GCG’s Q1 2022 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:
- Q1 2022 saw varied performance in the Food & Beverage (“F&B”) industry while the broader U.S. equity market saw substantial decreases as a result of inflation and interest rate concerns. The Food Retailers segment was the strongest performing in Q1 2022 as the group recorded an average increase of 14.7% in share price over the quarter.
- In Q1 2022, the F&B sector saw a moderate decrease in transaction volume from Q4 2021. The F&B sector also saw a slight decrease in average deal value, falling to $67.0 million during the quarter. Strategic buyers continue to represent the largest portion of acquirers, accounting for 80.8% of transaction volume. However, private equity funds continue to seek investments in the space, searching for both new platforms and add-on investments.
- The Packaged Foods and Meats category led activity, accounting for 35.8% of total F&B transaction volume. The Restaurant sector proved to be an attractive target as well, comprising 28.8% of transaction volume.
- Based on a representative set of publicly traded companies across the F&B industry, companies traded at an average multiple of 14.7x EBITDA and 2.7x Revenue. The Beverages and Restaurant sectors continue to lead all categories, trading at a median multiple of 19.3x EBITDA and 16.3x EBITDA, respectively.
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