GCG’s Q1 2019 Food & Beverage M&A Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples and the state of the overall middle-market M&A environment.

Key findings include the following:

• • Q1 2019 saw strong gains in the Food & Beverage (“F&B”) industry and the broader U.S. equity market as the market sentiment reversed course from a negative and volatile Q4 2018.  However, for the 3-year period ending March 31, 2019, the S&P 500 and DJI indices were up 36.7% and 45.7%, respectively. The F&B industry as a whole exhibited moderate performance on a 12-month basis, led by the Restaurant and Distributors segments, both of which outperformed the S&P 500 over the 3-year period with stock gains of 54.1% and 45.7%, respectively.

• • In Q1 2019, the F&B sector saw smaller transaction values and a lower number of transactions compared to Q4 2018. However, the overall number of transactions remained strong with 358 transactions. Strategic buyers continue to dominate overall deal activity with financial buyers representing just under 17%. Leading the sector in activity, the Packaged Foods and Meats category accounted for roughly 34% of total F&B  transaction volume. Restaurants followed closely behind with 28% of deal flow.

• • Based on publicly traded companies in the F&B industry, the comparable public companies traded at an average multiple of 13.7x EBITDA.  Among the six sectors, the strongest trading multiples were observed in the Beverage and Restaurant sectors.

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