News & Resources
The material handling industry has been an active focus of investors in the past decade. Organizations are routinely looking for ways to optimize the supply chain by decreasing costs and improving efficiency. While the industry has faced a slowdown in both supply chain investment and M&A activity, we are optimistic about the opportunity for a rebound and a strong 2025 in both key areas. The biggest indicators and trends contributing to an optimistic view of 2025 are robotics and automation, artificial intelligence, and increased manufacturing activity in the U.S.
As our economy grows and advances, consumers and businesses alike continue to exhibit a common desire for faster delivery. Material Handling organizations across the United States have played a key role in advancing lead times and delivering significant supply chain improvements through realizing various efficiencies. In 2025, organizations are seeking to drive efficiencies through the use of robotics and automation. More and more warehouses in the United States are turning to the use of this technology to counter rising labor costs due to talent shortages, update legacy systems, and drive operational improvements and increased profitability. The global robotic process automation market is approximately a $4B industry and is expected to grow at a CAGR of 44% from 2025 to 2030, according to Grand View Research. The use of robotics and automation has the ability to significantly change the competitive landscape within the material handling industry and will require investment in capital expenditures in order to keep pace with competition. Organizations with a strong balance sheet will be poised to take advantage of this new technology and realize significant operating leverage from implementation and adoption.
Artificial Intelligence is a hot topic and area of focus for every industry. Companies in the material handling space are beginning to adopt AI rapidly. According to a survey from the MHI industry report, 28% of organizations in the material handling space report that AI is already in use. An additional 54% report they plan to have it in place within 5 years. One of the useful applications of AI within the material handling space includes computer vision. Computer vision with AI allows for the interpretation of visual data. This can help with visual inspection of goods, quality control, and other inventory management protocols. Additionally, computer vision is being utilized by robotics to identify and sort different items based on appearance, size, shape, etc. This is just one of many applications for AI within the space, and as the technology continues to improve, many more applications will be uncovered and utilized.
Tariffs will play a large role in the material handling industry, but U.S. based companies may realize some benefit from the increased taxation on foreign goods. Many organizations are fighting to understand the full impact of the decisions being made by the current administration. One thing remains true; this administration is committed to U.S. based business and commerce. A trend of onshoring should lead to increased demand for material handling services including new warehouse development, warehouse improvements, systems integration and build out of automation. Organizations within the industry should be ready to go after new business in this space and help customers identify areas to improve supply chain and reduce costs that can be controlled amidst tariffs and any economic uncertainty created by tariffs.
With these many growth factors and historically active investors remaining on the sidelines for most of 2023 and 2024, we expect to see continued growth and investment within the Material Handling industry going forward. Active investors who have chose to slow or stop acquisitions all together have been stockpiling cash and will look for ways to deploy that cash via investment or acquisition. For material handling M&A within the United States, 2025 was off to a strong start with regards to deal volume. Approximately 34 deals were completed in Q1 of 2025. That is up from ~30 in Q4 2024. Some notable deals announced in Q1 2025 include Vermont Information Processing to be acquired by Warburg Pincus for $1B, Kito Crosby to be acquired by Columbus McKinnon (NAS: CMO) for $2.7B, and Walmart Advanced Systems & Robotics acquired by Symbiotic (NAS: SYM) for $520M. Larger deals being announced and completed are usually positive signs for an industry and its outlook. The industry is poised for rapid growth and should be one of the top beneficiaries of AI improvement and other technological innovations. We continue to remain active in the space and on top of trends and M&A activity. Alexander Hutton is optimistic regarding the future of United States based material handling focused organizations.
About Alexander Hutton
Led by a team of former business operators and executives who have built and sold companies, Alexander Hutton is a boutique, middle market M&A advisory firm that has completed 229 successful transactions. We offer a unique understanding of what it takes to run a business and an accessible team dedicated to client service. By running a high-touch, competitive transaction process for each of our clients, we are able to help them achieve their ideal outcome.
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