The European industrial parts production market comprises players that design, develop and produce components of industrial systems. These businesses deliver components or subsystems as input for players that subsequently produce the finished end-product. Most of the identified players operate across sectors, although some specialise in one end market. Accordingly, we segmented the market by the end-customer focus into (i) generalist, (ii) aerospace and (iii) automotive. 

The European competitive landscape varies by vertical. For example, the aerospace components industry is significantly fragmented. One reason for this dynamic is that aerospace manufacturers have always relied on broad supply chain networks with multiple suppliers per product group. On the other hand, some segments of the automotive vertical are highly concentrated, with the concentration being stronger the more specific the niche is. 

Sponsor-led interest has been moderate, with ~50% of identified assets being backed by financial sponsors (June 2023). We see (i) strong profitability, (ii) long-term order contracts and (iii) technological know-how as the key factors attracting private equity investors.

ESG issues primarily relate to environmental topics. Herein, industrial parts production has a notable impact on the environment as it consumes significant amounts of energy and raw materials. To lower their carbon footprint, the players invest in renewable energy sources, increased automation, new manufacturing methods with reduced material losses and alternative (non-finite) and recyclable raw materials.