The sensor market shows key criteria for investors looking for high potential companies

  • Growth prospects supported by a continuous product-market diversification. While traditional measurement applications (flows, pressure, temperature, levels) keep further penetrating historic sectors (automotive, industry, energy, telecoms), innovative applications have emerged (speed, vibrations, biosensors) and shaped new sectors (connected health, smart cities, home automation…)
  • A fragmented market offering strong build up perspectives, especially as the playing field becomes increasingly global
  • The possibility to build strong barriers to entry thanks to evolving certifications, R&D investments and client proximity
  • Exit strategy options, in particular with national or international manufacturers looking for geographic expansion and new innovation capacities

The challenge consists in creating a virtuous cycle connecting growth, innovation and financing:

  • Growth: for traditional sensors, to continue to spread through new sectors in order to achieve volume gains
  • Innovation: to succeed in offering differentiating products addressing more complex needs
  • Financing: to be able to finance these innovations in a context of intense competition by generating economies of scale – and thus margin gains – in the historic sectors

To do so and before undertaking a transaction on this market, it is important to address some specific issues, which include:

  • Which strategy of sector and geographic diversification should be favoured to mitigate the cyclicality of the addressed markets?
  • How to preserve / increase the switching costs in a globalised context where highly performing Asian players are emerging?
  • More precisely, which are the levers to emphasise product differentiation? Is it to add to the existing functionalities new advantages (energy autonomy…), new types of non-measurement features or more integrated solutions to get closer to the end user?
  • Similarly, at which stage of the value chain and on which segments should we rely on to build this privileged relationship with clients and minimise the risks of pressure on margins?

AMR International has built an expertise on niche industrial products and more specifically on instrumentation and sensors. We support investment funds and large corporations in their investment and development strategies.