Automotive Aftermarket M&A Update – October 2023

Sector Outlook Remains Robust as Automotive Aftermarket M&A Activity Continues at Healthy Levels

Capstone’s latest Automotive Aftermarket M&A Update reports that macroeconomic headwinds and the shift to nondiscretionary services have supported robust demand in the sector as consumers aim to service their existing vehicles over purchasing new. These trends are projected to continue through 2024 and drive ample M&A opportunity for leading sector players.

M&A volume in the Automotive Aftermarket sector has moderated year-over-year from the heights seen in year-to-date 2022, but dealmaking is expected to accelerate in the coming quarters and through 2024 as broader M&A markets emerge from a relative trough in dealmaking.

Despite an elevated cost of borrowing, private equity firms have been keen to deploy capital to establish new platforms or add onto existing portfolio companies, and high-quality aftermarket service providers have continued to garner substantial interest from financial buyers, who have accounted for 44.3% of sector transactions year-to-date.

Also included in this report:

• A deep dive on private equity activity in the sector and how tightened lending criteria have affected firms’ investment priorities.
• Examination of key valuation trends and how EBITDA multiples compare across sub-verticals.
• Analysis of recent notable transactions in the space and the key company characteristics in demand with financial and strategic buyers.

Capstone Partners’ Consumer Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the consumer and retail industries. Our team partners with leading mid-to-large sized business in the Automotive Aftermarket that serve growing end-markets. For more information on Automotive Aftermarket M&A trends featured in this report or to speak with one of our Consumer Investment Banking Team members about how to grow, value, and/or sell your company, we are here to help. Contact us today to start a conversation.