In this M&D M&A Industry Update, we explore the M&A activity and projections for the Essential Services Area of Expertise within the M&D industry. Our Manufacturing & Distribution Practice experts share their insights on the current state of the Essential Services M&A market and look at the factors influencing the broader M&D industry.
Select Insights:
-
- While down from the 2021 spike, U.S. M&A deal volume in the Essential Services (“ES”) vertical appears to have settled in the pre-Covid range. The broader M&A market (all industries included) continues to lag the ES vertical in terms of relative deal activity. ES vertical closings have been skewing towards private equity as PE investors look for recession resistance in their targets.
- Valuations have stabilized as well, after expanding over the past year. The current average EBITDA multiple in the ES vertical is 7.3x (see Chart II).
- Publicly-traded ES companies have outperformed the broader market, with our Objective ES Equity Index noticeably breaking upward when compared to the Russell 2000 (see Chart III). ES companies can be an attractive area in which to invest.
- The US economy grew an annualized 2.8 percent in Q3 2024. The Conference Board expects the overall 2024 U.S. GDP to be up 2.6x by year-end and further predicts 1.7 percent real growth in 2025. These estimates are significantly higher than the Board’s earlier estimates, suggesting that the outlook is improving with time, particularly in the service sector.
To read the full Essential Services Industry Update, download below
If you are interested in discussing any of the analysis from this report, or if you would like to discuss your own transaction goals contact the Managing Directors from our M&D Industry Practice below, or reach out at (800) 849-7010 or [email protected] to be directed to the appropriate team member.
Dan Shea
Managing Director, M&D Practice Leader
(310) 903-2163
[email protected]
Disclosure
This news release is for informational purposes only and does not constitute an offer, invitation or recommendation to buy, sell, subscribe for or issue any securities. While the information provided herein is believed to be accurate and reliable, Objective Capital Partners and BA Securities, LLC make no representations or warranties, expressed or implied, as to the accuracy or completeness of such information. All information contained herein is preliminary, limited and subject to completion, correction or amendment. It should not be construed as investment, legal, or tax advice and may not be reproduced or distributed to any person. Securities and investment banking services are offered through BA Securities, LLC Member FINRA, SIPC. Principals of Objective Capital are Registered Representatives of BA Securities. Objective Capital Partners and BA Securities are separate and unaffiliated entities.
