Market Monitor: Outdoor & Recreation

Market Monitor: Outdoor & Recreation

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Outdoor & Recreation Market Outlook
(2025–2026)

  • The Outdoor & Recreation market experienced a year of stabilization and gradual recovery in 2025, despite mid-year turmoil caused by tariff implementations.
  • Companies made meaningful progress in reducing elevated inventory levels built up during the pandemic-driven surge in demand.
  • More disciplined promotional activity, tighter purchasing strategies and supply chain improvements were key drivers of inventory normalization and gross margin expansion.
Consumer Demand and Participation
  • Outdoor participation remained a major demand driver, with more than 181 million Americans engaging in outdoor activities (compared to 175 million in 2024, ~3–4% increase).
  • Despite a more cautious retail environment, sustained participation levels continue to support investment in the sector.
  • Consumer demand remained stable, with premium brands, especially those with strong direct-to-consumer channels, benefiting from:
    • Increased focus on health and wellness
    • Greater spending on experiences
    • Continued interest in outdoor activities
M&A Activity
  • M&A activity across the sector increased modestly as financing conditions improved.
  • Greater operational visibility encouraged strategic acquisitions focused on:
    • Product line expansion
    • Entry into adjacent markets
    • Enhancement of distribution channels
2026 Outlook
  • As the market enters early 2026, the sector continues to benefit from resilient consumer demand.
  • At the same time, geopolitical uncertainty and evolving trade policies remain important areas of focus.
  • Companies with strong margins, diversified supply chains and flexible cost structures are best positioned to manage these pressures and capitalize on long-term consumer interest.
How Hexagon Can Help?

Hexagon’s M&A team has experience in the outdoor & recreation 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: randerson@hexagoncapitalalliance.com

Tyler Dale, Managing Director: tdale@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

The Apparel, Accessories & Footwear M&A Market Monitor provides a data-driven overview of merger and acquisition activity, buyer behavior, private equity trends, and market conditions shaping the sector in 2025 and the outlook for 2026.

 

M&A activity in 2025 faced headwinds related to tariff uncertainty and broader economic pressures. Despite these challenges, strategic buyers and financial sponsors continued to demonstrate sustained interest in the sector. Market indicators suggest a potential increase in transaction activity in 2026 as financing conditions improve and investor appetite strengthens.

 

2025 Industry Observations
  • M&A activity moderated amid tariff uncertainty and macroeconomic pressures
  • Strategic buyers and financial sponsors maintained active interest in acquisition opportunities
  • Private equity groups increasingly prioritized add-on acquisitions, rising approximately 33.3% year over year
  • Sponsors remain well positioned to deploy capital, supported by available dry powder
2026 Market Outlook
  • Sector rotation is contributing to improved public market valuations
  • Private equity add-on activity is expected to remain supported by available capital
  • Declining interest rates may improve acquisition financing conditions
  • Consumer spending trends may support revenue stability and growth
  • Strategic buyers may reprioritize acquisitions after navigating tariff impacts
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

Brennan Anderson, Senior Vice President: banderson@hexagoncapitalalliance.com

Market Monitor: Healthcare

Market Monitor: Healthcare

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Market Monitor: Healthcare

M&A Volume Declines Year-over-Year

  • Through July 2025, there were 311 U.S. healthcare services M&A transactions, a 23.8% decrease compared to the same period in 2024.

  • Despite the overall slowdown, two segments stood out:

    • Home Health & Hospice – benefitting from Medicare Advantage growth and CMS tailwinds related to coverage and reimbursement increases.

    • Veterinary Services – continues to attract investors as the sector faces less regulatory scrutiny than other provider roll-ups.

Valuation Multiples Remain Strong

  • Median EV/EBITDA multiples for publicly traded healthcare services companies rose from 12.3x to 13.2x since the start of 2025.

  • This increase underscores sustained investor appetite for the healthcare sector, even amid reduced transaction volume.

Signs of a Rebound Ahead

The healthcare services sector remains relatively insulated from consumer spending shifts. Several M&A catalysts are expected to drive activity in the second half of 2025:

  • Accelerated adoption of innovative care technologies

  • A more stable interest rate environment

  • Supportive market fundamentals

  • Abundant dry powder from private equity and strategic buyers

If you have any questions, please contact our Healthcare Services team:

Paul Kacik, Managing Director: pkacik@hexagoncapitalalliance.com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Market Monitor: Flavors & Fragrances

Market Monitor: FLAvors & fragrances

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

The Allure of Flavors & Fragrances

Flavors & Fragrances companies are captivating strategic acquirers and private equity investors due to their loyal customer bases, enticing gross margins, and abundant growth prospects.

The Power of Flavors & Fragrances

Despite their minimal share in product costs, Flavors & Fragrances significantly influence consumer choices, resulting in high switching costs and formidable barriers to entry.

Key Attributes Driving Premium Valuations

Hexagon Capital Alliance has identified pivotal characteristics that attract interest and elevate valuations:

  1. Robust R&D Function: Technical expertise and a proficient team of certified flavorists drive innovation and product differentiation.

  2. Thriving End-Markets and Formats: Focus on high-growth segments like sports nutrition and better-for-you snacks, with expertise in sought-after formats such as functional gummies and RTD beverages.

  3. Appealing Gross Margins: Premium, tailored flavors command strong margins, bolstered by the inertia of high switching costs.

  4. Experience with Emerging Brands: Adaptability and agility to meet the evolving needs and swift market entry demands of emerging brands.

  5. Embracing Natural & Organic Trends: Predominantly featuring a portfolio of natural and/or organic flavors to align with the flourishing clean label movement.

  6. Robust Backlog: Proactive sales pipeline coupled with a surge in sample requests, underpinned by a stellar conversion track record.

  7. Manufacturing Capabilities: Versatile liquid and powder manufacturing capabilities, including spray drying, with ample capacity to facilitate expansion.

Embracing these attributes not only attracts interest but also enables Flavors & Fragrances companies to command premium valuations 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

Brennan Anderson, Vice President: [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.

  • In Q4 2023, U.S. healthcare services Mergers & Acquisitions (“M&A”) volume reached 183 transactions, with a total of 740 closed deals in 2023, representing a 24.4% decrease from 2022. In 2024, there is anticipation for increased M&A activity driven by private equity investors needing to offload assets and deploy capital. The average holding period among U.S. and Canadian private equity funds spiked to 7.1 years in 2023, the longest in 20+ years, paired with a record-high dry powder of nearly $1 trillion.
  • Further, with the Federal Reserve signaling the possibility of three rate decreases in 2024, that will hopefully loosen up the debt markets and drive additional activity.
  • As healthcare organizations have navigated the various challenge in today’s environment, those that have been able to differentiate and traverse the landscape are positioning themselves as prime acquisition candidates for both strategic and financial buyers.
  • In 2024, we see payer and patient pressure continue to drive the shift of care to outpatient settings as organizations continue to bend the cost curve and provide care in the lowest cost setting, and more organizations adopt technologies that create greater efficiencies.

For more information or questions, please contact our contributors:

Paul Kacik, Managing Director: pkacik@hexagoncapitalalliance.com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Daren Oddenino, Director: [email protected]