Q3 2019 Food & Beverage M&A Update

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GCG’s Q3 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 middle-market M&A environment.

Key findings include the following:

    • Q3 2019 saw modest gains in the Food & Beverage (“F&B”) industry and the broader U.S. equity market as investors remained cautious of a global growth slowdown. The F&B industry as a whole exhibited moderate performance on a 12-month basis, with certain segments performing stronger than others. The industry was led by the Restaurant and Distribution segments, both of which outperformed the S&P 500 over the 3-year period ending September 2019 with stock gains of 84.8% and 67.6%, respectively.
    • In Q3 2019, the F&B sector saw higher transaction values and a lower number of transactions compared to recent quarters. However, the overall number of transactions remained strong with 329 transactions in Q3. Strategic buyers continue to dominate overall deal activity in Q3, with financial buyers representing 17% of all M&A activity in the industry.
    • The Packaged Foods and Meats category led activity, accounting for 38% of total F&B transaction volume. Restaurant companies proved to be attractive targets as well with over 33% of transaction volume.
    • Based on a representative set of publicly traded companies across the F&B industry, public companies in F&B traded at an average multiple of 15.4x EBITDA and 2.8x revenue. Among the six sectors disclosed in this report, the strongest trading multiples were observed in the Beverage, Ingredients and Restaurant sectors.

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