Market Monitor: Outdoor & Recreation
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Market Monitor: Outdoor & Recreation
Stabilization in Outdoor Recreation Valuations
Valuations in the Outdoor Recreation industry have remained flat compared to the previous year, reflecting a stabilization in market conditions following the surge in interest driven by the pandemic.
Increase in M&A Activity in Outdoor Recreation
Mergers and Acquisitions (M&A) activity in the Outdoor Recreation space has increased significantly through YTD August 2024. The number of transactions has already surpassed the total for 2023. Out of the 46 transactions completed up to August 2024, 36 involved strategic acquirers, while 10 were financial buyers. This uptick in M&A activity demonstrates private equity’s sustained interest in the sector, despite the higher interest rate environment.
Trends in Consumer Preferences
New outdoor enthusiasts and casual consumers are showing a preference for less technical, lower-priced outdoor products. Data reveals that many individuals who were introduced to outdoor activities during the pandemic continue to engage with these activities and maintain a strong interest in outdoor recreation.
Focus on Smaller Acquisitions and Strategic Adjustments
Private equity groups have shifted their focus towards smaller add-on acquisitions rather than larger platform deals. Concurrently, strategic buyers, facing a post-pandemic slowdown, are reassessing their internal operations and concentrating on core business areas. Companies that have adeptly navigated the current economic landscape and managed their inventories effectively are now showing renewed interest in growth through M&A.
Outlook: Health, Wellness, and M&A Opportunities
The ongoing emphasis on health, wellness, and outdoor activities is expected to drive future M&A and consolidation in the Outdoor Recreation sector. Looking ahead to 2025, with potential interest rate cuts and the U.S. election behind us, the industry is anticipated to experience a robust M&A market fueled by pent-up demand and renewed investment interest.
For more information or questions, please contact our contributors:
Rich Anderson, Managing Director: randerson@
Tyler Dale, Managing Director: tdale@hexagoncapitalalliance.
Johnny Sherwood, Director: jsherwood@
Brennan Anderson, Vice President: [email protected]