Investors Train Sights on Air Filtration Businesses
Oct 2021
Emerging from the COVID-19 pandemic, people have a heightened level of focus on their health and wellness, specifically the air they breathe. While they were once concerned with air quality, primarily temperature and humidity, air cleanliness has now become a top priority. As a result, air filtration technology in commercial, industrial and residential settings is no longer a nice-to-have amenity, but rather a necessity to maintain a healthy lifestyle.
The fundamental shift in the way people think about air quality will create opportunities for the global air filtration market for years to come. As businesses and consumers navigate the “new normal” post-pandemic, the air filtration market is expected to experience double digit growth to $22+ billion by 2028.
Summary
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Lincoln International identified several key considerations for investors looking to enter the air filtration market.
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When tasked with navigating the best practices for air filtration, the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) recommended a MERV-13 or higher filter to capture the most particles. For commercial spaces, customers and employees hold heightened expectations in order to feel safe enough to return to offices, schools and other locations. Consumer demand, regulatory requirements, such as MERV-13, and other local incentives have pushed many commercial properties to invest in air filtration to comply with new safety standards and keep people safe.
Healthcare settings are facing heightened pressure to increase the efficiency of their air filtration systems. As they seek to recoup market share lost to telehealth providers during the pandemic, they are taking all necessary steps to maintain a safe and healthy environment, especially for the most at-risk patients.
At the same time, the residential market is seeing rapid expansion. The influx of new air filtration customers, driven by the pandemic, is expected to sustain, resulting in a sizeable jump in the customer base that will generate continued growth through referrals. Home builders are also seeing an increased demand to incorporate air filtration systems into their properties.
| Lincoln Perspective
Though there is no single best way to clean air, filtration businesses with different models and offerings across the sector are attracting investor attention. As the public increasingly monitors its health and wellness, private equity investors and strategic buyers see opportunity to capitalize on the market upside and capture new technology to better serve customers. While the pandemic may have heightened the focus on health and safety, the rise of the filtration market is more than a blip—it is a mainstay with long-lasting relevance. For investors looking to enter the air filtration market, several market dynamics make these businesses attractive:
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Contributors
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Aude Doyen
Managing Director & Co-head of Capital Advisory, Europe
London
