Stout PPA Study Reports That Allocations Declined as Contingent Deal Value Rose

Stout announced the release of its 2026 Purchase Price Allocation Study, which examines purchase price allocations reported in SEC filings by public-company acquirers. The study found fewer reported non-bargain-purchase transactions in 2025, while contingent consideration became both more prevalent and a larger component of deal value.

Stout identified 725 non-bargain-purchase transactions completed in 2025 compared with 800 in 2024, representing a decline of approximately 9%. The study also found notable shifts in deal structure and significant differences in transaction activity and value across industries.

Key findings include:

• Overall transaction volume declined approximately 9% with 725 transactions in 2025 compared with 800 in 2024.
• Contingent consideration became more significant in 23.7% of transactions compared with 22.3% in 2024. Among transactions with contingent consideration, it represented 20.3% of enterprise value on average compared with 17.4% the prior year.
• Consumer Discretionary saw fewer but significantly larger deals, as transaction count declined from 82 to 63 while median enterprise value increased from $27 million to $92 million.
• Information Technology bucked the broader slowdown, as transaction count increased from 177 to 191 and median enterprise value rose from $63 million to $79 million. Median goodwill as a percentage of enterprise value also increased from 62% to 69%.

“The 2025 findings show that the M&A market was more nuanced than the decline in overall transaction count might suggest,” said Shishir Khetan, Managing Director at Stout. “We saw meaningful differences across industries, as well as an increase in the use and relative size of contingent consideration. These trends reinforce the importance of looking beyond topline deal activity to understand how transactions are being structured and where value is being allocated.”

Sector trends varied considerably. Consumer Staples, Health Care, and Information Technology recorded increases in transaction counts, while Communication Services, Consumer Discretionary, Energy, and Industrials declined. Goodwill as a percentage of enterprise value also moved differently across sectors, increasing in Energy, Health Care, Industrials, Information Technology, and Materials, while declining in Communication Services, Consumer Discretionary, and Consumer Staples.

“The increase in contingent consideration is particularly notable because it can add complexity to both deal valuation and purchase accounting,” said Justin Pogge, Managing Director at Stout. “As more transaction value is tied to future performance, companies need to carefully consider the assumptions underlying those arrangements and how they affect fair value measurements. The PPA Study provides useful benchmarks for understanding those outcomes in the context of comparable publicly reported transactions.”

Stout reviewed 22,953 10-K and 10-Q filings filed during the four quarters ended March 31, 2026, primarily covering fiscal periods ended during 2025. The study provides purchase price allocation benchmarks for 2025 and the five-year period ended December 31, 2025, across 47 industry sectors and subsectors.

The benchmarks are designed to assist professionals in evaluating purchase consideration and allocations to identifiable assets and goodwill. Stout notes that transaction-specific factors can result in substantial variation even within the same industry.

To learn more, view the 2026 Stout Purchase Price Allocation Study.