Over the past six months, we have seen a sharp increase in interest from European industrial groups seeking to acquire U.S. manufacturing businesses, particularly in the $2M to $20M revenue range. This trend is driven in large part by the current trade environment: with the recent escalation of the “global trade tensions”, increased tariffs and import duties have made it more costly and strategically risky to produce in Europe and export to the U.S. market. As a result, owning manufacturing capacity inside the United States has become a competitive advantage, not only to protect margins, but to secure market access and strengthen long-term customer relationships. 

At the same time, many U.S. industrial businesses in this size segment possess solid customer relationships and legacy know-how, but their technology, machinery, and operating processes often reflect an aging industrial base.

This is precisely where European acquirers can bring value: modernized production methods, advanced automation, digital controls, ERP discipline, quality processes, lean / continuous improvement culture, and the technical expertise gained in Europe over the last 10–15 years.
In other words, the French buyer is not just acquiring a business, they are acquiring a platform they know how to transform. 

Why these U.S. companies are attractive

Several market conditions create favorable acquisition opportunities: 

1. Succession and Management Transition
   Many U.S. manufacturing businesses are led by founders approaching retirement, without a clear succession plan. Transition risk reduces valuation multiples and creates a window for well-structured foreign buyers. 

1. Aging Technology and Operations (under-investment)
   The production tools, ERP systems, and industrial processes often reflect a company that was successful 15–20 years ago but under-invested in modernization.
   For European industrial groups, this is familiar terrain, these targets often resemble how the acquirer operated a decade ago, before implementing improvements. The European buyer effectively brings a playbook. The opportunity is not to acquire advanced technology, but rather a platform that can be modernized, using the acquirer’s existing industrial expertise. 

1. Currency Advantage
   A stronger Euro relative to the Dollar (even on fluctuations) allows European groups to invest at a relative discount, improving ROI on acquisition and post-acquisition costs that the buyer (here, the European group) incurs to bring the U.S. company up to its standards and align it operationally, financially, and culturally with the group. 

1. Supportive Financing Environment
   Let’s take France as an example, where French banks, and particularly BPI France, are increasingly supportive of cross-border expansion strategies. Financing the acquisition through a mix of French credit and U.S. asset-based lending creates favorable leverage. 

1. Existing Commercial Relationships
   In many cases, the U.S. target is already a supplier, distributor, technology partner, or long-time customer. This creates trust, a critical intangible advantage compared to private equity or local competitors. 

1. Tariff Pressure & Reshoring Strategy
   Rising tariffs and supply chain uncertainty make local U.S. production strategically valuable. Acquiring a U.S. facility: 

• Reduces dependence on imports and shipping lead times 

• Protects pricing power and margins against tariff fluctuations 

• Positions the group as a local, reliable supplier in the U.S. market 

But There Are Real Risks

These acquisitions are meaningful relative to the size and liquidity of the French parent company. A poorly executed purchase can jeopardize financial stability. 

The two primary risk areas: 

1. Post-Acquisition Integration
   Success depends on people, not spreadsheets. Retention of key managers, culture alignment, clarity of roles must be planned early (ideally before closing) and communication needs to be transparent and respectful. 

1. Strategic Positioning
   The approach differs depending on whether the U.S. target views the European acquirer as: 

• If the U.S. company sees the European acquirer as complementary, collaboration is natural. 

• If they see them as a competitor, the negotiation dynamic is more sensitive and requires a carefully managed information exchange and messaging strategy (an LOI is usually the starting point!) 

1. Where IMS Adds Value

IMS acts as a neutral, bilingual, bi-cultural advisor, supporting both the analysis phase and the post-acquisition operational transition: 

Our role is to protect the European buyer, ensure a smooth relationship with the U.S. seller, and secure the continuity of operations in the first 12–24 months. 

1. Positioning Statement

European industrial groups today are uniquely positioned to revitalize, modernize, and scale aging U.S. industrial businesses. The combination of tariff-driven localization needs, succession-driven availability of targets, and European operational know-how creates a rare window of strategic opportunity. 

But the difference between a successful U.S. acquisition and a costly misstep lies in the integration, especially on the human side.

IMS ensures that the acquisition creates value not only on Day 1, but in the first 12 to 24 months where success is determined.