GCG’s Q4 2024 Automotive Aftermarket 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:

• Industry Trends: The automotive aftermarket remains dynamic, with recovery signals in discretionary segments like enthusiast parts and off-road accessories. Mobile automotive services continue to grow, leveraging new business models and technology. Online transactions and low-cost, non-branded products are reshaping consumer purchasing behaviors.
• Market Performance: Tech-enabled platforms remain a bright spot, closely tracking NASDAQ with a 29% gain over three years, underscoring the sector’s increasing reliance on technology. Discretionary segments underperformed but showed signs of stabilization, while non-discretionary parts and collision repair faced cost pressures and supply chain challenges.
• M&A and Private Placements: Q4 2024 saw a significant resurgence in M&A activity with 28 transactions—the highest in eight quarters. Activity was driven by bolt-on acquisitions in collision repair, service providers, and technology platforms. Enthusiast-focused companies also saw renewed interest, reflecting potential pent-up demand.
• Valuation Trends: Valuation multiples continued to normalize, with an average EV/EBITDA of 13.9x across aftermarket companies. Tech-enabled platforms maintained strong performance (21.6x EV/EBITDA over five years), while traditional segments like components suppliers and collision repair showed more modest valuation metrics (9.6x and 12.5x, respectively).

Click here for the full update.

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