{"id":829604,"date":"2025-03-25T13:03:26","date_gmt":"2025-03-25T17:03:26","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/capstone-partners-reports-consumer-ma-market-rebound-realized-in-2024-poised-to-accelerate-in-2025\/"},"modified":"2025-03-25T13:03:26","modified_gmt":"2025-03-25T17:03:26","slug":"capstone-partners-reports-consumer-ma-market-rebound-realized-in-2024-poised-to-accelerate-in-2025","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/capstone-partners-reports-consumer-ma-market-rebound-realized-in-2024-poised-to-accelerate-in-2025\/","title":{"rendered":"Capstone Partners Reports: Consumer M&A Market Rebound Realized in 2024, Poised to Accelerate in 2025"},"content":{"rendered":"
\n

PR Newswire<\/p>\n<\/p><\/div>\n

\n

\n
\n BOSTON<\/span>
\n <\/span>, March 25, 2025<\/span><\/span> \/PRNewswire\/ — Capstone Partners, a leading middle market investment banking firm, released its Annual Consumer M&A Report<\/b>,\u00a0which shares insights into public market valuations, the macroeconomic climate, merger and acquisition (M&A) activity, and an outlook for 2025 industry activity. With extensive knowledge and transaction experience<\/a>, Capstone Partners’ Consumer Investment Banking Team<\/a> provides unique\u00a0commentary on 14 key sectors: Apparel, Footwear, & Accessories; Automotive Aftermarket; Beauty; Beverage; Convenience Store & Fuel Distribution; E-Commerce; Food; Home Goods; Outdoor Recreation & Enthusiasts; Pest Control; Pet; Sports Technology; Tactical Products; and Vitamins & Supplements.<\/p>\n

Capstone believes several improvements in the Consumer industry M&A markets\u00a0in 2024 indicate the market is primed for a significant increase in activity and valuations in 2025. In 2024, Consumer M&A volume rebounded year-over-year (YOY) and saw a slight increase in overall M&A valuations. Getting behind the numbers, we see the majority of consumer M&A transactions were driven by corporations making strategic acquisitions. In 2024, approximately 70% of all consumer M&A was conducted by corporations compared to ~30% from private equity funds. This is a positive sign as it shows corporate America, at least in the Consumer world, views M&A as a good return on investment (ROI) strategy.<\/p>\n

Interestingly, public consumer stocks have performed inconsistently. Only a few sectors including Tactical, Home Goods, E-Commerce, and Sports Technology have beaten the S&P 500 return of 24% in 2024. These sectors are not typical harbingers of a great market in Consumer. Key indicators are certainly doing well, with moderating inflation and healthy GDP (Gross Domestic Product) growth throughout 2024. Of note, the Institute for Supply Management (ISM) Manufacturing Index rose to 50.9 in January 2025<\/span>, beating market estimates and recording the first U.S. Manufacturing sector expansion in 26 months, according to an ISM report.1<\/sup> New orders reached the highest level since 2022 and increased by 3% compared to December, signaling accelerating customer demand. Sentiment among middle market business owners in the Consumer space appears to reflect these positive market signals. Nearly two-thirds of middle market CEOs have a positive outlook for the Consumer industry in 2025, compared to 60% in the prior year, according\u00a0Capstone’s 2024 Middle Market Business Owners Survey<\/a>.<\/p>\n

We are keeping a close eye on the start of a rotation from Consumer Staples to the Consumer Discretionary space in the public markets. The historically slower growing, more defensive S&P 500 Consumer Staples index outperformed its counterpart, the S&P 500 Consumer Discretionary index, 81.8% of the days in the three years since the M&A market entered its downturn in 2022. More recently, discretionary companies outperformed staples in the past 70 days, ending February 6<\/span>. The historical precedent suggests discretionary players realize outsized value appreciation in strong markets, characterized by resurgent discretionary spending and rising consumer confidence. When looking at the relationship between the two Consumer industry constituents and consumer confidence over the past 26 years, the average discretionary index value growth has been roughly three points higher than the average staples index value growth when consumer confidence increases. A stronger underlying growth profile and rebounding consumer confidence may provide some long-awaited tailwinds in the discretionary side of the industry and add proverbial fuel to the fire for Consumer industry M&A in 2025. A key question remains: how will inflation impact this swing?<\/p>\n

“We believe the spark that will ignite a rally in 2025 is the combination of 1) private equity deploying more than $1 trillion<\/span> of dry powder that has been sitting on the sidelines and 2) public consumer companies actively pursuing prized brands in their sectors ahead of a booming economy,” said Capstone’s Head of Consumer Investment Banking Ken Wasik, the lead contributor in the report.<\/p>\n

Also included in this report:<\/p>\n