Products Finishing

NOV 2013

Products Finishing magazine is the No. 1 industrial finishing publication in the world. We keep our readers informed about the latest news and trends in plating, painting, powder coating, anodizing, electrocoating, parts cleaning, and pretreatment.

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Page 23 of 59

AEROSPACE It is expected that Boeing and Airbus will increase production to more than 1,700 planes a year, an increase of 40 percent. Backlog as of Dec. 31, 2012 4, 373 units 4, 682 units Source: Boeing Annual Report; Airbus Annual Report 22 NOVEMBER 2013 — Strategic Shifts With these ownership changes, many shops have undergone strategic shifts in supplier management that have transitioned away from a relationship-based approach to a more calculated analysis based on a set of objective rationale. While this approach has left smaller, less sophisticated surface finishers at a crossroads, it has benefitted those that have invested in new equipment, enterprise resource planning and quality systems. This rampant consolidation is poised to continue as a supportive lending environment has driven valuations to levels not seen since 2007. All of these dynamics have combined to create an interesting environment for mergers and acquisitions in the metal finishing industry. In general, the M&A market has nearly fully recovered from the 2008-2009 period, as both the number of—and valuations for—transactions have improved markedly. For the metal processing industry specifically, activity over the past year has increased, as large, publically traded machine shops such as Precision Castparts and Triumph Group have sought to vertically integrate by acquiring some of the larger family-owned metal processors and finishers, including Southwest United, Embee and Procoat. While the rationale for these acquisitions varies, a uniting theme is the emergence of surface finishing as a key strategic component of the aerospace and defense supply chain. As large companies face pressure from customers on turnaround

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