Transportation & Logistics | Q1 2025 | PCE Investment Bankers

Executive Summary

M&A activity in the Transportation & Logistics sector decelerated in LTM through Q1 2025, with 112 transactions closed, down from 132 in LTM through Q1 2024 and 162 in 2022. Strategic buyers led the charge, representing 86.6% of total deal flow, as consolidation efforts remained focused on scaling operations and enhancing efficiency. Valuation multiples trended downward, with median TEV/EBITDA falling to 9.2x from 10.3x YoY and TEV/Revenue compressing to 1.4x from 2.0x. This signals a more cautious investment environment, where profitability and stability are favored over top-line growth.¹

Market Dynamics

The LTM though Q1 2025 marked a 15% YoY decline in deal volume, driven by elevated borrowing costs and slower freight demand across core subsectors. Valuation multiples reflected a pullback in buyer risk appetite, with TEV/EBITDA and TEV/Revenue contracting meaningfully. Investors continue to show a preference for recession-resistant assets with consistent earnings and limited exposure to spot market volatility.^{1 2}

Buyer Landscape

Strategic Acquirers: Dominated the market with 97 deals (89.9%), focusing on enhancing scale and expanding service capabilities. Examples include Radiant Logistics’ acquisition of Transcon Shipping to augment freight solutions.

Financial Buyers: Accounted for 11 transactions (10.2%), emphasizing targeted consolidation and efficiency optimization. Hidden Harbor Capital Partners' acquisition of Coast to Coast Logistics highlights continued platform-building interest in specialized logistics services.¹

Industry Comparison

M&A activity in Transportation & Logistics declined more sharply than in several other sectors, with Q1 2025 volume down 15% YoY LTM. While median TEV/EBITDA compressed to 9.2x, industries with recurring revenue models or technology exposure sustained higher multiples. The drop in T&L revenue multiples—from 2.0x to 1.4x—highlights reduced investor tolerance for volatility in asset-intensive and rate-sensitive segments.¹

Geographic Expansion

Top U.S. States: California (13 deals), Texas (10), and Illinois (7) led transaction activity, driven by strategic positions in logistics infrastructure and robust regional economies.

Cross-Border Trends: No notable cross-border transactions reported, indicating a predominantly domestic acquisition environment in the sector for Q1 2025.¹

Notable Transactions

Largest Transactions Closed

Other Strategic Buyer Transactions Closed

Other Strategic Buyer Transactions Closed

Emerging Trends

Key trends shaping Transportation and Logistics M&A:

1. Nearshoring and Domestic Supply Chain Realignment
   Supply chain disruptions and geopolitical risk have driven increased investment in domestic and nearshore logistics infrastructure. U.S.-Mexico cross-border logistics deals have accelerated, with companies seeking to diversify away from Asia-dependent supply chains.
2. Fleet Electrification and Clean Tech Integration
   Acquirers are targeting firms with EV-compatible logistics fleets and clean energy solutions. Federal incentives under the Inflation Reduction Act have made electric freight and drayage platforms more attractive acquisition targets.³
3. Data-Driven Freight Optimization
   M&A is shifting toward logistics tech platforms offering AI-based freight optimization, warehouse robotics, and predictive route planning. Strategic buyers view these capabilities as essential for margin protection and real-time service delivery.⁴
4. Subsector Spotlight: Cold Chain Logistics
   Cold chain logistics continues to outperform, driven by the rise of biologics, pharmaceuticals, and fresh food delivery. Q1 2025 saw increased interest in temperature-controlled freight providers, particularly in private equity platform strategies targeting niche distribution verticals. These companies command EBITDA multiples above the sector median due to high barriers to entry and mission-critical service delivery.^{5 6}
5. Subsector Spotlight: Staffing
   The logistics sector is experiencing a talent crisis, leading to increased consolidation in staffing services to address labor shortages.⁷

Outlook for Next Quarter

Opportunities: Acquirers will likely focus on specialized. logistics firms with tech-enabled capabilities, including cold chain, last-mile automation, and freight visibility software. Strong interest persists in assets that support nearshoring or offer differentiated final-mile delivery.⁸

Risks: Persistent inflation, volatile fuel costs, and reduced consumer discretionary spending may limit deal volume and compress valuations further. Firms with heavy asset bases and weak margin profiles may become distressed targets.

Predicted Activity: A steady increase in PE-driven divestitures and carve-outs is anticipated, as firms respond to high interest rates and focus on portfolio optimization strategies.

PCE Transactions

Contact Us