Transportation & Logistics | Q2 2025 | PCE Investment Bankers

Executive Summary

The Transportation & Logistics sector saw a continued moderation in M&A activity, with 113 transactions closed in the LTM period ending Q2 2025, down from 132 in the prior year. Strategic buyers overwhelmingly led the market, accounting for 88.5% of all deals, indicating a strong focus on consolidation and capability enhancement. The quarter was defined by Stonepeak's $3.1 billion take-private acquisition of Air Transport Services Group, showcasing significant private capital interest in asset-heavy infrastructure. Valuation multiples normalized, with the median TEV/EBITDA multiple decreasing to 10.44x from 11.46x, reflecting a more disciplined buyer approach amid stabilizing freight markets and economic uncertainty.¹

Market Dynamics

The 14% year-over-year decline in transaction volume reflects a market adapting to post-pandemic normalization. After years of volatile freight rates and supply chain disruptions, buyers are now more selective, targeting assets that offer clear synergies or technological advantages. The compression in valuation multiples from a peak in 2024 suggests that the market is recalibrating to more sustainable long-term growth expectations, moving away from the frenetic pace seen in previous years.

Buyer Landscape

Strategic Acquirers: With 100 deals (88.5%), strategic buyers were focused on expanding service offerings and geographic reach. Global logistics giants like DHL were active, acquiring companies such as Integrated Distribution Services to bolster their 3PL and fulfillment capabilities in the competitive U.S. market.¹

Financial Buyers: While accounting for only 10 deals (8.8%), financial buyers made a significant impact through large-scale transactions. Stonepeak's acquisition of Air Transport Services Group, a leading provider of aircraft leasing and air cargo transportation, underscores private equity's strategy of investing in critical, long-term assets with contracted revenue streams.¹

Industry Comparison

The Transportation & Logistics sector's 14% decline in deal volume aligns with trends in other cyclical industries facing macroeconomic headwinds. However, unlike some sectors, transportation & logistics, continues to attract significant private capital for large infrastructure plays, as seen with the Stonepeak deal. This indicates investor confidence in the long-term demand for essential supply chain assets, even as M&A for smaller, less differentiated operators has cooled.

Geographic Expansion

Top U.S. States: M&A activity was concentrated in major logistics and transportation hubs. Texas (14 deals), California (9), and Ohio (7) led the nation, reflecting their importance in national supply chains, from port activity and cross-border trade to domestic distribution networks.¹

Cross-Border Trends: The acquisition of Merge Transportation by Nuvocargo highlights the growing focus on the U.S.-Mexico trade corridor. As companies continue to nearshore operations, M&A targeting cross-border logistics and technology platforms is expected to increase.

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. Supply Chain Technology Integration
   Acquirers are prioritizing targets with strong technology platforms that offer visibility, automation, and data analytics. The merger of Ware2Go and STORD exemplifies this trend, creating a more comprehensive tech-enabled 3PL provider to compete with larger incumbents.²
2. Nearshoring and Cross-Border Logistics
   As manufacturing and sourcing move closer to North America, demand for seamless cross-border logistics is surging. M&A is being used to acquire brokerage, drayage, and warehousing assets along the U.S.-Mexico border to capitalize on this secular shift.³
3. Consolidation of Fragmented Markets
   Industries like short-line rail, motorcoach services, and specialized freight are undergoing consolidation. Acquirers are rolling up smaller, regional players to build national platforms, increase efficiency, and gain market share.
4. Subsector Spotlight: Third-Party Logistics (3PL):
   The 3PL space remains a hotbed of M&A activity as companies race to offer end-to-end solutions, from warehousing to final-mile delivery. Technology is the key differentiator, with acquirers seeking targets that can automate processes and provide superior data insights to customers.
5. Subsector Spotlight: Asset-Heavy Infrastructure
   Assets like air cargo fleets, rail networks, and ports continue to attract significant investment from infrastructure funds and private equity. These assets offer stable, long-term cash flows and are critical to the functioning of the global economy, making them attractive in a risk-off environment.

Outlook for Next Quarter

Opportunities: Expect continued M&A focused on supply chain technology, particularly in areas of AI-driven demand forecasting and warehouse automation. Further consolidation in the highly fragmented trucking and brokerage markets will provide opportunities for both strategic and financial buyers.

Risks: Sustained economic softness could further dampen freight demand and pressure carrier profitability, potentially stalling some M&A processes. High labor costs and regulatory pressures, particularly related to emissions standards, remain key challenges for operators and could impact valuations.

Predicted Activity: Private equity take-privates of publicly traded logistics companies may continue as the public markets place lower valuations on these firms than private buyers. Strategic acquirers will focus on tuck-in acquisitions that add specific technological capabilities or geographic density.⁴

PCE Transactions

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