State of M&A in the Packaging Segment: Recap and Forecast

As we near the end of a year that was healthy overall for mergers and acquisitions in the printing industry, it’s a good moment to assess what drove the activity in 2025 and what’s likely to carry the momentum forward into 2026.

The industry’s two principal segments — packaging and commercial printing — have different financial parameters. But the macroeconomic trends underpinning them are the same, and those forces remain encouraging for buyers and sellers alike.

Especially reassuring is the fact that the pace of M&As is coming back up to what it was in the early years of the present decade. 2021 and 2022 were record breakers in terms of transactions completed; as M&A advisers, we were never busier. Although not quite as hyperactive, 2023 was a blockbuster in its own right.

Then came the slowdown of 2024 — not because of any shortage of buyers, but because many sellers had decided to hold off going to market.

They pushed the pause button partly out of uncertainty surrounding the presidential election and its implications for business and the economy. The other drag on their plans was a slowdown for the industry as a whole, with real sales growth of -2.1% during the first half of 2024, followed by a -1.1% decline in the third quarter.

We can report that the pace has picked up again in 2025, so much so that in the remainder of the year and into 2026, we expect activity to look more like it did in 2023 than it did in 2024.

It’s All Good

Consider the general trends. Banks and other financial institutions remain willing to lend capital for funding M&As. Interest rates are stable (and possibly will have come down by the time this article is published). The multiples of publicly held printing and packaging companies continue to be strong.

But the best reason for optimism may be that new buyers — particularly private equity (PE) investors — are still coming into the industry. In fact, more buyers are active out there than ever before.

PE-funded financial buyers have ample capital to spend on aggregating multiple companies into business platforms that they resell after optimizing profit performance. Strategic buyers with excess capacity to fill know that the best way to do this is usually by acquiring the sales volume of other companies. In both cases, value is created for shareholders, customers, and other stakeholders.

What it all means is that now is a very favorable time to be a seller or a buyer. There has been no slowdown of interest in financially healthy, well differentiated companies in either the printing or the packaging space. The only question is how long the present set of circumstances will last.

To guess at that, we have to look at the relationship between the growth rate of the printing industry and that of the gross domestic product (GDP).

It used to be that they moved in parallel: When growth in GDP increased, so did growth in industry revenues. But as last year’s negative growth trends for the industry make clear, that connection is no longer unbreakable. What’s more, GDP growth has declined from 5.9% in 2021 to a forecasted 1.7% in 2025 — a trend that doesn’t augur positively for growth in any industry.

Spur to Action

Packaging has bucked the trend with a rate of growth exceeding that of GDP, and for that reason, its multiples continue to be attractive. Nevertheless, the big picture strongly suggests that those who have made definite plans to buy or sell should begin carrying them out now, while things are still generally aligned in support of dealmaking.

It isn’t just about growth trends. Even the best-run printing and packaging companies are part of one of the most highly fragmented industries in the U.S. economy, and fragmented industries inevitably consolidate.

With consolidation also taking place on the customer side and operating costs increasing, the window of opportunity for organic growth does not stay open forever. Increasingly, growth through a well-timed, carefully executed acquisition is the correct response to these business realities.

It’s easy to see these dynamics at work in the packaging segment, where many of the industry’s most noteworthy M&A transactions continue to be made. Rollups of label companies have been happening at such a fast clip that the pool of companies available to acquire is shrinking.

Competition for them has driven pricing to a level that would have seemed crazy not all that long ago. At this rate, we may see rollups selling to other rollups — that’s how intense the demand has become.

Deluged with Offers

A label and flexible packaging client of ours got a taste of this when we marketed the business to a mix of financial and strategic buyers. The owner got more than 20 expressions of interest with offers that included especially attractive valuations.

One reason buyers make offers like that is the increased purchasing power they will be able to exercise by folding the seller’s orders for substrates and other consumables into theirs. It certainly worked to the advantage of our client, whose company was acquired by a much larger business.

Something else that makes packaging companies so attractive to buyers is their stickiness. Customers who do business with them tend to stay with them. Nobody wants to disrupt a reliable supply of relatively inexpensive labels that will be affixed to products costing much more. For example, of our client’s top 10 accounts, six have been buying from the company for 30 years. This kind of stickiness applies to all forms of packaging.

‘Have’ a Plan and Stick to It

Customer loyalty contributes to the packaging industry’s reputation for being recession-proof. But, the thing that sets the most successful of these businesses apart is their reputation for being “haves” — firms that have invested in the technology they need to make their operations future-proof as well. Have-nots, the opposite in terms of forward-looking strategic planning, become natural acquisition targets for the haves.

The soundest piece of advice we can offer owners as 2025 winds down is to commit to a decision to sell the business or to grow it by acquiring another company. Action on the decision does not have to be taken right away, but the choice of direction should be clear. One of the main driving forces of the industry today is the dynamism of the M&As taking place within it. That in itself is a profit opportunity for owners who know what their next steps can be.