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: Healthcare

Market Monitor: Healthcare

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Market Monitor: Healthcare

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

M&A in Healthcare Services M&A Activity

  • 671 U.S. healthcare services M&A transactions in 2024, marking a 10.4% decrease from 2023.
  • Median EV/EBITDA multiples for publicly traded healthcare services companies rose slightly from 13.3x in 2023 to 13.5x in 2024.
  • eHealth services are increasingly replacing traditional third-party healthcare consultants and staffing companies in the healthcare sector.
  • Decline in the Other Services segment reflects growing competition from tech-enabled healthcare solutions.
  • Despite economic and regulatory scrutiny, healthcare services deal volume remained resilient in 2024.
  • Outlook for 2025: Anticipated factors like interest rate cuts, capital buildup, and a clearer U.S. regulatory environment are expected to drive transaction activity across all healthcare sectors, including eHealth and tech-enabled solutions.

If you have any questions, please contact our contributors:

Paul Kacik, Managing Director: pkacik@hexagoncapitalalliance.com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

 

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]

Market Monitor: Apparel, Accessories & Footwear

Market Monitor: Apparel, Accessories & Footwear

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Market Monitor:
Apparel, Accessories & Footwear

Industry M&A Update

M&A activity in the apparel, accessories, and footwear sectors surged in 2024, with transaction volume doubling from 2023, primarily driven by private equity add-on acquisitions. Strategic buyers also increased their activity in the latter half of the year. As we move into 2025, the market is expected to remain strong, driven by several key factors.

Strong Performance in Footwear and Casual Fashion
  • Footwear: Market capitalization rose by approximately 55% in 2024.
  • Casual Fashion & Retail Brands: Saw a 25% increase in market capitalization.
  • Continued Growth: These sectors are expected to continue driving M&A activity in 2025.
Key Drivers of M&A Activity in 2025

Hexagon sees several factors fueling M&A activity in the coming year:

  • Higher Public Valuations: Strong market performance in footwear and casual apparel.
  • High Levels of Dry Powder: Buyers have significant capital to deploy.
  • CEO Confidence: Increased optimism among CEOs for acquisitions.
  • Lower Interest Rates: Decreased rates will make acquisitions more attractive.
  • Reduced Regulatory Burdens: Easier regulatory environment for transactions.
Preparing for M&A in 205
  • Timing: Companies that prepare early in 2025 will be better positioned to attract buyers and secure favorable valuations.
  • Competitive Advantage: Early preparation will help you stand out in a crowded market.
How Hexagon Can Help?

Hexagon’s M&A team has experience in the apparel, accessories, and footwear sectors. We help businesses:

  • Prepare for Sale: Position your company to attract the right buyers.
  • Raise Capital: Assist with capital-raising efforts.
  • Market Insights: Provide up-to-date M&A market trends.

For more information or questions,  please contact our contributors:

Rich Anderson, Managing Director: [email protected]

Tyler Dale, Managing Director: tdale@hexagoncapitalalliance.com

Johnny Sherwood, Director: jsherwood@hexagoncapitalalliance.com

Brennan Anderson, Vice President: banderson@hexagoncapitalalliance.com

Banker Insights: 2025 Healthcare M&A Activity Outlook

2025 healthcare services
M&A activity outlook

M&A Activity outlook

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What to Expect and How to Prepare

With 2024 now in the rearview mirror, we thought we would reach out to our Healthcare clients and prospects with some thoughts on what to expect in 2025.  To get right to the point, the next 12 months are expected to be very active for Healthcare M&A and Hexagon predicts 2025 will be a strong seller’s market:

Private Equity Demand

Many Private Equity Buyers have been sitting on the sidelines for the last couple of years due to a higher interest rate environment and valuation sticker shock within the healthcare space from 2020-2023. Most of these groups are starting to feel pressure from their investors to deploy the record amount of capital that they have raised but have not yet invested.

Falling Inflation/Interest Rate Cuts

While the country is still in a relatively high inflationary environment, inflation rates have been tapering off compared to recent years and there is an expectation that the Federal Reserve will likely effect modest rate cuts in 2025.  Lower interest rates enable buyers to use cheaper debt in their acquisitions and therefore cause buying activity to increase.

Competition for Deals

With so many Private Equity buyers jumping back into the M&A market, the competition for good quality healthcare deals will be fierce and therefore likely to push valuations up.

Healthcare business owners who have been contemplating a sale or capital raise in 2025 or even early 2026 should start preparing now.  While competition for deals is expected to be high, buyers are placing greater emphasis on due diligence.  Areas such as regulatory compliance, staff retention rates, as well as billing and coding practices are being scrutinized much more thoroughly.  Sellers that are well-prepared for this buyer due diligence, can generally expect to close their deals faster and can in many cases command a premium valuation.

Hexagon’s Healthcare M&A team has helped hundreds of healthcare business owners navigate successful transactions.  Give us a call if you would like to have a confidential discussion pertaining to your company.

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

Making the right decisions for your business starts with having the most accurate and current information available. Our Food & Beverage Market Monitor keeps you up to date on the events, trends, and market forces that shape and guide the industry’s M&A trends.

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

Through November 2024, U.S. Food & Beverage M&A volume has increased by 7% compared to the same period in 2023. A 15% rise in private equity transactions suggests a stronger M&A market overall. 

Snacking Category Sees Growth

With snacking becoming more popular—74% of Americans report snacking daily according to the 2024 IFIC Food & Health Survey—2024 has seen significant deals in this area. Notable acquisitions include PepsiCo’s purchase of Siete Foods for $1.2 billion and Mars’ acquisition of Kellanova for $35.8 billion. cautious approach from acquirers and investors.

Baked Goods Continue to Attract Interest

The baked goods category remains a strong focus for M&A, with private equity firms making several acquisitions in 2024. Examples include:

  • Legacy Bakehouse (Benford Capital Partners) acquiring Angelic Bakehouse
  • Sweetmore Bakeries (Shore Capital) acquiring Sweet Eddie’s
  • Commercial Bakeries (Graham Partners) acquiring Imagine Baking

These deals highlight continued interest in the sector.

Potential Impact of Tariffs and Domestic Sourcing on M&A

While the effects of the incoming Trump administration’s proposed tariff policies and the “Make America Healthy Again” agenda are still uncertain, companies that focus on domestic sourcing, manufacturing, and clean-label products may be better positioned for acquisition.

Looking Ahead: M&A Activity in 2025

Hexagon Capital Alliance expects M&A activity to remain strong in 2025, supported by factors such as a post-election certainty, potential for looser regulatory scrutiny in the financial sector, record levels of private equity dry powder, strong strategic balance sheets, and a steadily improving interest rate environment. Companies looking to attract investors and buyers should consider going to market in Q1 2025.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: randerson@hexagoncapitalalliance.com

Johnny Sherwood, Director: jsherwood@hexagoncapitalalliance.com

Market Monitor: Baked Goods

Market Monitor: Baked Goods

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Market Monitor: Baked Goods

Making the right decisions for your business starts with having the most accurate and current information available. Our Baked Goods Market Monitor keeps you up to date on the events, trends, and market forces that shape and guide the industry’s M&A trends.

Resilience of the Baked Goods Industry: M&A Trends in 2024

A longstanding staple of the American diet, the Baked Goods industry has shown remarkable consistency and resilience in Mergers and Acquisitions (M&A) within the broader Food & Beverage landscape.

A Year of Steady Acquisition Activity

In 2024, strategic acquirers and private equity investors are leveraging M&A to enhance scale, foster innovation, and diversify product offerings. This trend is driven by the need to meet evolving consumer preferences.

Automation and Innovation

Despite robust M&A activity, the industry faces persistent labor challenges and rising commodity prices. Operators with automated production lines and innovative manufacturing techniques stand out as attractive acquisition targets, commanding premium valuations.

European Bakeries Entering the U.S. Market

Large European bakeries are making significant inroads into the U.S. market through M&A initiatives. Key highlights include:

  • Vandemoortele’s acquisition of Banneton Bakery
  • La Lorraine’s joint venture with Bakery de France
Private Equity's Role in the Baked Goods M&A Landscape

Private equity-backed strategic platforms have been particularly active in acquiring Baked Goods businesses this year. Recent acquisitions include:

  • Imagine Baking by Commercial Bakeries (Graham Partners)
  • Kenny’s Great Pies by Dessert Holdings (Bain Capital)
  • Angelic Bakehouse by Legacy Bakehouse (Benford Capital Partners)
Future Outlook for the Baked Goods Industry

Despite a stable M&A environment in early 2024, the Baked Goods industry remains highly fragmented. A recent survey conducted by L.E.K. Consulting revealed that 87% of bakery executives plan to pursue acquisitions this year, with:

  • 58% actively seeking targets
  • 29% opportunistically seeking targets

As we move through 2024, the Baked Goods industry is poised for continued growth through strategic acquisitions, driven by innovation and the need to adapt to market challenges. The ongoing consolidation efforts present significant opportunities for both established players and new entrants in the market.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: randerson@hexagoncapitalalliance.com

Johnny Sherwood, Director: jsherwood@hexagoncapitalalliance.com

Market Monitor: Building Products & Materials

Market Monitor: Building Products & materials

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Highlights:

North American Glass Market: Anticipated Growth Amid Economic Changes

The North American glass market is positioned for remarkable growth in the coming years, particularly following the Federal Reserve’s first interest rate cut since the COVID-19 pandemic. This strategic move, which includes an aggressive 50 basis points reduction, signals a shift in focus towards job growth while recalibrating inflation and unemployment objectives.

Projected Market Growth

Currently valued at over $30 billion, the glass manufacturing market in North America is projected to expand to more than $45 billion by 2030. This growth reflects an increasing demand across various sectors, including residential and commercial applications.

Mergers and Acquisitions in the Glass Industry

Well-capitalized strategic buyers are actively leveraging mergers and acquisitions (M&A) to enhance their offerings, capabilities, and market reach. This trend is expected to accelerate as the market begins to recover, particularly benefiting window and door manufacturers in both residential and commercial sectors.

Economic Easing and Its Impact

The anticipated economic easing cycle is likely to stimulate significant M&A activity within the glass market. As businesses adapt to the changing economic landscape, a rebound in M&A activity is already underway in 2024, setting the stage for robust growth in the industry.

For more information or questions, please contact our contributor:

Andrew Suen, Managing Director: asuen@hexagoncapitalalliance.com