The Food & Beverage industry is witnessing a resurgence in optimism, fueled by improved financial performance, easing inflation, and technological advancements. The outlook for 2024 midway through the year remains positive as U.S. M&A deal volume in the first quarter outperformed the previous two quarters, with both strategic and financial buyers eager to deploy capital.
While the beginning of 2024 was buffeted by economic uncertainty, valuations within the Food & Beverage industry remained strong, with the median EV/EBITDA multiple increasing to 13.5x.
What We’re Discussing with Clients
- Buyers are evaluating companies thoroughly and diligence streams are lengthening as acquirers increase their level of scrutiny. Minor diligence issues are getting magnified and in turn increasing the need for sellers to utilize strong transaction advisors who can properly mitigate risks to buyers.
- Private Equity investors are seeking comfort and flocking to companies with high revenue visibility, stable and consistent cash flows, and reliable end-markets. A/A+ companies are receiving over-subscribed interest in sale processes, and noticeable valuation drop-offs are disproportionately greater for sub-A companies.
- A shift in consumer preferences is driving demand for healthier food options. In response, many companies are diversifying their offerings to include product lines focused on health-conscious options. This trend is sparking significant M&A activity in the F&B market, with both strategic and financial buyers placing valuation premiums on companies that capture a share of healthier food markets.
Read Food & Beverage M&A Pulse Q1 2024 Full Report
