Capstone Partners Reports: Consumer M&A Market Rebound Delayed, Gradual Improvement Expected in 2026

BOSTON, April 27, 2026 /PRNewswire/ -- Capstone Partners, a leading middle market investment banking firm, released its Annual Consumer M&A Report, which shares insights into public market valuations, the macroeconomic climate, merger and acquisition (M&A) activity, and an outlook for 2026 industry activity. With extensive knowledge and transaction experience, Capstone Partners' Consumer Investment Banking Team provides unique commentary on 14 key sectors: Apparel, Footwear & Accessories; Automotive Aftermarket; Beauty; Beverage; Convenience Store & Retail Fuel; E-Commerce; Food; Home Goods; Outdoor Recreation & Enthusiasts; Pet; Restaurants; Sports Technology; Tactical Products; and Vitamins & Supplements.

Capstone believes signs of a rebound in Consumer industry M&A activity have been detected following a year of market uncertainty which dampened activity in 2025. Consumer industry deals fell 18.9% year-over-year (YOY) in 2025, a considerable drop given this contraction follows two years of declines in 2022 (-9.6% YOY) and 2023 (-29.6% YOY) and a year of only moderate growth in 2024 (+8.6% YOY). A large retreat in private equity (PE) dealmaking (-22.9% YOY) linked to market unpredictability and a lack of asset monetization served as one of the largest drivers of this decline. Moreover, a dramatic 33.8% YOY contraction in public strategic acquisitions also strained the Consumer M&A market. This weak appetite—particularly among public buyers—weighed on overall valuations, bringing the median EV/EBITDA multiple down to 9.2x in 2025, the lowest median multiple recorded since Capstone began tracking the data 10 years ago. Despite dampened consumer M&A in 2025, we have seen the initial signs of a rebounding market, due in large part to buyers getting comfortable with macroeconomic uncertainty. We see four major contributors to a positive outlook for consumer M&A in 2026.

The number of companies acquired for an enterprise value greater than $250 million significantly expanded and reached a market high in 2025, representing 30.6% of all disclosed consumer M&A deals. Large deals have been the precursor to the opening of broader M&A activity. In years marked by declining consumer M&A volume but a high share of large deals—more than 20% of disclosed deals above $250 million in enterprise value—the Consumer M&A market saw deal volume increase 19.6% on average the following year based on trends from 2016 to 2025.

In 2025, Discretionary sectors with strong M&A growth included Tactical Products (+54.3% YOY), Outdoor Recreation & Enthusiasts (+47.7% YOY), Vitamins & Supplements (+30% YOY), and E-Commerce (+12.8% YOY). Discretionary sectors are more exposed to macroeconomic swings, more sensitive to deal volume volatility and margin compression, and more difficult to underwrite during uncertainty. Because of this, investors move towards defensive non-discretionary opportunities in a strained economy. By re-entering the Discretionary vertical, acquirers and investors have indicated that downside risk feels contained, demand has bottomed or stabilized, and operating outlooks have gained credibility again.

Notably, PE add-on activity climbed 29.4% month-over-month (MoM) in December 2025 while platforms jumped 75% MoM, a combined 48.3% rise in the final month of the year. As of the end of 2025, 39% of U.S. PE companies have been held for more than four years, indicating a critical junction where PE firms will need to return funds to limited partners (LPs). If exits continue at the current pace (972 in 2025), it would take more than seven years for the backlog of portfolio companies aged four years or older to clear out, according to Capstone's Q4 2025 Capital Markets Update. As a result, exits are expected to accelerate as rate cuts have materialized and LPs are demanding distributions.

"We expect the initial M&A rebound to come from larger capitalization deals as these companies often understand market complications and are well-equipped to take advantage of a changing market as buyers and sellers. Several Discretionary sectors, which are typically the first pocket of the market to see momentum return in a rebound have been recovering, suggesting a broader industry rally in 2026. Consumer industry PE investment appetite experienced an increase in the past couple of months due to a greater willingness to buy and sell existing portfolio companies despite lingering market uncertainty. With a substantial need for PE firms to monetize an aging backlog of assets and distribute returns to LPs, these factors support expectations for a gradual return to Consumer industry dealmaking in 2026," said Capstone's Head of Investment Banking Ken Wasik, the lead contributor in the report.

Also included in this report:

• How M&A volumes and public market valuations in the Consumer industry fared in 2025.
• A detailed analysis of M&A valuation drivers for consumer companies.
• What trends are driving M&A activity across the Consumer industry and a breakdown of each of the 14 highlighted sectors.
• Expectations for Consumer industry performance and M&A in North America in 2026.
• Which sectors outperformed the broader Consumer industry and are poised to garner buyer interest in 2026.

To access to full report, click here.

ABOUT CAPSTONE PARTNERS

For over 20 years, the firm has been a trusted advisor to leading middle market companies, offering a fully integrated range of investment banking and financial advisory services uniquely tailored to help owners, investors, and creditors through each stage of the company's lifecycle. Capstone's services include M&A advisory, debt and equity placement, corporate restructuring, special situations, valuation and fairness opinions and financial advisory services. Headquartered in Boston, the firm has 175+ professionals in multiple offices across the U.S. With 12 dedicated industry groups, Capstone delivers sector-specific expertise through large, cross-functional teams. Capstone is a subsidiary of Huntington Bancshares Incorporated (NASDAQ:HBAN). For more information, visit www.capstonepartners.com.

SOURCE Capstone Partners