Market Monitor: Baked Goods

Market Monitor: Baked Goods

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Market Monitor: Baked Goods

Even with challenges from new tariff rules and changes in government regulations, mergers and acquisitions in the baked goods sector continue to grow. The pace of activity in this market is now ahead of the larger food and beverage industry.

Private Equity Firms Continue to Buy in a Fragmented Market

Because the baked goods industry is made up of many smaller businesses, it has become a focus for private equity firms looking to expand. Some of the most active buyers include:

These companies are steadily increasing their presence through acquisitions.

Valuation Multiples Rise by 12%

Publicly traded baked goods companies have seen their valuation multiples grow by 12 percent since the beginning of the year. These companies are now valued higher than others in the consumer packaged goods sector.

One Equity Partners Acquires CraftMark Bakery

In March 2025, One Equity Partners announced the acquisition of CraftMark Bakery, an Indianapolis-based manufacturer of frozen baked goods, from CIC Partners. CraftMark produces cookie dough, muffins, breads, and flatbreads for quick service restaurants and retail bakeries. With a large automated facility and over 400 employees, the company strengthens OEP’s position in the growing frozen bakery and foodservice markets.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: randerson@hexagoncapitalalliance.com

Johnny Sherwood, Director: jsherwood@hexagoncapitalalliance.com

Banker Insights: Autism Treatment

M&A heating up again- Autism treatment sector

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Private Equity Interest in ABA Businesses Is Growing

If you own an ABA business, you’ve likely seen an increase in interest from private equity firms. After a few quieter years, the ABA market is seeing renewed momentum

Why PE Firms Are Re-Entering the ABA Space

Private equity investors are shifting their view of the industry. Early concerns from high-profile failures  like CARD/Blackstone, Kadiant/TPG, and Elemy  are now seen as outliers. The sector is maturing, and the demand for autism services continues to rise.

Middle-Market Investors Lead the Charge

Unlike past cycles dominated by large-cap firms, today’s activity is driven by middle-market healthcare investors. These groups see opportunity in helping strong ABA providers scale to meet growing needs.

Challenges Remain — But So Does Opportunity

Labor shortages and insurance reimbursement pressures persist. Still, investors recognize the potential in best-in-class ABA companies that can grow efficiently and deliver quality care.

Recent ABA M&A Activity

  • May 2025: Alongside ABA Acquires San Diego ABA
    Backed by Fletch Equity, Alongside ABA expanded with acquisitions in Los Angeles and San Diego.

  • May 2025: Behavior Frontiers Sold to NexPhase Capital
    Operating in 12 states, Behavior Frontiers transitioned from Lorient Capital to NexPhase Capital.

  • March 2025: Unison Therapy Sold to Ascend Partners & Autism Impact Fund
    A multi-service provider, Unison was previously backed by Ridgemont Equity Partners.

Now may be the right time to explore your options. With investor interest rising, strong ABA providers are well-positioned for strategic growth or sale.

For more information or questions, please contact the Healthcare Services team:

Paul Kacik, Managing Director: pkacik@hexagoncapitalalliance.com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Market Monitor: Healthcare

Market Monitor: Healthcare

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Market Monitor: Healthcare

U.S. Healthcare Services M&A Transactions Decrease in Early 2025

Through April 2025, there were 186 U.S. healthcare services M&A transactions, marking a 21.2% decrease compared to the same period in 2024. This decrease reflects broader industry trends and economic factors affecting the sector.

Physician Medical Groups Segment Faces Challenges

The Physician Medical Groups segment saw a significant decline in transaction activity. This is largely attributed to increased regulatory oversight and concerns about market consolidation, which are leading to fears of reduced competition within the industry.

Rising EV/EBITDA Multiples Signal Market Resilience

Despite a slowdown in overall transaction activity, the median EV/EBITDA multiples for publicly traded healthcare services companies have risen from 12.3x to 13.7x since the start of 2025. This uptick suggests a resilient market for high-quality healthcare companies, even amidst a slowdown in M&A deals.

Factors Driving Future Healthcare M&A Activity

The healthcare industry is generally less impacted by changes in consumer spending habits, providing some stability in uncertain times. Several favorable M&A drivers are expected to support deal activity in the second half of 2025, including:

  • Adoption of new healthcare technologies

  • Stable or decreasing interest rates

  • Overall market dynamics

  • Availability of capital

These factors are expected to create a rebound in deal activity, positioning the healthcare services sector for growth in the latter part of 2025.

If you have any questions, please contact our contributors:

Paul Kacik, Managing Director: pkacik@hexagoncapitalalliance.com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

 

Banker Insights: Home Infusion & Specialty Pharmacy

Home INfusion & Specialty pharmacy

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NHIA 2025 Conference

Recent Conference Insights

Our Healthcare Investment Banking team recently attended the NHIA ’25 Conference in Washington DC, where we had the chance to reconnect with numerous clients, investors, and industry leaders in the Home Infusion and Specialty Pharmacy space.  With the Asembia Conference in Las Vegas coming up at the end of the month, we are seeing a noticeable increase in interest from Private Equity firms in this area of the healthcare ecosystem.

What’s Driving This M&A Activity? 

Shift in Care Settings: There’s increasing pressure from payers to move patients from hospital-based infusion centers to home or Ambulatory Infusion Centers.

Pipeline of Specialty Infusion Drugs: A high number of specialty infusion pharmaceuticals are progressing through the FDA approval process, creating new opportunities in the market.

Private Equity Activity: After a slower couple of years, many investors are pressuring their Private Equity firms to put money to work and take action.

For more information or questions, please contact the Healthcare Services team:

Paul Kacik, Managing Director: pkacik@hexagoncapitalalliance.com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Banker Insights: Substance Abuse Disorder Industry

Positive M&A Outlook- substance abuse disorder industry

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Recent Conference Insights

Our Healthcare Investment Banking team recently attended the 2025 Treatment Center Investment East Conference, where we had the opportunity to connect with leading investors, operators, and stakeholders across the Substance Use Disorder (SUD) treatment landscape. As we head further into 2025, we are seeing sustained investor interest in behavioral health, particularly in scalable, outcomes-driven treatment models.

Key Market Drivers Supporting Investor Interest

Rising Demand for Behavioral Health Services: Increased public awareness and ongoing efforts to reduce stigma around mental health and addiction continue to drive demand for comprehensive SUD treatment.

Favorable Reimbursement Environment: Investors remain drawn to providers with proven clinical outcomes and strong payer relationships, supported by stable reimbursement structures.

Market Fragmentation: Despite growing consolidation, the SUD space remains highly fragmented, offering significant opportunity for platforms to scale via add-on acquisitions and regional expansion.

Regulatory Tailwinds: Enhanced government funding and policy focus on combatting the opioid crisis continue to provide long-term support for providers and drive investment activity.

For more information or questions, please contact the Healthcare Services team:

Paul Kacik, Managing Director: pkacik@hexagoncapitalalliance.com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Market Monitor: Food & Beverage

Market Monitor: Food & Beverage

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Market Monitor: Food & Beverage

U.S. Food & Beverage M&A Activity in 2024

In 2024, the U.S. Food & Beverage industry saw 347 M&A transactions, marking an 8.4% increase in volume compared to 2023. This growth signals the continued strength of the sector despite broader economic conditions.

Non-Alcoholic Beverage Market Driving Investment Activity

With the global non-alcoholic beverage market projected to double over the next decade, several significant transactions have made headlines. Notable deals include:

  • PepsiCo’s acquisition of Poppi

  • Celsius’ acquisition of Alani Nu

  • Molson Coors’ majority stake in ZOA Energy

  • Keurig Dr Pepper’s acquisition of GHOST

  • Gryphon Investors’ majority investment in Spindrift

These high-profile deals reflect the growing investment potential in the non-alcoholic beverage market.

A Resilient Investment Opportunity in the Baked Goods Sector

The baked goods sector, a consistent staple of the American diet, remains highly attractive to investors, particularly in the private equity space. The sector is generally insulated from economic downturns, making it a steady investment target. Recent significant transactions include:

  • One Equity Partners’ acquisition of CraftMark Bakery

  • Platinum Equity and Butterfly Equity’s joint acquisition of Rise Baking

  • QualiTech’s (MidOcean Partners) acquisition of Ellison Bakery

These deals indicate ongoing investor interest in the baked goods industry.

Food & Beverage Contract Manufacturing Remains Attractive

Food & Beverage contract manufacturing companies continue to be highly sought after, as acquirers look to expand their production capabilities, enter high-growth product categories, and diversify their customer bases. Recent notable transactions include:

  • Falfurrias’ acquisition of Snak King

  • TruFood and Bar Bakers merging to form Tandem Foods

  • Clayton, Dubilier & Rice’s acquisition of Shearer’s Foods

These transactions showcase the increasing demand for manufacturing capabilities within the food and beverage sector.

Looking Ahead: M&A Activity in the Second Half of 2025

While M&A transaction volume in early 2025 has been slower, as is typical in the first 100 days of a new administration, the market is expected to gain momentum as President Trump’s tariff policies stabilize. Several factors suggest a more active M&A market in the second half of the year, providing new opportunities for growth and investment in the food and beverage sector.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: randerson@hexagoncapitalalliance.com

Johnny Sherwood, Director: jsherwood@hexagoncapitalalliance.com

Banker Insights: 2025 Natural Products Expo West Takeaways

Natural Products Expo West 2025

Expo West 2025 continues its long history of showcasing the latest innovations in natural and organic foods, beverages, and supplements, as well as beauty, personal care and home products.

The Hexagon Capital Alliance team is optimistic about the broader Food & Beverage ecosystem after several days on the floor dialoguing with clients and prospects, strategic and financial acquirers, and industry peers and colleagues.

Let’s take a closer look at some of our Consumer and Industrial teams’ most notable exhibitors:

Notable Exhibitors at the Show:

North Hall Highlights
  • ALOHA – The provider of plant-based protein bars and powders is a new addition to Bain & Company’s annual list of Insurgent Brands.
  • Chomps – Having received an $80 million investment from Stride Consumer Partners in 2022, the FL-based maker of meat sticks continues to experience explosive growth and is inspiring a new wave of meat snack brands.
  • Flair Flexible Packaging – Privately held and family-owned for 30+ years and boasting six vertically-integrated facilities across the U.S., Canada, Mexico, and South Korea.
  • Revere Flexpak – Privately held and owned by the Revere family, our neighbors in the Pacific Northwest, where the fourth generation is continuing the family’s specialty and custom packaging history.
Hall A Highlights
  • Glanbia Nutritionals – The global nutrition company boasts a strong balance sheet and is well positioned for additional M&A following its Foodarom and Flavor Producers acquisitions.
  • Graphic Packaging – Logical strategic acquirer in paper packaging; high bar for M&A targets competing with other capital allocation priorities (i.e. share buybacks, dividends, capex, etc.)
  • Pack Plus Converting – A local Southern California company providing flexible packaging products for various consumer sectors featuring digital & rotogravure printing and paper & poly solutions.
Hall B Highlights
  • Commercial Bakeries – Acquired by Graham Partners in 2023, the Canada-based producer of private label cookies recently acquired OH-based Imagine Baking.
  • Irresistible Foods Group – The family of brands led by King’s Hawaiian is actively seeking authentic “perimeter” brands to add to its growing portfolio.
  • Fortis Solutions – Serial acquirer under the tutelage of private equity sponsors, the company is a proven packaging powerhouse and industry mainstay.
Hall C Highlights
  • Bluegrass Ingredients – With new backing from TA Associates, the KY-based supplier of R&D-focused ingredients solutions is poised for both organic and M&A growth.
  • TricorBraun – Highly acquisitive in rigid packaging distribution; don’t count them out in flexible packaging solutions either.
  • Traco Packaging and YEBO – Both were recapitalized by private equity sponsors in 2021 and 2023, respectively; seeking add-on acquisitions.
  • Innovative Packaging Solutions – A family-owned business in Southern California providing flexible packaging solutions to leading, global brands.
Hall D Highlights
  • Bitchin’ Sauce – Fresh off landing a Starbucks account, the CA-based dip maker’s booth was constantly buzzing with new product offerings.
  • Reliance Vitamin – The NJ-based company highlights a sizeable group of Vitamins, Minerals & Nutritional Supplements contract manufacturing exhibitors, a sector currently seeing strong private equity interest.
  • K-1 Packaging – Leading, multi-substrate packaging supplier headquartered in Southern California.
Hall E Highlights
  • Legendary Foods – Former Quest Nutrition founder’s latest venture capitalizes on snacking trends with protein-packed, nostalgic snacks.
  • Yaxin Flexible Packaging – Family-owned business with offices in Southern California and production facilities across Asia.
Networking and Industry Events:

Beyond the high-energy trade show floor, Expo West 2025 offered vibrant networking opportunities with companies hosting well-attended networking and post-show events. Special thanks to Sheppard Mullin and HCVT for an evening filled with good company and energetic laughter.

For more information or questions, please contact our team:

Andrew Suen, Managing Director: asuen@hexagoncapitalalliance.com

Johnny Sherwood, Director: jsherwood@hexagoncapitalalliance.com

Market Monitor: Outdoor & Recreation

Market Monitor: Outdoor & Recreation

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2024 Outdoor & Recreation Market

Market Growth & Increased Participation

2024 was a pivotal year for the Outdoor and Recreation industry, with participation rates rising 4.1% year-over-year, reaching 57.3% of the U.S. population. This surge fueled higher spending on outdoor products, strengthening the market’s recovery.

Inventory Challenges & Strategic Management

Despite growth, inventory overstocking from previous years posed challenges for some segments. However, businesses adopted more efficient inventory management strategies, improving gross margins and financial performance across the sector.

M&A Rebound & Strategic Transactions

For the first time in two years, M&A activity increased, with strategic buyers driving 71% of deals. Privately held companies led acquisitions, while public buyers focused on internal restructuring. However, with inventory pressures easing, public strategic buyers are re-entering the M&A space, as seen in Kontoor’s $900 million acquisition of Helly Hansen.

Resilient Valuations & Strong Brand Equity

Companies with strong brand equity and high gross margins maintained resilient valuations. The Sporting Goods segment saw increased buyer interest, reflecting expanding market opportunities and growth potential.

Tariffs & Competitive Advantage

A key industry concern is potential tariffs, which could increase production costs and lead to higher retail prices and weaker consumer demand. However, businesses with strong margins and agile operations may capitalize on this shift to gain market share.

2025 Outlook: Continued Growth & Momentum

The industry is poised for sustained expansion in 2025, driven by:

  1. Higher participation rates
  2. Improved inventory management
  3. Rising M&A activity   

With positive long-term trends and strategic business shifts, the Outdoor & Recreation market is set for a healthy and active year ahead.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: randerson@hexagoncapitalalliance.com

Tyler Dale, Managing Director: tdale@hexagoncapitalalliance.com

Johnny Sherwood, Director: jsherwood@hexagoncapitalalliance.com

Brennan Anderson, Vice President: [email protected]

 

Market Monitor: Online Retail

Market Monitor: Online Retail

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Market Monitor: Online Retail

Making the right decisions for your business starts with having the most accurate and current information available. Our Online Retail Market Monitor keeps you up to date on the events, trends, and market forces that shape and guide the industry.

U.S. Online Holiday Sales See Strong Growth with 8.7% YoY Increase in 2024

U.S. online holiday sales surged by 8.7% year-over-year (YoY) in 2024, marking the largest growth since 2020. This increase was driven by consumer demand for higher-ticket items, such as sporting goods, appliances, and electronics, with the availability of substantial discounts throughout the shopping season.

Key Holiday Shopping Stats for 2024

  • Mobile Shopping Dominates: Around 55% of purchases during the 2024 holiday season were made via smartphones, underscoring the growing importance of mobile commerce.
  • Top-Selling Categories: Electronics, apparel, and furniture & home goods together accounted for over half of the holiday sales, with each category seeing YoY growth between 7%-10%.
  • Personalized Shopping Experiences: The use of artificial intelligence (AI) and algorithms significantly increased in 2024. Retailers created hyper-personalized shopping experiences, similar to how streaming platforms recommend content. This shift resulted in higher customer satisfaction and loyalty, with 52% of consumers preferring personalized offers based on their data.

M&A Activity and Future Outlook

Mergers and acquisitions (M&A) activity remained steady from 2023 to 2024, with just under 100 deals reported annually. However, as we move into 2025, M&A activity is expected to rise due to a more favorable regulatory environment, increased investor confidence, and hundreds of billions of dollars in uncommitted capital.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: [email protected]

Tyler Dale, Managing Director: [email protected]

Johnny Sherwood, Director: [email protected]

 

Market Monitor: Personal Care

Market Monitor: Personal Care

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Market Monitor: Personal Care

Strong Rebound and Growing Opportunities

After a slower 2023, U.S. Personal Care M&A activity rebounded sharply in 2024, with 55 closed transactions, marking a 49% increase over the previous year. A significant portion of these deals was driven by private equity, signaling positive trends for the broader M&A market. Looking ahead, the outlook for 2025 remains strong, driven by several key factors.

Strong Growth in Beauty Care Transactions

  • Beauty Care: Transactions in the beauty care sector nearly doubled in 2024, reflecting the sector’s resilience.
  • Market Drivers: The easing of inflation and declining interest rates are benefiting the consumer discretionary sector.
  • Notable Deals:
    • Helen of Troy’s acquisition of Olive & June (nail care brand).
    • TSG Consumer’s investment in Summer Fridays (premium skincare brand).

Increase in Vitamins, Minerals & Nutritional Supplements M&A

  • Growing Market: M&A activity in the vitamins, minerals, and nutritional supplements sector increased in 2024.
  • Consumer Trends: 75% of American adults now regularly use dietary supplements, according to a recent survey.
  • Private Equity Activity: Notable private equity-backed add-on acquisitions of contract manufacturers, including:
    • Somafina (Heartwood Partners) acquiring UST.
    • Impetus Wellness Group (AEA Investors) acquiring Reliance Vitamin Company.

Factors Driving a Strong M&A Market in 2025

Hexagon Capital Alliance identifies several factors contributing to a favorable M&A environment for 2025:

  • Post-Election Certainty: Greater political and economic clarity.
  • Easing Regulatory Scrutiny: Potential for looser regulatory oversight in the financial sector.
  • Private Equity Capital: Record levels of available private equity dry powder.
  • Strong Balance Sheets: Strategic buyers are in a strong position to make acquisitions.
  • Improving Interest Rates: A more favorable interest rate environment.

Positioning for Success in 2025 M&A

  • Preparation is Key: Companies that prepare early for M&A in 2025 will be best positioned to attract buyers and secure favorable valuations.
  • Strategic Advantage: Early market entry will help businesses stand out in an increasingly competitive market.

How Hexagon Can Help

Hexagon Capital Alliance specializes in M&A advisory for the personal care sector. We help businesses:

  • Prepare for Sale: Position your company to attract the right buyers.
  • Raise Capital: Assist in securing the necessary capital for growth.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: randerson@hexagoncapitalalliance.com

Johnny Sherwood, Director: jsherwood@hexagoncapitalalliance.com

Brennan Anderson, Vice President: [email protected]