Food and beverage transaction multiples in 2018 hovered above prior years’ valuations, with an average EV/EBITDA multiple of 13.8x. Although 2019 deal valuations have not yet reached this same record-breaking height, industry multiples remain strong, with Q1’s average EV/EBITDA multiple at just 12.0x. The transaction data used in this analysis includes branded consumer products, which typically generate higher multiples than manufacturers and packaging companies.
Although valuations in the food and beverage industry hit decade-high levels last year, total transaction volume fell short of prior years, with less than 1,000 food and beverage M&A transactions globally. As noted above, M&A activity is off to a more moderate start through the Q1 2019, with 207 reported transactions.
The deceleration in Q1 2019 can be attributed to general economic concerns regarding slowing growth, potential trade and tariff implications, and increased doubt of mega-mergers in the food industry (as seen in the high number of corporate divestitures in 2019, as well as those anticipated in 2019).
To review the full report please download, “Food and Beverage Summer 2019”