Insight

Specialty Distribution M&A update Q3 2021

Read more about the M&A activity in the distribution services sector

Stephen Guy

Stephen Guy

Managing Director, KPMG Corporate Finance LLC

+1 410-949-8909

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 

We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.


 

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.


Subscribe

Get the latest updates to KPMG Corporate Finance LLC industry insights


Related content

Business services

KPMG Corporate Finance LLC’s Business Services team provides investment banking and financial advisory services to a broad range of outsourcing service providers.