Industry Trends
Largest Transactions Closed
- Target
- Buyer
- Value($mm)
Advised Western Milling in their sale to the Western Milling ESOP Trust
Executive Summary
M&A activity in the Food & Agriculture sector showed renewed momentum in Q1 2025, with 443 closed transactions (LTM), up from 387 in Q1 2024. While still below earlier peaks, the sector demonstrated resilience amid shifting macroeconomic conditions. Strategic buyers accounted for 87% of deal volume, while financial buyers remained active, particularly in branded and specialty food segments. Valuations trended downward, with median TEV/EBITDA at 10.22x and TEV/Revenue at 1.31x, reflecting cautious optimism and a growing focus on operational efficiency and earnings quality.
Market Dynamics
Valuation pressures persisted in Q1 2025 as Food & Agriculture buyers adjusted to a higher interest rate environment and tighter lending conditions. Revenue multiples compressed to 1.31x, down from 1.39x the year prior, signaling investor skepticism toward growth-centric models. EBITDA multiples also declined to 10.22x, with premium valuations largely reserved for targets offering scale, brand equity, or essential supply chain roles.
Buyer Landscape
Strategic Acquirers: Strategic buyers represented 87% of transactions (347 of 442), actively acquiring branded food businesses and vertical supply chain assets. Of the 347 transactions, 113 were corporate divestitures, and 34 of those (30%) involved businesses previously backed by private equity firms. Notable transactions include Flowers Foods’ $795M acquisition of Simple Mills and TreeHouse Foods’ $205M deal for Harris Freeman’s tea business.
Financial Buyers: Financial buyers accounted for 13% of deals, with activity centered on specialty and value-added food platforms. Private equity firms like Advent International and New Water Capital targeted companies with strong brand potential and operational upside.
Industry Comparison
In Q1 2025, the Food & Agriculture sector exhibited resilience amid economic headwinds. M&A activity rebounded, with a 21% year-over-year increase in deal volume, driven by interest rate cuts and strategic acquisitions in food production. However, the sector faced challenges, including a projected 4% decline in U.S. net farm income due to rising input costs and declining commodity prices. Despite these hurdles, the sector's inherent stability and essential nature continue to attract investor interest.1 2 3
Geographic Expansion
Top U.S. States: California led with 62 transactions, followed by Illinois (28) and Texas (27), reflecting strong agribusiness presence and food innovation hubs in these regions.
Cross-Border Trends: While U.S.-based targets dominated, continued interest from Canadian and global buyers highlights sustained cross-border appetite for U.S. food production and processing assets. As trade tensions increase, cross-border transactions could see a slowdown.
Notable Transactions
Largest Transactions Closed
| Target | Buyer | Value ($mm) |
| Garza Food Ventures, LLC | Flowers Foods, Inc. | $1,200.00 |
| Simple Mills, Inc. | Flowers Foods, Inc. | $795.00 |
| West Central Ag Services Inc. | CHS Inc. | $225.00 |
| Tea business of Harris Freeman & Co., Inc. | TreeHouse Foods, Inc. | $205.00 |
| Grubhub Inc. | Wonder Group, Inc. | $150.00 |
Other Strategic Buyer Transactions Closed
| Target | Buyer | Value ($mm) |
| Holy Hound Taproom, LLC | Royal Square Development & Construction Inc. | n/a |
| Rogge's Sausage, Inc. | Crystal Bay Seafoods LLC | n/a |
| Hato Potrero Farm Inc. | Marquez Brothers International, Inc. | n/a |
| Revolution Farms LLC | Peckham, Inc. | n/a |
| Angel's Food Market, Inc. | Green Valley Marketplace | n/a |
Other Financial Buyer Transactions Closed
| Target | Buyer | Value ($mm) |
| Nova Seafood LLC | Highwood Harbor | n/a |
| Willamette Valley Meat Company | Bochi Investments, LLC | n/a |
| Dutch Gold Honey, Inc. | New Water Capital, L.P. | n/a |
| Sauer Brands, Inc. | Advent International, L.P. | n/a |
| NDO Bev LLC | 9.58 Venture Partners | n/a |
Source S&P Capital IQ as of 4/17/2025 and PCE Proprietary Data
Emerging Trends
Key trends shaping Food and Agriculture M&A:
- Technology-Driven Disruption
Technological advancements are transforming the Food & Agriculture sector. Companies leveraging innovations in precision agriculture, food processing, and supply chain management are becoming attractive acquisition targets for their potential to improve efficiency and product quality.4 - Private Equity's Renewed Interest
After a period of caution, private equity firms are re-entering the M&A arena, focusing on smaller, bolt-on acquisitions that complement existing portfolios. This shift is driven by improved market conditions and the desire to invest in companies with strong growth prospects.5 - Rising Demand for Global Cuisines
Consumer interest in diverse and authentic international cuisines is fueling M&A activity. Brands offering Hispanic, Asian, and Indian food products are particularly attractive to acquirers seeking to capitalize on this growing demand.4 6 - Sustainability and Ethical Sourcing
Companies demonstrating commitment to sustainability—through ethical sourcing, recyclable packaging, and transparent supply chains—are becoming prime acquisition targets. 2
Outlook for Next Quarter
Opportunities: Nearly half of food industry companies plan to invest in artificial intelligence and supply chain tracking systems in 2025.
Risks: Potential trade tensions, such as tariffs by the U.S. on key partners like China, could impact global commodity demand affecting cross-border M&A activity and consumer purchasing power.6
Predicted Activity: The seafood sector is expected to experience increased M&A activity due to its highly fragmented structure, with fish farmers seeking consolidation opportunities to leverage economies of scale and enhance operational efficiency.7
PCE Transactions
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