Houlihan Lokey’s “Active Lifestyle Market Update“ for the second quarter shows M&A activity in the active lifestyle space has rebounded strongly from a “muted“ 2023, “supported by increasing confidence, renewed financing market activity and a return of mega deals.”

Transaction values among companies in the space soared year-to-date to $4.2 billion through June, compared to only $600 million in the same period a year ago.

“Transaction activity has picked up recently, with 90 active lifestyle transactions closed YTD June 2024, up from 75 YTD June 2023, continuing the momentum starting in Q4 2023 and suggesting that M&A activity levels may have bottomed out,“ said Houlihan Lokey in the report.

Houlihan Lokey said a mix of “premium-positioned brands as well as more value-oriented ones drew attention from buyers in the first half.”

“The active lifestyle industry saw a continued bifurcation in consumer products, with premium and ultra-value goods gaining traction as wealthier consumers exhibit robust spending while others seek to maximize the value of their dollars,“ continued Houlihan Lokey.

Among the notable deals highlighted in the report include:

  • 6/18/2024: Fifty 1 Labs acquires Drago Knives
  • 6/11/2024: Undisclosed investor acquires 2XU
  • 6/10/2024: Pradco Hunting acquires Ani-Logics Outdoors
  • 6/7/2024: New Era acquires ’47
  • 6/5/2024: Authentic Brands Group acquires Champion
  • 6/3/2024: Consortium Brand Partners acquires Outdoor Voices
  • 5/22/2024: Imperial acquires Pukka
  • 5/20/2024: Undisclosed investor acquires Kona
  • 4/30/2024: Daisy acquires bought out Crosman
  • 4/30/2024: PV3 Investments acquires Enve Composites
  • 4/23/2024: JD Sports acquires Hibbett
  • 4/11/2024: Storyteller Overland acquires Taxa Outdoors

The deal volume of $4.2 billion is still below the volumes of $5.9 billion in the first half of 2022 and $9.7 billion in the first half of 2021. Those years were boosted by an increased interest in outdoor activities during the pandemic.

The M&A activity was supported by broader equity markets that have “generally performed well through the first half of 2024,“ with the S&P 500 index up nearly 19 percent and the Dow Jones Industrial Average up more than 10 percent through June year over year.

Among sub-sectors in the active lifestyle space, revenues dipped slightly across softgoods and retail in the second quarter, with powersports and hardgoods increasing slightly over the prior three months. However, over the last twelve months, sales across the sector “remain elevated over 2020 and 2021, supporting the normalization of increased participation rates across the active lifestyle industry. On an LTM basis, softgoods outperformed hardgoods due to a combination of the consumable nature of the offerings in addition to some remaining inventory overhang,“ according to the report.

Houlihan Lokey’s active lifestyle team is led by Alex Grünwald, managing director, global co-head of its Consumer Group, with the company’s U.S. group led by Tim Larsen, managing director, global co-head of the Consumer Group and Nate Pund, managing director.

Image courtesy 2XU