GCG’s Q2 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:
- Q2 2022 saw a varied performance in the Food & Beverage (“F&B”) industry while the broader U.S. equity market saw meaningful losses as a result of Federal Reserve interest rate increases and continued inflationary pressures. The Branded Packaged Goods segment was the strongest performer in Q2 2022 as the group recorded an average increase of 1.5% in share price over the quarter.
- In Q2 2022, the F&B sector saw a moderate decrease in transaction volume and a substantial reduction in average deal value from the previous quarter. Strategic buyers continue to represent the largest portion of acquirers, accounting for 86.0% of transaction volume. However, private equity funds continue to seek investments in the space, with a substantial amount of capital available for investment.
- The Packaged Foods and Meats category led activity, accounting for 35.2% of total F&B transaction volume. The Restaurant sector proved to be an active segment as well, comprising 27.5% of transaction volume.
- Based on a representative set of publicly traded companies across the F&B industry, companies traded at an average multiple of 14.0x EBITDA and 2.5x Revenue. The Beverages and Restaurant segments continue to lead all categories, trading at a median multiple of 18.2x EBITDA and 15.4x EBITDA, respectively.
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