Food & Agriculture Q4 2025

Executive Summary

M&A activity in the Food & Agriculture sector moderated through Q4 2025, with 366 closed transactions (LTM), down from 429 in Q4 2024, reflecting higher financing costs, subdued consumer spending, and inflation-driven margin pressures. Activity further softened in Q4 2025, with 311 closed transactions (LTM) versus 456 in Q4 2024, as buyers remained disciplined amid margin pressure and valuation recalibration.

Despite lower volume, strategic acquirers completed 264 transactions, or approximately 85% of total activity, driven by portfolio optimization, brand expansion, and supply chain scale, while financial buyers completed 47 transactions, reflecting selective sponsor participation focused on resilient platforms and niche categories. Valuations continued to normalize, with median TEV/EBITDA declining to 9.05x and TEV/Revenue compressing to 1.31x, as buyers emphasized profitability, cash flow durability, and pricing power.

“While transaction volumes softened in 2025, strategic buyers continued to anchor Food & Agriculture M&A activity,” said Michael Poole, Managing Director at PCE. “Acquirers remained focused on scale, brand strength, and durable earnings, supporting a fundamentally active—though increasingly selective—deal environment heading into 2026.”

Market Dynamics

Valuation pressure persisted through Q4 2025 as investors continued to recalibrate pricing amid a more disciplined deal environment. Median TEV/EBITDA declined to 9.05x, down from 10.57x in Q4 2024, while TEV/Revenue compressed to 1.31x, reflecting increased focus on earnings durability and margin quality.

Buyers remained selective, prioritizing targets with proven profitability, operational efficiency, and differentiated product portfolios over purely growth-oriented assets. ¹

Buyer Landscape

Strategic Acquirers: Strategic buyers drove the majority of Q4 2025 activity, completing 264 transactions, or approximately 85% of total deals. Activity was led by large-scale food and beverage companies pursuing brand expansion and portfolio realignment, highlighted by Mars’ $36.2 billion acquisition of Kellanova and Hershey’s $750 million acquisition of LesserEvil, underscoring continued appetite for scaled, branded assets. ¹

Financial Buyers: Financial sponsors completed 47 transactions, representing 15% of deal volume, reflecting a measured approach amid tighter financing conditions. Sponsor activity focused on targeted investments across specialty food, beverage, and agriculture-adjacent businesses, with emphasis on platform stability and operational efficiency.¹

Industry Comparison

The Food & Agriculture sector experienced a meaningful slowdown in Q4 2025, with 311 closed transactions (LTM), representing a 32% decline from Q4 2024. The reduction in activity coincided with continued valuation compression, as median multiples trended lower and buyers remained disciplined in capital deployment.

Despite softer deal volume, the sector continues to exhibit defensive characteristics, supported by essential end-markets, stable consumer demand, and mission-critical supply chains. Looking ahead, the Q4 2025 environment suggests a market focused on selectivity rather than retreat. As valuation expectations normalize and high-quality assets continue to attract interest, transaction activity is positioned to stabilize, with disciplined strategic and financial buyers driving deal flow into 2026.

Geographic Expansion

Top U.S. States: Transaction activity remained concentrated in key food and agriculture hubs. California led with 53 transactions, followed by New York (24) and Florida (19), reflecting strong deal flow in branded foods, beverages, and specialty products. The Midwest continued to contribute meaningfully, led by Illinois (17), Pennsylvania (16), and Michigan (14), supported by processing, distribution, and agribusiness assets.¹

Cross-Border Trends: Cross-border participation remained present, with foreign buyers acquiring U.S.-based targets, particularly in branded food and beverage categories. Notable examples include Corporación Castillo Hermanos’ acquisition of Harvest Hill Beverage Company, highlighting continued international interest in U.S. food assets with established brands and scalable operations. 

Notable Transactions

Largest Transactions Closed

Other Strategic Buyer Transactions Closed

Other Financial Buyer Transactions Closed

Emerging Trends

Key trends shaping Food and Agriculture M&A:

1. Record Production & Trade Dynamics
   U.S. agricultural markets in 2025 saw record corn output and historic acreage, boosting export capacity and reinforcing the U.S.’s role in global supply. However, soybean exports hit a 13-year low amid shifting trade patterns with China, underscoring volatility in key commodity flows.⁴
2. Tech-Enabled Efficiency & Precision Agriculture
   Adoption of AI, drones, digital sensors, and IoT is accelerating operational transformation in farming, enabling real-time monitoring and predictive decision-making that improve yields and lower waste. Recent U.S. state legislation has formalized drone deployment for precision planting and spraying—signaling broader tech adoption pathways.⁸
3. Alternative & Lab-Grown Food Innovation
   Novel food production methods such as lab-grown plant-cell snacks and cellular agriculture products are gaining traction, reflecting consumer appetite for innovation and sustainability. Progress includes publicly reported new product development pilots using 3D printing and plant cell matrices.⁵
4. Market Pressure from Climate & Supply Shocks
   Extreme weather events and climate pressures—such as production disruptions in the Caribbean and water scarcity in major wheat regions—are heightening concerns about food security and supply chain risk.⁶
5. Subsector Spotlight: Produce & Consumer Trends
   Consumer preferences continue shifting toward health-oriented, nutrient-dense, and convenience produce options, shaping supply and product innovation in fresh categories. Sustainability and transparency in sourcing remain top priorities for retail and foodservice segments.²
6. Subsector Spotlight: Alternative Proteins & Next-Gen Foods
   Plant-based and lab-grown products are transcending niche status, driven by climate goals and cost pressures. Consumer demand for sustainable proteins continues to influence innovation pipelines and cross-sector R&D collaborations.²

Outlook for Next Quarter

Opportunities: Precision agriculture and automation continue to gain scale, with industry estimates indicating over 60% of U.S. farms now using some form of precision or data-enabled technology, supporting buyer interest in tech-enabled platforms. Additionally, record U.S. corn production in 2025 and stabilizing input costs may improve visibility into earnings for crop-exposed businesses.⁴

Risks: Wage inflation remains a key pressure point for labor-intensive food and ag models, with agricultural labor costs rising at a mid-single-digit annual rate in many regions. Trade volatility persists, as U.S. soybean exports fell to multi-year lows in 2025, increasing earnings variability for export-dependent operators.³

Predicted Activity: M&A activity is expected to remain steady, with strategic buyers focused on assets that enhance efficiency, automation, and supply-chain resilience. While climate risk and margin compression may moderate deal sizes and valuations, continued investment in technology and food innovation is likely to sustain transaction flow into early 2026.⁷

PCE Transactions

Served as advisor to Beef 'O' Brady's in their solvency opinion

Served as advisor to Ice House America, Inc. in their sale to Ice House America ESOP Trust

Advised Heller Brothers Packing Corp in their valuation for tax reporting

Served as advisor to Pacific Tomato Growers for strategic advisory services

Advised Tropicana on their sale of Juice Bowl Products, Inc. to private investors

Served as advisor to PACA on their recapitalization by a private investment group

Advised Wawa ESOP Trust in their purchase of additional shares in Wawa, Inc.

Served as advisor to Next-Port, Inc. on their merger with Merchants Market Group

Advised Western Milling in their sale to the Western Milling ESOP Trust

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