Consumer & Retail Q1 2025

Executive Summary

The Consumer & Retail sector saw a slight decline in M&A activity in Q1 2025, with 1,229 transactions closed (LTM) compared to 1,264 in Q1 2024. Valuation pressures persisted in Q1 2025 as Consumer & Retail buyers continued to navigate elevated interest rates and selective credit markets. Transaction volume declined modestly year-over-year, and median revenue multiples compressed to 1.2x from 1.4x in Q1 2024. Median EBITDA multiples fell to 8.6x, reflecting investor caution and a flight to quality. Strategic buyers lead the quarter accounting for 87% of all transactions reflecting the need towards capability-building and long-term growth strategies amid a cautious private equity environment.

Market Dynamics

Q1 2025 deal activity in the Consumer & Retail sector reflected a cautious market tone with transaction volume decreasing to 236 total transactions, as investors and strategic acquirers wait to see what long term policies the new administration will adopt. Median TEV/EBITDA multiples declined to 8.6x from 9.0x a year earlier, indicating a moderation in valuations that may present more attractive entry points for investors concerned about previous market highs. Revenue multiples also compressed to 1.2x from 1.4x. Investors shifted focus from high-growth stories to stable, cash-generative businesses. Strategic buyers remained active but disciplined, favoring acquisitions tied to essential services or evolving consumer preferences in a still-restrictive capital environment.

Buyer Landscape

Strategic Acquirers: Strategic buyers represented 87% of Q1 2025 transactions (927), continuing to drive consolidation across fragmented consumer categories. Activity was concentrated in lifestyle brands, automotive retail, and experience-driven assets with long-term customer engagement potential. Examples include Escalante Golf LLC’s acquisition of Canyata Golf Club.

Financial Buyers: Financial buyers accounted for 13% of deals (143), with interest focused on scalable concepts and premium service platforms. Private equity firms remained selective, favoring assets with strong unit economics, brand value, and expansion runway.

Industry Comparison

Deal activity in Q1 2025 has continued to decline in the consumer & retail sector with 236 total closed deals for the quarter compared to 346 in Q1 2024. This downturn was primarily driven by heightened geopolitical tensions and economic uncertainties, which led to increased caution among investors. Despite this, certain sectors within the consumer & retail industry, particularly luxury fashion and beauty, showed resilience, with strategic acquisitions focusing on brand consolidation and market expansion. This indicates a selective but steady interest in high-value assets within the sector.^{1 2}

Geographic Expansion

Top U.S. States: California led all states with 113 transactions, followed by Florida (98) and Texas (84), underscoring the sector’s concentration in high-growth, consumer-driven markets.

Cross-Border Trends: U.S.-based targets continued to dominate activity, though interest from international buyers remained steady, signaling ongoing global demand for U.S. consumer and lifestyle assets. Examples include BroadPeak Capital’s acquisition of Roti Restaurants Inc.

Notable Transactions

Largest Transactions Closed

Other Strategic Buyer Transactions Closed

Other Financial Buyer Transactions Closed

Emerging Trends

Key trends shaping Consumer and Retail M&A:

1. Growth in Experiential and Leisure Investments
   There is a notable uptick in investments within the hospitality, travel, and leisure sectors, as consumer demand for experiences continues to rise. This trend is supported by a recovery in global tourism and a shift in consumer spending from products to experiences, prompting increased deal activity in these areas.³
2. Rise of Digital-First Retail Models
   The shift toward e-commerce continues to accelerate, with many traditional consumer & retail brands seeking digital-first acquisition targets to expand their online footprint. ⁴
3. Sustainability as a Key Driver for Investment
   Sustainability continues to be a major focus, particularly in the fashion and beauty industries, where consumers increasingly prefer eco-friendly and ethically sourced products.⁴
4. Subsector Spotlight: Health & Wellness
   The health and wellness subsector is witnessing growth, with consumers prioritizing self-care and preventive health measures.⁴
5. Subsector Spotlight: Pet Care Industry Expansion
   The pet care industry continues to expand, driven by strong underlying demographic trends and consumer preferences.⁴

Outlook for Next Quarter

Opportunities: Physical retail stores are undergoing a transformation to offer immersive experiences that cannot be replicated online. By investing in in-store services and experiences, retailers can boost customer acquisition, brand identity, and loyalty.⁵

Risks: Despite some stabilization, inflation remains a concern, with the Federal Reserve projecting core prices to grow by 2.8% in 2025. This could impact consumer spending and, consequently, M&A valuations and activity.⁶

Predicted Activity: The retail sector continues to face challenges, leading to a rise in distressed M&A as financially stable companies look to acquire brands, intellectual property, and assets from struggling businesses.⁴

PCE Transactions

 

Served as advisor to Taylors Pharmacy on their sale to Revelation Pharma

Served as advisor to Steinhafels Holding Company, Inc. as they became 100% ESOP owned

Served as advisor to OOBE Holdings, Inc. on their sale to OOBE Holdings ESOP Trust

Served as advisor to Wawa as the Wawa ESOP Trust purchased additional shares of Wawa, Inc.

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