Beyond the Catalog
The market is selective, not uniformly weak: US deal count is down 9.9% year to date through September, but the picture changes once you separate business models, transaction sizes and buyer objectives. Sponsors still account for roughly half of transactions, headline pricing is differentiated rather than moving as one, and structure remains part of the economic outcome. For distributors, the September deals show that buyers pay attention to customer relationships, product expertise and strategic fit, not just the catalog.
Highlights from the report:
- Selective, not uniformly weak: September recorded 1,226 US transactions (preliminary), and year-to-date count is down 9.9% to 13,696. August’s count has already been revised up 12.2% since our last edition, so the direction of the series matters more than the latest bar.
- Both sponsors and strategics remain active: Sponsors accounted for 51.9% of transactions through September, versus 51.2% a year earlier. US-based PE funds held $1.21 trillion of dry powder at September 30, which gives context to sponsor participation but does not by itself establish willingness to pay.
- Valuation is differentiated, so benchmark by size and business model: GF Data’s Q2 average eased to 7.0x from 7.3x, largely on composition. Meanwhile the $1M–$25M segment strengthened to 6.1x from 5.7x, and broad distribution averaged 6.0x against 6.9x in 2025.
- Structure is part of the outcome: Earnouts, seller financing or both appeared in 53.5% of GF Data’s first-half transactions, up from 48.9% in 2025. An earnout makes proceeds contingent on future performance, while seller financing creates credit exposure to the buyer, so certainty, timing and post-close risk belong in the same conversation as the multiple.
- Strategic fit shows up in customer reach and product expertise: DSG’s acquisition of American Fasteners extends its MRO customer base in South Florida and its reach into Latin American and Caribbean export markets. Blue River acted as exclusive M&A Advisor to Lawson Products and Distribution Solutions Group on the transaction.
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