Since the Industrial Revolution, manufacturing has been the backbone of modern society. As one of the largest industries in the world, it’s also one of the more consistent areas of investment for private equity firms. And now, rampant and revolutionary technological changes are creating a wealth of opportunities for firms that know where to look.
To help dealmakers understand how manufacturing is changing and give a sneak peek at the companies making the most strides, we've put together a list of the industry's trends and the fastest-growing private manufacturing companies today. Let's dive in!
Manufacturing continues to be one of the largest global industries. For the US alone, manufacturing contributes over 12% of the nation's GDP. Global output is projected to be nearly $72 trillion this year and is expected to grow at a compound annual growth rate (CAGR) of just over 14% through 2028 and reach $139 trillion.
Despite the industry's growth, there are still many opportunities for advancement, particularly in digital transformation. While some manufacturers have made on-the-floor and equipment upgrades with robotics and AI-assisted machinery, many have not yet made the commitment.
It's estimated that only 27% of manufacturers have adopted robots into their manufacturing processes. With the surge of interest in AI and the steep decline in the cost of robotics, manufacturers that learn to take advantage of new technology are sure to grow at a much faster pace than their competitors.
Similarly, technological advancements in other parts of the business, such as front-office software (e.g., ERPs, CRMs, etc.) provide additional opportunities for businesses that are paying attention. Streamlining sales processes and augmenting the abilities of their human employees is yet another way manufacturers can both reduce costs and increase productivity.
Recent world events have led to supply chain disruptions and are part of the manufacturing industry trends that have increased risk for manufacturers. These events include the COVID-19 pandemic, the Ukraine-Russia war, and the Israel-Hamas war — not to mention rising material and labor costs.
Inflation itself is, unfortunately, a huge cost driver for manufacturers. Prices increased 33.9% in just two years between July 2020 and July 2022, according to the National Institute of Standards and Technology, while they had only risen 27% in the 15 years prior.
These challenges have made risk mitigation imperative both for firms investing in manufacturing as well as the manufacturers themselves. Consistent supply chain issues have also made reshoring and nearshoring activities more appetizing as world events have continued to hinder the industry.
ESG and sustainability have long been concerns for manufacturers. Unfortunately, much lies outside manufacturers' control. Every part of the supply chain, from suppliers to logistics and distribution, must invest in sustainability if it’s going to make a collective difference.
But increasing consequences, mounting regulations, and clamor from society mean ESG must be a part of manufacturers' growth strategy now. Investments that can help create or further that strategy will likely be especially fruitful. With a third of total US assets under management (AUM) now sustainable investing assets — a 42% increase since 2018 — private equity is ready to help the manufacturing industry take the next step toward a more sustainable future.
To better understand what the fastest-growing private manufacturing companies have in common, we used our deal sourcing platform, Sourcescrub, to find the top 50 in the world based on their 3-month growth rate.
Amidst recent supply chain issues, it seems recent reshoring and nearshoring efforts are launching some companies to grow much faster than others. The top manufacturing companies on our list hail from only three countries: the United States, the United Kingdom, and Canada. The US has the highest percentage at nearly three-quarters of the group (70%), while the United Kingdom and Canada are represented at 18% and 12%, respectively.
Similar to the companies' headquarters locations, the organizational size of the top manufacturing companies is spread across just three categories. Over 3 in 4 of the fastest-growing private manufacturers (76%) have 11 - 50 employees, with the second most popular category, 51 - 200 employees, representing 20% of the group. Just two companies (4%) in the list have 201 - 500 employees.
Almost all the top manufacturing companies were founded within the past 25 years, with one outlier. Over half the list (58%) were founded between 2010 and 2019 with the previous decade, 2000 - 2009, coming in second at nearly a third (32%) of the list. Just four companies (8%) were founded in the years since 2020, and a single company (2%) was founded all the way back in 1961.
The most surprising — and homogenous — distribution in the list was estimated revenue. 49 of the top 50 fastest-growing private manufacturing companies have an estimated revenue of between $1 and $10 million, with a single company generating between $26 and $50 million.
American Industrial Plant Services, Inc. (AIPSI)
AIPSI is a petrochemical, refinery, and process industry that manufactures fabricated plate work products, such as piping boilers. The company specializes in fabricated metal and hardware and manufactured goods for many industries, including logistics and construction, among others.
A full-service shop, Centerline Brackets produces steel support solid surface countertop brackets that add hidden support for overhangs, center-levered bar tops, kitchen islands, shelves, and more. It manufactures supports to match any customer's specifications, offering uncompromising product quality and superior customer service.
DT Engineering (DTE) is an experienced, market-leading crane and lifting equipment specialist manufacturer and service company based in the UK. It offers technologies and systems, crane & lifting equipment specialists, electrical engineering, and mechanical engineering services to other companies across the country.
A manufacturing company specializing in the production and supply of top-quality plating barrels, danglers, and plating barrel units, Eagle Engineering is a UK-based company that ships its products worldwide. Its innovative designs and use of high-quality materials result in longer-lasting, electroplated barrels with the highest quality performance.
E-Tech manufactures and markets heat recovery units to help businesses save money on energy costs. The company offers plain and enhanced ERW boiler tubes, finned and studded tubes, and custom-engineered heat recovery units, including boiler feed-water economizers, tubular air preheaters, waste heat recovery units, and other heat exchangers.
Heritage Industrial Contracting
Heritage Industrial Contracting offers a number of services within industrial automation and contracting. From manufacturing and remanufacturing to installation, maintenance & repair/retrofitting of existing equipment, the company helps its customers across a wide range of industries manage projects of all sizes.
By using the latest automation and technology, Horizon manufactures, installs, and sources industrial automation components for other companies within the industry. With a network of suppliers, as well as in-house custom fabrication, Horizon can help with many types of projects, including control panels, power distribution panels, wire harnesses, enclosures, and more.
For over 50 years, Jetronics has manufactured custom-engineered assemblies for original equipment manufacturers (OEMs). The company manufactures cables, electronic coils, cable harness & magnetic assemblies, subassemblies, and transformers.
RAM Manufacturing specializes in the engineering, innovation, and manufacturing of a number of products for the agricultural industry. It produces pneumatic equipment and fans, including module feeders, vertical combo dryers, cotton seed load-out systems, and round module machinery. The company also provides custom metal fabrication and laser cutting and punching, as well as cotton gin, harvest, and industrial brushes.
Specializing in metal work, wiring work, and electro-mechanical assembly, TEK Services offers manufacturing, fulfillment, workforce, and warehousing solutions to customers across the United States. Its services include wire harness development and assembly, stamping and joining of non-metal materials, materials storage and fulfillment, and outsourced returns and repairs.
Within the next few years, the manufacturing industry is poised to advance in unprecedented ways thanks to new technology such as AI. And as part of one of the most important industries to the modern economy, the top manufacturing companies are rife with opportunity for private equity firms looking to add to their portfolio.
Sourcescrub can help you uncover those opportunities. With countless sources and millions of available data points — like estimated revenue — on private companies, our deal sourcing platform will help you source more opportunities and close more deals. Download the list of the top 50 fastest-growing private manufacturing companies here.
