Distribution M&A Pulse – Q2 2025

DISTRIBUTION M&A MARKET DYNAMICS

• Globally, 149 Distribution transactions closed in Q2-25. Strategic buyer activity declined meaningfully from Q2-24 as many companies shifted focus toward operational improvements and organic growth instead of pursuing acquisitions amid tariff-related uncertainty. In the U.S., this shift was evident as deal volume dropped from 106 in Q2-24 to 65 in Q2-25, underscoring the near-term impact of macro and policy headwinds.
• Financial buyers’ investment activity remained relatively steady, increasing in the US and only a modest decline in activity globally. Sponsors continued to pursue high-conviction theses and invest selectively in attractive businesses despite the challenging macroeconomic environment. Supporting this resilience, the Industrial Production Index trended upward, indicating that U.S. companies strengthened their core operations and positioned themselves for future growth.
• Although overall deal volume declined, average transaction sizes expanded significantly. The average deal size rose to $275M in Q2-25, compared to $53M in Q2-24, reflecting strong demand for high-quality assets. Notable transactions, such as the $600M KCG–Foundation Building Materials merger, emphasized ongoing appetite for companies with durable cashflows and strategic positions in desirable sectors.(1)

Sources: (1) Capital IQ, PMCF proprietary data