Insights and Outlooks on the Packaging and Industrial M&A Market: A Conversation with Brett Kornblatt

Title: Insights and Outlooks on M&A Activity in the Packaging and Industrial Industries

In a recent conversation with Brett Kornblatt, Managing Director of Industrials-Packaging at Stout, a global advisory firm specializing in corporate finance and transaction advisory, Robert Connolly sheds light on the current state of the M&A market, particularly in the packaging and industrial sectors.

Market Overview:
Kornblatt describes the M&A environment as being in a state of transition. While capital is available, buyers are cautious due to recent performance challenges. The bid-to-ask spread remains, but there is optimism that it is shrinking as buyers seek quality acquisition opportunities.

Deal Activity:
In the packaging sector, deal activity remains muted, with transactions taking longer to close. The slow recovery in performance and risk perceptions have impacted the pace of deals. However, there is hope for increased activity in 2025 as financial performance stabilizes.

Valuations and Pricing:
Valuations in the lower middle market are trending downwards due to increased financing costs and perceived risks. Multiples have reduced compared to previous years, reflecting a more cautious approach from investors.

Financing and Capital Availability:
The financing environment remains supportive, with lenders eager to deploy capital in M&A transactions. Private equity dry powder and debt capital providers are actively seeking opportunities to invest, indicating a favorable financing landscape.

Challenges and Risks:
Company performance remains a significant challenge, with slow and inconsistent growth in the packaging industry. The recovery from the challenges of 2023 is ongoing, with hopes for a more active M&A market in 2025.

Buyer and Seller Dynamics:
Strategic buyers are making a comeback in the market, competing with private equity firms for acquisitions. Seller expectations are gradually aligning with market realities, although some still hold onto pre-pandemic valuation expectations.

Market Outlook:
Key trends impacting the packaging industry include sustainability, inflation, and the importance of packaging in the e-commerce landscape. Companies investing in sustainable practices and enhancing the brand experience through packaging are poised for long-term success.

Overall, the M&A market in the packaging and industrial industries is navigating through challenges but showing signs of resilience and potential growth in the coming years. Stay tuned for more updates on this evolving market.