Deal Activity
Growthink Capital Research tracked 963 closed Merger & Acquisition transactions in July 2024 with U.S. targets, a 10% increase from the 880 deals tracked in June 2024.
This total includes 399 Private Equity or Private Equity-backed acquisitions and 564 Unbacked corporate acquisitions. The distribution of deals continues to be skewed towards corporate acquirers, which represented 59% of the total in June 2024.
Revenue and Earnings Multiples
From the transactions that disclose the valuation as well as revenue and/or EBITDA information, Growthink Capital derived a median revenue multiple of 2.8x and a median EBITDA multiple of 9.4x (excluding negative EBITDA companies).
The median deal size increased from $100 million in June to $132 million last month.
Top Industries and Segments
The top 5 associated industries by number of completed transactions were Commercial Services, Enterprise Software, Commercial Products, Media & Information Services, Distribution & Wholesale.
Fragmentation by vertical remains high, with Manufacturing, SaaS, TMT, Industrials, and AI as top associated verticals.
The Biggest Deal
The largest transaction of the month was Smurfit Kappa Group‘s (DUB: SK3) $11 billion acquisition of WestRock. WestRock, formed by the 2015 merger of RockTenn and MeadWestvaco, is a leading North American producer of corrugated packaging, folding cartons, and paperboard. It is also the largest producer of solid bleached sulfate and the second-largest producer of containerboard, used in shipping containers.
Following the merger, Smurfit Kappa Group, now rebranded as Smurfit WestRock, becomes a global leader in paper-based packaging solutions. Founded in 1934 and headquartered in Dublin, Ireland, the company operates in over 40 countries with more than 100,000 employees, offering a wide range of products, including containerboard, corrugated containers, solid board, graphic board, and bag-in-box solutions. This merger aims to create the world’s leading packaging partner.
Based on WestRock’s latest reported revenue of $19.46 billion and a normalized EBITDA of $2.7 billion, the acquisition reflects a valuation multiple of 0.57x revenue and 4.07x EBITDA. These multiples rise to 1.08x and 7.74x when considering the enterprise value of $20.93 billion, which accounts for over $9 billion in debt as of March 2024.
Growthink Capital’s New Mandates
Growthink Capital is exploring the strategic sale of a U.S.-based resource management SaaS provider for enterprise companies.
The company has $3.1 million in TTM ARR with a current run rate of $3.3M. Its high-retention subscription model is delivering a 20% EBITDA margin. The company is off-market and solely open to opportunistic and strategic scenarios.
If you’re interested in exploring this acquisition opportunity, please reply to this email or call us at (213) 927-3968.
The Oldest and the Newest
There were 6 companies founded in the 1800s that were acquired in July 2024.
Hyster-Yale Group, Inc. (commonly known as “Yale” and originally founded in 1844 as Yale Lock Shop) was acquired by Heffiq, a subsidiary of Pallieter Group, on July 2, 2024, for an undisclosed amount.
Yale, subsidiary of Spanish machinery rental company General de Alquiler de Maquinaria, manufactures a range of industrial trucks, including narrow aisle trucks, pallet trucks, stackers, electric trucks, tow tractors, and internal combustion trucks.
Heffiq, a dealer of forklift and warehouse trucks serving the logistics and warehousing industry, expands its market presence with this acquisition, forming a larger, more competitive group in the warehousing equipment sector.
Meanwhile, 9 companies founded, created, or spun off in 2023 achieved exits last month.
Axalta Coating Systems (NYS: AXTA) acquired CoverFlexx Group, a subsidiary of Transtar Holding, for $295 million on July 2, 2024. This acquisition strengthens Axalta’s position in the Refinish coatings market.
CoverFlexx manufactures and sells automotive, aviation, industrial, and marine paint and detailing products, offering a comprehensive range of paints, primers, protective coatings, and detailing solutions.
Transtar Holding spun off CoverFlexx last year to concentrate on its core business in transmission units, rebuild kits, remanufactured torque converters, valve bodies, and other automotive components.
Axalta, a publicly listed company, operates in the Performance Coatings and Mobility Coatings segments, providing high-performance coatings systems.
With CoverFlexx’s last reported revenue at $78 million, the acquisition reflects an estimated Valuation/Revenue multiple of 3.78x.
Growthink Capital’s Transaction of the Month
DecisionPoint Systems Inc., an enterprise mobility systems integrator, was acquired by Barcoding on July 5, 2024, in a public-to-private LBO valued at approximately $78.42 million. The deal was backed by financial sponsors Graham Partners and SOSV. This acquisition strengthens Barcoding’s position as a solutions-focused integrator, enhancing its capabilities in enterprise mobility, IoT/RFID, and POS technologies.
DecisionPoint provides mobile computing and wireless systems for use within company facilities, offering mobile computers, application software, and data capture equipment such as barcode scanners and RFID readers. Its solutions serve industries including merchandising, sales and delivery, field service, logistics, transportation, and warehouse management.
Barcoding Inc., which was acquired by Graham Partners in an LBO in September 2023, specializes in supply chain automation and innovation, helping organizations become more efficient, accurate, and connected. The company’s offerings include RFID and software development, supply chain architecture, analytics, and enterprise mobility management.
With reported revenue of $114.2 million and EBITDA of $5.84 million as of March 2024, the acquisition reflects an estimated 13.4x Valuation/EBITDA multiple.
To explore M&A alternatives for your business – whether that be pursuing a sale of the company, liquidity for shareholders, or growth-by-acquisition opportunities – please get in touch by completing this form or calling us at (213) 927-3968.
Securities transactions are conducted through GT Securities, Inc. Member FINRA/SIPC. Nothing in this article should be regarded as an offer to sell or a solicitation of an offer to buy any Investment.
