M&A Trends
Resilient growth and strategic expansion drove strong Distribution M&A activity in Q3 2025 despite geopolitical headwinds and economic uncertainty.
Market Dynamics
- The Distribution sector posted generally positive results in Q3 2025, with EBITDA multiples rising modestly as supply chain conditions stabilized and reshoring momentum persisted across key end markets.
- Growth was led by the Automotive, Foodservice, and Building Products subsectors, which recorded an average 7.7% increase in EV/EBITDA multiples, supported by easing supply constraints, resilient consumer and aftermarket demand, and continued infrastructure and reconstruction activity despite margin pressures from higher material costs.
- The General & Industrial, Specialty Chemical, Electric, and Healthcare subsectors remained largely stable, with an average multiple appreciation of 0.1%, reflecting steady demand but offsetting headwinds from input cost inflation, tariff effects, and limited near-term catalysts for expansion.
- Overall, the sector is navigating a transitional environment—anchored by long-term structural drivers such as reshoring, automation, and AI-related infrastructure investment—while near-term growth remains constrained by trade frictions, elevated financing costs, and fiscal uncertainty following the federal government shutdown..
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Reach out to Dinan Capital Advisors Managing Director Tom Gerlacher for more report insights.