GCG’s Q2 2021 Food & Beverage Industry 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:
- Q2 2021 saw additional gains in the Food & Beverage (“F&B”) industry and the broader U.S. equity market as equities further advanced Q1’s recovery from the COVID-19 pandemic. The Restaurants segment was the strongest performing in Q2 2021 as the future outlook for the sector improved due to the loosening of pandemic-related restrictions. For the 3-year period ending June 30, 2021, the S&P 500 index was up by 57.6%, extending its run from Q1. The F&B industry underperformed the broader market with the exception of the Restaurants segment.
- In Q2 2021, the F&B sector saw a greater number of transactions and a higher average deal value than in Q1 2021. There were 466 transactions in Q2 with an average deal value of $60.1 million. Strategic buyers continue to dominate overall deal activity, while financial buyers have grown their presence due to favorable industry trends and historical levels of dry powder. In Q2, financial buyers represented 18% of all M&A activity in the industry.
- The Packaged Foods and Meats category led activity, accounting for 34.5% of total F&B transaction volume. Restaurant companies proved to be attractive targets as well, comprising nearly 27% 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 15.7x EBITDA and 3.1x revenue. Among the sectors disclosed on the previous page, the strongest trading multiples were observed in the Beverage and Restaurant sectors. The overall industry experienced a decrease in EBITDA multiples of 1.9% and a decrease in revenue multiples of 3.1%.
Click here for the full update.