Distribution M&A Pulse – Q4 2025

DISTRIBUTION M&A MARKET DYNAMICS

• Q4 2025 reflected lower transaction volumes alongside sustained strategic engagement. Global distribution M&A activity declined 36% year over year during the quarter, with U.S. volumes exhibiting a similar contraction. This moderation reflected increased buyer discipline rather than diminished interest, as strategic acquirers continued to account for approximately 85% of transactions—underscoring an ongoing focus on consolidation, capability expansion, and long‑term strategic positioning.
• Full‑year 2025 transaction volumes trailed 2024 levels, though demand for high‑quality assets remained resilient. Both global and U.S. deal counts declined year over year, while investor appetite continued to migrate up‑market, with capital increasingly concentrated in larger, scaled transactions. Sponsors and strategic buyers alike demonstrated a preference for well‑positioned platforms operating in sectors supported by durable secular tailwinds, including artificial intelligence, data center infrastructure, electrification, and mission‑critical supply chain assets.
• Industry fundamentals continue to support confidence entering 2026. Structural tailwinds such as customer outsourcing, product complexity, and service-driven supply chains remain intact. Margin durability is being supported by pricing discipline, private-label growth, and value-added services. Furthermore, as inventory levels normalize and companies accelerate investments in digital capabilities and automation, improving balance sheets, productivity gains, and enhanced customer stickiness are reinforcing the strategic case for continued industry consolidation.