{"id":22820,"date":"2023-08-24T10:22:30","date_gmt":"2023-08-24T17:22:30","guid":{"rendered":"https:\/\/firstpagesage.com\/?p=22820"},"modified":"2023-08-24T10:22:30","modified_gmt":"2023-08-24T17:22:30","slug":"distribution-company-ebitda-valuation-multiples","status":"publish","type":"post","link":"https:\/\/redesign.fpsclients.com\/wp\/distribution-company-ebitda-valuation-multiples\/","title":{"rendered":"Distribution Company EBITDA & Valuation Multiples – 2023 Report"},"content":{"rendered":"

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The following report aggregates EBITDA and revenue multiple data pertaining to the sale of private distributors between Q3 2022 – Q3 2023. Our team sourced the data in this report from private equity networks, expert interviews, and proprietary databases. (<\/span>Sources<\/span><\/a>)<\/span><\/p>\n

The tables below show average EBITDA and revenue multiples for distribution companies, broken down by industry subsector as well as EBITDA and revenue range.\u00a0<\/span><\/p>\n

EBITDA Multiples for Distributors, Q3 2023<\/span><\/h3>\n\n\n\n\n\n\n\n\n\n\n\n\n
Company Type<\/b><\/td>\nEBITDA Range<\/b><\/td>\n<\/tr>\n
$1M-3M<\/b><\/td>\n$3-5M<\/b><\/td>\n$5-10M<\/b><\/td>\n<\/tr>\n
Building Materials<\/b><\/td>\n6.9x<\/b><\/td>\n9.8x<\/b><\/td>\n11.1x<\/b><\/td>\n<\/tr>\n
Consumer Goods<\/b><\/td>\n6.6x<\/b><\/td>\n8.9x<\/b><\/td>\n10.8x<\/b><\/td>\n<\/tr>\n
Food Service<\/b><\/td>\n7x<\/b><\/td>\n9.2x<\/b><\/td>\n10.7x<\/b><\/td>\n<\/tr>\n
Importers & Exporters<\/b><\/td>\n6.8x<\/b><\/td>\n8.8x<\/b><\/td>\n10.9x<\/b><\/td>\n<\/tr>\n
Industrial<\/b><\/td>\n6.4x<\/b><\/td>\n9x<\/b><\/td>\n11.3x<\/b><\/td>\n<\/tr>\n
Logistics & Fulfillment<\/b><\/td>\n7.1x<\/b><\/td>\n9.3x<\/b><\/td>\n10.5x<\/b><\/td>\n<\/tr>\n
Medical & Healthcare<\/b><\/td>\n6.9x<\/b><\/td>\n9.8x<\/b><\/td>\n12.5x<\/b><\/td>\n<\/tr>\n
Wholesalers<\/b><\/td>\n7.8x<\/b><\/td>\n10.1x<\/b><\/td>\n13.2x<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Revenue Multiples for Distributors, Q3 2023<\/span><\/h3>\n\n\n\n\n\n\n\n\n\n\n\n\n
Company Type<\/b><\/td>\nRevenue Range<\/b><\/td>\n<\/tr>\n
$1-5M<\/b><\/td>\n$5-10M<\/b><\/td>\n$10-50M<\/b><\/td>\n<\/tr>\n
Building Materials<\/b><\/td>\n2.8x<\/b><\/td>\n3.1x<\/b><\/td>\n3.5x<\/b><\/td>\n<\/tr>\n
Consumer Goods<\/b><\/td>\n2.6x<\/b><\/td>\n2.9x<\/b><\/td>\n3.3x<\/b><\/td>\n<\/tr>\n
Food Service<\/b><\/td>\n3.1x<\/b><\/td>\n3.4x<\/b><\/td>\n3.6x<\/b><\/td>\n<\/tr>\n
Importers & Exporters<\/b><\/td>\n2.9x<\/b><\/td>\n3.2x<\/b><\/td>\n3.6x<\/b><\/td>\n<\/tr>\n
Industrial<\/b><\/td>\n2.8x<\/b><\/td>\n3x<\/b><\/td>\n3.4x<\/b><\/td>\n<\/tr>\n
Logistics & Fulfillment<\/b><\/td>\n3.1x<\/b><\/td>\n3.5x<\/b><\/td>\n3.7x<\/b><\/td>\n<\/tr>\n
Medical & Healthcare<\/b><\/td>\n3.2x<\/b><\/td>\n3.6x<\/b><\/td>\n3.9x<\/b><\/td>\n<\/tr>\n
Wholesalers<\/b><\/td>\n3x<\/b><\/td>\n3.3x<\/b><\/td>\n3.6x<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The following sections detail the state of distribution company M&A moving into 2024, including predictions for the future of the industry.<\/span><\/p>\n

The State of Private Distribution Company M&A<\/b><\/h2>\n

Valuation multiples for distributors fluctuated between 2020-2023 due to macroeconomic turbulence caused by rising interest rates in 2022. However, valuations have seen a rise in multiples over the last year. Our team attributes the rise in valuations to a stabilizing supply chain, which saw marked improvements beginning in Q1 2022.<\/span><\/p>\n

The graph below shows the fluctuation of EBITDA multiples for private distribution companies over the last 3 years:<\/span><\/p>\n

EBITDA Multiples for Private Distribution Companies, H1 2020 – Current<\/span><\/h3>\n

\"\"While multiples are rising across the sector, the overall rate of growth has slowed compared to its pre-pandemic trajectory. Consumer Goods, for example, is nearly flat when compared to Q1 2020; and Import \/ Export multiples are up only about 1% between 2022 and 2023. Valuations for more essential subsectors like Medical and Food Service have seen slightly better growth, but obviously not nearly as much as they did during the pandemic. The only sector that has experienced a more substantial rise in multiples is Industrial, increasing by approximately +.4x over the past year.<\/span><\/p>\n

Viewed over a 5-year period, there has been consistent growth in multiples for distributors, and this has resulted in distinct M&A activity patterns. Notably, over the past year, there have been more carve-outs and divestitures, which we attribute to rising interest rates and a deceleration in growth. This trend is predicted to persist until a full economic recovery\u2014ideally in early next year, but possibly extending into 2025.<\/span><\/p>\n

Our research team has the following predictions about what to expect in 2024:\u00a0<\/span><\/p>\n