The first half of 2019 saw a continuation of robust M&A activity in the Health & Wellness Industry, as strategic acquirers have rapidly pursued inorganic growth strategies to position themselves more competitively in today’s saturated market. SDR tracked 67 transactions involving businesses participating in and serving the Health & Wellness sector. Most notably, the Natural & Organic Foods, Health & Fitness, and Vitamins, Minerals, & Supplements segments led the pack with 15 recorded transactions each including several noteworthy deals closed so far this year. The Personal Care segment also continues to experience significant acquirer interest, with 12 deals recorded in 2019, including the largest transaction in the industry year to date – JAB Cosmetics’ acquisition of an additional 20% stake in Coty for $1.7 billion in cash.
Strategic buyers and sponsor-backed platforms continue to dominate the M&A landscape in the Health & Wellness sector, accounting for three quarters of all activity so far this year. Although new sponsors are now increasingly seeking platform acquisitions from which to grow, as demonstrated by Swander Pace Capital’s investment in Bragg Live Food Products and TSG Consumer Partners’ acquisition of CorePower Yoga, industry participants continue to outpace pure funds in their pursuit of attractive targets.
The average EBITDA multiple for publicly traded Health & Wellness companies by the end of the first half of 2019 held steady since the end of 2018 at 12.5x LTM EBITDA. The Activewear segment traded at the highest average multiple of all segments at 15.2x EBITDA and the Vitamins, Minerals, & Supplements segment traded at the lowest multiple of 9.2x.