As we last reported, 2016 represented a record year with M&A activity and valuations for the consumer products and retail industry moving to an all-time high since the end of the Great Recession. Many of the industry and supply/demand dynamics that drove record M&A activity last year remain in play for 2017 – including an abundance of capital, favorable financing, increasingly robust balance sheets, and continually shifting market and competitive dynamics.
Many consumer product companies and online retailers in particular are continuing to grow at a steady, healthy pace. Given these factors, our outlook for 2017 remains highly favorable – 2017 M&A activity has increased year over year for consumer product companies and valuations remain robust.
At the same time, the traditional retail side of the industry continues to struggle with increasing pressure from competitors that have more effective online shopping platforms and pricing models, more agile direct-to-consumer infrastructures, and disruptive technologies and social media outreach to capture consumers. Traditional retail M&A activity and valuations for 2017 have declined year over year, with a shrinking number of healthy retail targets. However, demand for internet and direct marketing retailers continue to increase, with M&A activity and valuations for such companies continuing to hit all-time post-recession highs this year.
We expect overall M&A activity across consumer products & retail to remain solid throughout 2017, with status quo fundamentals continuing to play out.
Access the full report, including a comprehensive breakdown of M&A and Valuation Trends, Market Performance, and latest M&A transactions, via the link above.