Reshoring Is a deal thesis, not a policy talking point

Quick answer: Cross-border industrial deal value has reached an estimated 56% of the trailing twelve month total, up from 30% in FY22, and US-targeted deal value nearly doubled in FY25 to $72 billion, reported by PwC . Reshoring has moved from a boardroom slide about supply chain risk to a line item that is repricing industrial assets. Dealmakers who are not underwriting it directly into valuation are underwriting the wrong number.

From risk mitigation to valuation premium

For years, reshoring sat in the risk section of a board deck: a hedge against tariff shocks and a single point of supply chain failure. That framing is out of date. It is now a demand driver in its own right, and it shows up in the multiple a buyer is willing to pay for a domestic manufacturing footprint.

Caterpillar is a useful example of capital following the thesis rather than just talking about it. The company announced a $725 million investment in its engine manufacturing facility in Lafayette, Indiana, aimed at expanding capacity for power generation engines used in data centers, alongside workforce upskilling. That is not a defensive move. It is a bet that US-based manufacturing capacity for a specific, high demand product category is worth building now, ahead of the demand curve, rather than waiting for it to arrive.

What is actually driving the premium

Three forces are compounding: tariff exposure, supply chain reconfiguration following years of global disruption, and a genuine geopolitical premium on domestic capacity in categories governments consider strategic, particularly semiconductors, batteries, and defense adjacent manufacturing. PwC's industrial products team notes that US targeted cross-border deal value nearly doubled in FY25 to $72 billion, and estimates average deal size in the sector has risen from $155 million in FY24 to $288 million in FY25 to $375 million in the most recent annual period, a 139% increase in two years, reported by PwC.

That is not noise. That is buyers paying materially more for the same category of asset than they were paying twenty four months ago, because the asset now carries a strategic scarcity premium on top of its operating cash flow.

The diligence question this creates

Reshoring valuations only hold up if the underlying facility, supply agreements, and workforce commitments are exactly what the data room says they are. A buyer paying a premium for domestic capacity is underwriting policy stability, tariff exposure, and supplier concentration all at once, and every one of those threads needs to be evidenced with the same rigor as the financials.

This is where reshoring deals differ from a standard industrial acquisition. The diligence burden shifts toward government contracts, local content requirements, workforce agreements, and site level capital commitments, categories that used to sit in an appendix and now sit at the center of the valuation case. Sellers who can produce that evidence cleanly, organized and ready before a buyer asks, are the ones capturing the premium multiples PwC is now tracking. Sellers who cannot are the ones watching a 375 million dollar average deal size shrink back toward the mean during diligence.

Domestic capacity, closer to home

Bhagwan Marine's acquisition of Riverside Marine, one of Western Australia's largest offshore marine services providers, is a domestic capacity story on a $130 million scale, consolidating local operating capability rather than importing it. Virgin Australia's A$685 million re-listing on the ASX, backed by Bain Capital, Qatar Airways, Virgin Group and QIC and underwritten by UBS, Goldman Sachs and Barrenjoey, Australia's largest new share sale since 2021, is a reminder that reshoring and re-onshoring capital is not only a US or manufacturing story. It runs through national carriers and domestic infrastructure just as directly.

The takeaway

Reshoring stopped being a talking point the moment average industrial deal size, estimated at a 139% increase in two years, reported by PwC , rose on the back of it. If your business has a domestic manufacturing footprint in a strategically relevant category, that footprint is now part of your deal thesis, not a footnote to it, and your data room needs to prove it as rigorously as your P&L.

See more articles in the Industrials M&A Series 1.The Great Unbundling: Why Carve-Outs Are Now the Default Industrials Deal