There is a lot of attention being paid to the robotics sector these days with supply chain problems and labor shortages. Last week, we told you about Walmart expanding its agreement with Symbotic. One PE firm that is active in this space is New York-based Crestview Partners. Crestview co-president and partner Alex Rose tells us what will drive M&A in robotics and automation.

“The vibrant M&A activity in automation is driven by substantial investor appetite to capitalize on long-term tailwinds such as the increasing affordability of robotics coupled with rising labor costs and the growing demand for resilience in supply chains,” Rose says. “M&A in automation is also catalyzed by its fragmentation as there are many small and medium-sized companies in the sector and ample opportunities to bring them together to create more scaled, comprehensive solutions for customers.”

Crestview recently formed Convergix Automation Solutions which will look for automation deals. The company acquired two automation companies in JMP Solutions and Classic Design. Crestview has allocated up to $200 million in equity for Convergix.

“Convergix is looking to acquire best-in-class automation companies that serve customers across manufacturing, production, and distribution operations,” Rose adds. “Target acquisitions have expertise in a range of engineering specialties including mechanical, controls, robotics, vision, programming, and simulation, and are experts in solving customers’ technical challenges creatively and effectively.”

Automation is helping businesses grapple with labor shortages and supply chain challenges. Businesses have been gradually adding automation to their operation processes to fulfill more orders quickly and accurately. And private equity firms are looking to jump at these opportunities because there are still plenty of them out there.

– Demitri Diakantonis