After some speculation of how the food and beverage sector would fair in 2021, M&A activity continued the recovery first seen in the second half of 2020, with deal volume surpassing what was seen in that year and total deal value increasing significantly. The rise in deal volume and value can be attributed to the confluence of monetary policy pushing for low interest rates and strong consumer demand, which led to high valuations and a robust stock market.
The reported number of M&A transactions that closed during 2021 was 305, up from the 299 reported transactions that closed in 2020. There were 38 middle market transactions that closed in 2021, a 52% increase from the 25 middle market transactions that closed in 2020. Among the major middle market transactions which closed in 2021 were:
The aggregate deal value of the middle market M&A transactions with reported values was $2.3 billion in 2021. This was a 42% increase from the total deal value of middle market M&A transactions when compared to the $1.6 billion seen in 2020. During the last five years, 2021 was the second-highest year in terms of aggregate deal value of closed middle market transactions with reported deal values.
Aggregate transaction value and number of deals
Middle market is defined as transaction values between $10 million and $200 million
Source: S&P Capital IQ and Baker Tilly Capital research (January 2022)
The branded packaged goods segment continued to lead the food and beverage industry’s M&A activity by number of deals closed. The branded packaged goods segment accounted for 38.5% of the total deals closed in 2021, up from 28.7% of total deals closed in 2020. It will be interesting to see if the branded packaged goods segment will continue to own the largest share of M&A deals in the food and beverage industry in the coming years.
Not far behind, however, the beverage segment accounted for the second-largest percentage of total deals in 2021 at 25.3%, which is a modest decline from the 25.7% seen in 2020.
Source: S&P Capital IQ and Baker Tilly Capital research (January 2022)
For an in-depth look at M&A activity in the food and beverage industry, download a free copy of the food and beverage M&A update 2021. The report includes:
Baker Tilly Capital professionals develop mergers and acquisitions (M&A) updates in different industries and regions. These reports provide an overview of M&A activity, including:
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