By Michelle Briffett, Alexander Belderok and Eesha Nayak

Mega-mergers have shaped the last few years of M&A activity in the specialty food and beverage ingredient sector. The sector is now entering a new period of M&A as these mega-mergers move to synergy-realization, the industry faces inflation-related consumer spending weakness and the M&A market is challenged by high interest rates. In our report, “Beyond the Mega-Merger,” we explore what is next for M&A in the specialty food and beverage ingredient sector.

Our analysis reveals that the specialty food and beverage ingredient industry has outpaced the underlying packaged food and beverage market on EBITDA growth over the last 10 years (+15%.) Value expansion in the sector has been driven by the industry’s ability to deploy solutions for key consumer and regulatory demands, such as clean labels, natural ingredients and healthier products. Historically, this value expansion has been awarded in capital markets, demonstrated by premium trading multiples. As a confluence of industry and economic factors put pressure on the industry, the premium in the stock market recently dissipated.

Our report explores the role that M&A has played and will continue to play for the food ingredients industry. M&A has enabled specialty food and beverage ingredient players to create solutions around these consumer and regulator demands through broader and deeper portfolios of products and capabilities. The M&A market has responded with EV/EBITDA transaction multiples rising to over 15x in most recent deals.

As the M&A market emerges from a challenging period, our report provides insights into which players will be active investors, the kinds of assets that will be available, the future of trading and transaction multiples and the value creation theses that will underpin upcoming investments.

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We support our clients along the full investment lifecycle from ideation through to value creation on both buy- and sell-side activities to help boost returns.

Download our report to learn more about the future of M&A in the specialty food and beverage ingredient sector.