Industry Insights: Material Handling Q1 2025

Material Handling Industry Enters 2025 with Tailwinds in Automation, M&A and Valuation

The material handling and process equipment industry is positioned for significant growth in 2025, driven by technological innovation, e-commerce expansion, and heightened demand for automated solutions. Companies manufacturing conveyors, feeders, grinders, screeners, and thermal processing equipment are benefiting from stabilized commodity pricing, resilient order volumes, and margin expansion from value-added product solutions.

Despite economic uncertainty in 2024, investment in capital equipment remained stable, and price indices across the segment indicate normalization. Notably, leaders are leveraging value-based pricing and differentiation in automation, integration, and service offerings to maintain profitability. End markets such as food and beverage, mining, recycling, and logistics hubs are fueling sustained demand.

Valuation Momentum and M&A Activity Accelerate in 2025

M&A activity in the material handling sector showed signs of resurgence through late 2024 and into early 2025, with middle-market transactions rebounding due to easing interest rates, robust private equity dry powder, and strategic consolidation efforts. Companies offering automation and cross-functional equipment integrations are commanding premium multiples, especially those with end-to-end systems and OEM partnerships.

Median EV/EBITDA valuations for material handling transactions in early 2025 reached 7.7x, with some deals surpassing 8.0x. Strategic buyers and financial sponsors are drawn to the sector’s resilient cash flows, mission-critical products, and exposure to reshoring and nearshoring trends.

As demand for supply chain efficiency and industrial automation continues, segment leaders with proven innovation, customer loyalty, and operational scale are poised to capitalize on the current M&A cycle.

Explore the full Segment One Q1 2025 Report by downloading the report below.