcated by End Market
  Chemicals and materials companies are experiencing bifurcated valuations, with specialties like paints and coatings trading at higher EBITDA multiples (13.9x) versus diversified producers (7.7x). Despite recent underperformance, the American Chemistry Council projects 3.5% global chemical growth in 2025, supporting long-term optimism.
• Private Credit and Lending Dynamics Favor Middle Market Deals
  Private credit firms are shifting focus back to middle- and lower-middle market transactions, while traditional banks regain ground. As capital becomes more accessible and interest rates decline, middle market businesses with unique value propositions are well-positioned to secure growth capital or pursue opportunistic exits.

Bridgepoint Investment Banking is a boutique investment bank focused on providing capital raising and M&A advisory services to middle-market companies across North America. Founded in 2012, the firm specializes in sectors including industrials, transportation, healthcare, business services, consumer, and technology.

With over 360 years of combined experience and more than 460 completed transactions totaling over $380 billion, Bridgepoint’s senior team brings deep expertise to every engagement. Headquartered in Omaha with offices in Chicago, Denver, New York, and Lincoln, the firm conducts securities transactions through M&A Securities Group, Inc., member FINRA and SIPC.

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