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: 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: 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]