Houlihan Lokey's European Expansion: A Catalyst for Industrial M&A Consolidation in 2025

The industrial sector is undergoing a transformative phase in Europe, marked by a surge in strategic consolidation and heightened private equity interest. At the forefront of this shift is Houlihan Lokey, whose recent expansion into key European markets-bolstered by high-profile hires-signals a growing appetite for complex industrial M&A transactions. This analysis explores how the firm's strategic moves align with broader industry trends and what they reveal about investor positioning in the industrial value chain.

Strategic Hires and Enhanced Capabilities

Houlihan Lokey's 2025 expansion in Europe has been anchored by the recruitment of seasoned professionals like Géraud Estrangin, a Managing Director in the firm's Industrials Group based in Paris. Estrangin's expertise in aerospace and defense transactions, coupled with his 25-year track record in European investment banking, positions Houlihan Lokey to capitalize on a sector where cross-border deals are increasingly prevalent. Similarly, the appointment of Neil Price to lead the Financial Sponsors Group in London underscores the firm's commitment to serving private equity firms and institutional investors seeking to navigate the industrial M&A landscape.

These hires reflect a broader strategy to deepen the firm's transaction execution capabilities in Europe, where industrial M&A activity is projected to grow by approximately 25% in 2025. This growth is driven by a confluence of factors, including the need for operational efficiency, technological modernization, and the pursuit of scale in fragmented markets.

Industrial M&A Trends and Investor Positioning

The anticipated 25% increase in industrial M&A activity is not merely a function of market size but also a response to evolving investor priorities. Private equity firms, in particular, are shifting toward high-quality assets with defensible cash flows and strategic synergies. As noted by Bill Peluchiwski, Global Head of Industrials at Houlihan Lokey, this trend is characterized by a "focus on long-term value creation" rather than short-term gains.

This shift is evident in the aerospace and defense sub-sector, where Estrangin's expertise is expected to play a pivotal role. The sector's resilience amid macroeconomic volatility-coupled with geopolitical drivers such as increased defense spending-has made it a focal point for consolidators. According to industry bankers, European industrials M&A is likely to see a surge in cross-border deals, with private equity firms leveraging low-interest-rate environments to fund acquisitions.

Moreover, the second half of 2025 is anticipated to witness a concentration of deal activity, as investors time transactions to align with favorable market conditions and regulatory clarity. Houlihan Lokey's expansion into this space, particularly through its data-driven advisory services, positions the firm to act as a critical intermediary in structuring these deals.

Implications for the Industrial Value Chain

The industrial value chain is becoming increasingly polarized, with firms either consolidating to achieve scale or pivoting toward niche, high-margin segments. Houlihan Lokey's strategic hires-such as Estrangin's focus on aerospace and defense-highlight the firm's alignment with sub-sectors poised for growth. For instance, the defense industry's demand for advanced manufacturing and supply chain resilience has created opportunities for strategic buyers seeking to integrate vertically or horizontally.

Investor positioning is also evolving. With European PE buyouts seeing a 65% increase in deal value in 2024, compared to 2023, capital is flowing toward industrial assets that offer both operational flexibility and ESG-aligned value propositions. Houlihan Lokey's emphasis on "strategic alignment" in its advisory approach suggests that the firm is well-positioned to guide investors through these complexities, particularly in markets where regulatory scrutiny and sustainability metrics are becoming non-negotiable.

Conclusion

Houlihan Lokey's European expansion is more than a geographic diversification play-it is a calculated response to the industrial sector's structural transformation. By recruiting top-tier talent like Estrangin and Price, the firm is not only enhancing its transaction execution capabilities but also signaling confidence in the sector's consolidation trajectory. For investors, this underscores the importance of aligning with advisors who possess deep sector expertise and a nuanced understanding of European market dynamics. As 2025 unfolds, the industrial M&A landscape is likely to reward those who prioritize strategic fit, operational resilience, and long-term value creation-qualities that Houlihan Lokey's expansion explicitly aims to deliver.