Specialty distribution sector landscape
M&A Activity & Aggregate Deal Value: Q3-19 – Q3-21
- Global aggregate deal value for the Specialty Distribution sector increased 5.9% to $7.1bn in Q3-21, relative to Q2-21
- During the quarter, reported U.S. aggregate M&A deal value totaled $2.6bn, down from 4.9bn(2) reported in the second quarter of 2021
- U.S. M&A activity for the Specialty Distribution sector witnessed a slight decline of 0.9% in Q3-21 on a quarter-over-quarter basis, while global M&A declined 10.1%
- The U.S. accounted for 40.8% of total M&A activity in Q3-21, up from 37.0% reported in Q2-21
- While commenting on the current supply chain disruptions, Jerome H. Powell, the Fed’s chair said: “It is frustrating to see the bottlenecks and supply chain problems not getting better — in fact, at the margin, apparently getting a little bit worse… We see that continuing into next year, probably, and holding inflation up longer than we had thought.”
Specialty distribution public company sector overview
| Sector | LTM Trading Multiples | Description | |
|---|---|---|---|
| TEV / Revenue |
TEV / EBITDA |
||
| Automotive | 2.33x | 13.2x | Omni-channel suppliers of aftermarket parts and accessories |
| Building Products | 1.17x | 11.2x | Suppliers of products used in residential and commercial construction applications |
| Consumer Products | 2.28x | 15.5x | Distributors of specialty residential products |
| Food Service | 0.52x | 13.7x | Suppliers of food and non-food products to restaurants, hospitals, and schools and universities |
| Healthcare | 0.74x | 10.1x | Providers of pharmaceuticals, medical supplies, equipment and devices |
| Specialty Chemicals | 3.03x | 16.6x | Suppliers of smaller volume chemical formulations used in specific applications |
| Industrial | 1.52x | 14.8x | B2B distributors of products, equipment, and supplies to a range of industrial applications |
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Footnotes
1. The spike in Q4-20 M&A aggregate deal value is attributed to The Home Depot’s acquisition of HD Supply Holdings, Inc., for $10.3bn. The deal constituted 69.6% of the U.S. aggregate deal value and 52.0% of global deal value in Q4-20.
2. In May 2021, Performance Food Group Company acquired Core-Mark Holding, for $2.7bn, representing 55.1% of the U.S. aggregate deal value and 40.3% of aggregate global deal value in Q2-21.
