M&A activity snapshot
Consumer M&A shrank again in 2025. Capstone Partners reports consumer industry deals fell 18.9% year over year in 2025, after declines in 2022 and 2023 and modest growth in 2024. Valuations softened with volume: the median purchase multiple weakened to 9.2x EV/EBITDA, almost half a turn lower than 2024's 9.6x, and the third straight year below the 10.5x median for 2016 to 2025.
Tariffs were the main shock. Capstone's middle-market review says the "Liberation Day" tariff announcements forced Q2 transactions to be re-priced, restructured, or abandoned outright.
Activity varies widely by vertical. E-commerce M&A rose 12.8% to 97 transactions in 2025, and branded food deals more than tripled to 31 in early 2026. Restaurant M&A went the other way, down 28.9% to 32 deals in 2025 through late October. In pet, overall deals fell but Services-segment deal flow rose 45% in 2024 as platforms bought grooming and boarding sites.
Consumer demand is still growing in nominal terms. U.S. retail and food services sales were $773.9 billion in August 2026, up 6.0% from a year earlier, while the PCE price index rose 3.4% over the same period, so real growth is thinner. Sentiment is weak: the University of Michigan index stood at 48.1 in September 2026.
Who is buying
Strategic consumer companies. Public strategics pulled back sharply, with a 33.8% drop in public strategic acquisitions in 2025. They still pay the top prices for brands that fill a growth gap, often priced on revenue rather than EBITDA.
Private equity platforms. Sponsors did fewer consumer deals, down 22.9% in 2025, but paid more at the median than strategics. They also hold aging portfolios: 39% of U.S. PE companies had been held more than four years at the end of 2025, which points to more sponsor exits and add-on buying.
Multi-unit franchisees. In franchised restaurants, salons, and pet care, the buyer is often another franchisee in the same system or the franchisor itself. Restaurant Brands International bought Carrols, its largest U.S. Burger King franchisee, at about $1 billion of enterprise value, or 6.6x estimated 2024 EBITDA.
Independent sponsors and search funds. These buyers target single-location and small multi-site businesses below platform size, especially in personal services and specialty retail.
What buyers look for
Capstone's 2025 data is direct about what still earns a premium: strong customer retention, clear competitive moats, pricing power, cash flow generation, and tariff-insulated supply chains, with asset-light operators and businesses tied to non-discretionary purchases prioritized.
In practice that means:
- Recurring visits or purchases. Memberships, prepaid packages, autoship, and repeat cohorts. Med spa buyers, for example, value membership programs, subscription skincare, and repeat injectable visits.
- Unit economics by location. Four-wall profit, new-unit payback, and remodel needs for any multi-site business.
- Channel and customer diversification. No single retailer, marketplace, or franchisor relationship that can reprice the business.
- Supply chain resilience. Country-of-origin exposure and the ability to pass through cost increases.
What makes a strong company
A consumer or retail company that commands a premium typically shows:
- Three or more years of clean, location-level or channel-level financials.
- Revenue that repeats without heavy paid acquisition.
- Gross margins that held through 2025's tariff and cost increases.
- Management that runs operations without the owner.
- Licenses, franchise agreements, leases, and regulatory filings current and transferable.
Valuation and deal structure
The consumer median is a large-deal number. Deals above $250 million in enterprise value made up a record 30.6% of disclosed consumer deals in 2025, which pulls the median up. For smaller companies, GF Data's all-sector benchmarks are closer: $1 million to $5 million deals averaged about 5.5x trailing EBITDA and $5 million to $10 million about 5.6x in H1 2025.
Who buys matters too. Capstone found strategic buyers paid a median 8.6x and PE firms 10.4x in 2025. Within consumer, product brands can sit far above service businesses: Capstone's beauty sector averaged 14.9x EV/EBITDA in 2025 year to date, while Carrols, a restaurant franchisee, sold at 6.6x estimated 2024 EBITDA.
Earnouts and rollover equity are common in consumer deals where growth or margins are still proving out. Med spa deals in 2025, for example, mostly fell between 60% cash at close with 40% rollover and 80% cash with 20% rollover. Franchised businesses add franchisor approval and transfer terms to every deal.
Subindustries
Consumer and retail covers businesses with very different economics. The pages below cover each vertical's buyers, value drivers, regulatory items, and valuation data.