Warehousing & Fulfillment M&A Update – December 2025

Technology and Network Investments Uphold Warehousing & Fulfillment M&A Despite Trade-Based Headwinds

Economic headwinds and market uncertainty stemming from the shifting international trade environment have weighed on the Warehousing & Fulfillment sector, dampening merger and acquisition (M&A) growth through year-to-date (YTD) 2025. Tariff policy adjustments in 1H25 led to inventory frontloading as businesses attempted to avoid higher duties. This practice temporarily boosted warehouse utilization, with last 12-month (LTM) inventory levels peaking in February 2025, according to the November 2025 Logistics Mangers’ Index report.¹ Inventory levels have since declined as end market demand across much of the economy has cooled. Industrial output and warehouse demand will likely remain pressured as strains to the financial health and spending power of consumers continues accelerating. Notably, Black Friday retail sales grew 4.1% year-over-year (YOY), but consumers purchased 2% fewer items YOY while average sales prices accelerated 7%, according to reports from Mastercard (NYSE:MA) SpendingPulse and Salesforce (NYSE:CRM).^2,3 Despite these mounting financial pressures, consumer e-commerce spending has continued to represent an increasing portion of total retail sales. As a result, sector participants have accelerated investments in long-term e-commerce-oriented growth initiatives. Warehousing and fulfillment providers investing in artificial intelligence (AI) for technology-enabled capabilities, operational efficiencies, and high-touch customer services are expected to outperform competitors with outdated operations, favoring companies with the resources to invest in technology. Combined with significant sector fragmentation and sector consolidators continuing to optimize their footprints, Warehousing & Fulfillment M&A market activity should accelerate when the end-demand environment improves.

The Warehousing & Fulfillment space is massively fragmented and ripe for accelerated consolidation as technology and nationwide networks become increasingly important to compete. Deal activity has slowed with broader economic headwinds, but it will likely reaccelerate when growth around the goods part of the economy strengthens.

Gordon MackayManaging Director, Capstone Partners

E-Commerce Growth Spurs Innovation and Investment in Reverse Logistics Segment 

Years of e-commerce sales growth has propelled sector participants’ efforts to invest in and innovate reverse logistics operations. Over the past 10 years, e-commerce retail sales have expanded 274.8% to $304.2 billion as of Q2 2025, according to the U.S. Census Bureau.⁴ Consumer preferences for convenient shopping experiences with lower prices and wider selections have supported this historical trend, with sales in this channel notching an additional 5.3% YOY increase in Q2. Despite recent deceleration in e-commerce retail growth rates, the channel is expected to continue representing an increasing proportion of total retail sales.

The ongoing expansion of online sales has led to a corresponding increase in the volume of returns, providing strong demand for reverse logistics services. On average, roughly one-third of e-commerce orders are returned, according to GXO’s (NYSE:GXO) Q2 2025 earnings transcript.⁵ The rapid rise of e-commerce return volume has pushed retailers to outsource costly and inefficient reverse logistics operations. As a result, warehousing and fulfillment providers have ramped up investments overhauling reverse logistics operations—a trend that will likely persist as participants look to leverage the segment’s increased demand as a revenue driver and strategic growth engine.

Investments in AI, automation, warehouse robotics, and inventory visibility tools have enabled sector participants to meet the demanding return expectations of consumers while limiting the high costs and inefficiencies associated with reverse logistics operations. Demand for free/low-cost returns, flexible return policies, and low maintenance return processes have had a direct impact on online shopping decisions. Notably, 82% of consumers identified free returns as an important consideration when shopping online, with 57% unwilling to make additional purchases with a retailer after being charged for an online return, according to a 2025 National Retail Federation report.⁶ This deciding consumer preference has increasingly weighed on retailers’ margins. After initiating a return, 72% of consumers were told to instead keep an online order by retailers looking to avoid the expensive, labor-intensive reverse logistics process, according to a 2024 Blue Yonder survey report.⁷ Up to 20 vendors—including carriers and warehouses—may touch a product when processing online returns, creating major bottlenecks within the reverse logistics supply chain, according to the National Retail Federation.⁸ To address this problem, fulfillment leader GXO has started adapting its existing inbound-focused AI-enabled proactive replenishment inventory visibility tools for backend reverse logistics operations. GXO will use the retrofitted technology to reduce the number of touches required to process a return. These AI investments have driven economies of scale and operational efficiencies in GXO’s reverse logistics operations, which have grown to represent over 10% of its current pipeline, according to the Q2 2025 earnings transcript. As reverse logistics demand rises, Capstone expects warehousing and fulfillment providers to continue accelerating organic and inorganic strategies to bolster capabilities in the space.

M&A has been a viable option for many sector participants looking to bolster service offerings, network coverage, and operational efficiencies associated with e-commerce-driven reverse logistics processes. Of note, Doddle Parcel Services, a subsidiary of supply chain technology provider Blue Yonder, acquired the remaining 51% stake of Inmar Post-Purchase Solutions (IPPS) for an undisclosed sum (June 2025). The acquired business, previously a joint venture between Doddle and Inmar, was renamed Blue Yonder Reverse Retail Operations after closing. The acquisition strengthens Doddle’s existing returns drop-off network with the unit’s easy-return partnerships with Kohl’s (NYSE:KSS) and FedEx (NYSE:FDX). The deal also enhances Blue Yonder’s returns management offering with its low-cost, package- and label-free returns solutions—key features of its FedEx Easy Returns partnership, which is slated for future expansion. Blue Yonder continued its inorganic reverse logistics expansion in August 2025 with the acquisition of reverse logistics technology provider Optoro (undisclosed). Blue Yonder identified Optoro’s advanced returns processing technologies as key rationale behind the deal, extending the company’s existing returns management offering into a comprehensive solution covering the entire return lifecycle. Reverse logistics providers with technology-enabled capabilities, strong existing customer relationships, and broad geographic network coverage are anticipated to continue generating outsized M&A interest.

Excess Warehouse Capacity and Shifting Tariff Landscape Constrain Warehousing & Fulfillment M&A Growth  

Warehousing & Fulfillment M&A market growth has been limited in YTD 2025 as excess capacity headwinds have persisted and trade policy shifts have hindered deal flow. To date, sector M&A has increased by two deals YOY to 45 transactions announced or closed. While M&A has been supported by the continued expansion of e-commerce demand, many sector participants have delayed acquisitions and prioritized adjusting internal operations to mitigate the impacts of the dynamic tariff landscape. Moreover, transaction activity has remained constrained by sector-wide margin pressures as a result of excess warehouse capacity that has lingered following a surge in post-COVID supply chain investments. Many sellers have postponed exit plans in hopes of improved valuation conditions, evidenced by sector M&A EBITDA multiples declining from an average of 15.5x between 2019 and 2021 to 12.4x between 2022 and YTD 2025. Despite headwinds, transaction activity has continued as buyers have looked to expand regional network coverage, broaden service offerings, and bolster technology-enabled operational efficiencies through selective consolidation.

Private equity (PE) M&A activity has inched higher YOY, energized by late 2024 and 2025 interest rate cuts. In YTD 2025, platform formations have risen by two deals YOY to a total of five, while sponsor-backed M&A has increased by one transaction YOY to 14 engagements. PE firms have increasingly targeted scalable businesses operating in recession-resilient end markets or those offering specialized, niche services. These companies tend to generate more stable, recurring revenue streams, allowing sponsors to mitigate broader freight demand weakness while continuing to pursue scalable portfolio opportunities within the sector’s fragmented landscape. Of note, Double Barrel Capital (DBC), a PE firm targeting lower middle market businesses, acquired Envoy Source for an undisclosed sum in September 2025. The Memphis-based third-party logistics (3PL) provider specializes in packaging, fulfillment, and inventory management for Telecommunications industry customers. “Envoy exemplifies the type of business we aim to partner with—durable companies offering mission-critical or everyday services with stable cash flow, predictable demand, and strong earning visibility,” noted Jimmy Berry, Managing Partner of DBC, in a press release.⁹ Expectations for additional interest rate cuts through late 2025 and into 2026 will likely further encourage PE platform formations and consolidation activity in the Warehousing & Fulfillment M&A market.

Public strategic activity in the Warehousing & Fulfillment M&A market has been upheld in YTD 2025 by highly targeted investments in businesses that are poised to benefit from long-term e-commerce growth, expanding regional network coverage, and technology-enabled efficiencies. Public strategic deal flow has gained five deals YOY, totaling eight transactions in YTD 2025. Targets outfitted with AI capabilities or those serving emerging markets like Reverse Logistics have been a key focus to date. While these buyers have remained active, many have still expressed caution amid volatility stemming from the shifting tariff policy environment. “…On the M&A [front], from what I have seen and heard over the last six months, the market is not very strong right now; it’s a couple of transactions that have gone through. But I don’t see a lot of things in the market being of interest to us,” noted Markus BlankaGraff, Kuehne+Nagel (SWX:KNIN) CFO, in the company’s Q2 2025 earnings call.¹⁰ These market conditions have weighed on private strategic M&A activity the most in YTD 2025, with volume down by six deals YOY. While burdened by difficult-to-manage shifts in tariff policies and margin pressure from excess warehouse capacity, certain private buyers have continued to transact. These acquirers have targeted similarly sized businesses that enhance current operations and extend regional network coverage. As warehouse capacity normalizes and sector participants adapt to the new tariff policy environment, strategic warehousing and fulfillment M&A will likely rebound.

Long-Term E-Commerce Growth Strategies Underpin Warehousing & Fulfillment M&A in 2025

Expectations for long-term e-commerce growth have headlined Warehousing & Fulfillment M&A market activity to date. Participants in the space have looked to shore up regional network coverage, service offerings, operational capabilities, and end market customer relationships by pursuing strategic acquisitions of accretive, synergistic targets. Warehousing and fulfillment providers with advanced technology-enabled capabilities have continued to generate outsized interest from buyers. The long-term e-commerce growth outlook is expected to continue supporting strategically selective transaction activity in the space for the foreseeable future. Several notable e-commerce-focused transactions in the Warehousing & Fulfillment M&A market are outlined below.

• Handled Commerce to Acquire Hook Logistics (July 2025, Undisclosed) – In July 2025, fulfillment and logistics platform Handled Commerce announced its acquisition of Hook Logistics. Terms of the transaction were not disclosed. Hook Logistics operates as a 3PL provider, specializing in business-to-business (B2B), e-commerce, and retail fulfillment services. The deal expands Handled’s operational footprint with bi-coastal U.S. facilities and logistics staff, key to its strategy focused on building a scalable national fulfillment network that provides high-touch services. “Hook has built a reputation for responsiveness, precision, and care in both e-commerce and B2B retail fulfillment. By combining their operational excellence with our team’s background in e-commerce shipping and software, we’re creating a new kind of 3PL. It’s one that has been purpose-built from day one to meet the expectations of modern brands,” noted Check Atkinson, Handled Commerce CEO, in a press release.¹¹
• Stord Acquires Ware2Go (May 2025, Undisclosed) – In May 2025, commerce enablement software and omnichannel fulfillment provider, Stord, acquired Ware2Go from UPS (NYSE:UPS) for an undisclosed sum. The former UPS subsidiary provides asset-light direct-to-consumer (DTC) and B2B fulfillment services to customers in a variety of markets including Beverages, Skin Care, Supplements, and Electronics. The deal expands Stord’s existing 11-facility footprint in North America with an additional 21 fulfillment centers stretching across 2.5 million square feet, according to a press release.¹² The acquisition comes on the heels of Stord’s May 2025 fundraising round, during which the company secured $200 million of combined growth debt and Series E equity funds for a post-money valuation of $1.5 billion. While the broader Transportation & Logistics (T&L) industry has seen a pullback in equity financing activity, Stord’s innovative dual software and physical logistics offering and strong organic growth—with revenues up 10x since 2021—has continued to attract new capital investments, according to a press release.¹³ Stord plans to use the funds to bolster its organic growth through AI and infrastructure investments as well as strategic acquisitions like its most recent purchase of U.K.-based Penny Black Technology (July 2025, undisclosed).

“Even with macro uncertainty, e-commerce end consumers still expect rapid delivery, perfect order accuracy, [and] easy returns…This acquisition of Ware2Go is a strategic investment that expands our U.S. domestic footprint and capabilities while strengthening our partnership with UPS. This partnership will allow us to deploy our technology across the Ware2Go network, enhance offerings for our joint customers, and combine our scale to be one of the largest fulfillment networks in North America,” noted Sean Henry, Stord CEO, in the press release.

• DHL Supply Chain Acquires Integrated Distribution Services (May 2025, $61.1 Million) – DHL (XTRA:DHL) subsidiary, DHL Supply Chain, acquired Integrated Distribution Services (Dba. IDS Fulfillment) in May 2025 for an enterprise value of ~$61.1 million. IDS Fulfillment provides e-commerce fulfillment and retail distribution solutions. The deal bolsters DHL’s North American presence with more than 1.3 million square feet of warehousing and distribution space at facilities strategically located across Utah, Georgia, and Indiana, according to a press release.¹⁴ DHL cited enhanced e-commerce fulfillment capabilities in the U.S. and expanded access to small- and medium-sized business customers as key deal motivation. The deal represents DHL Supply Chain’s second e-commerce deal in 2025, following its acquisition of Inmar Supply Chain Solutions’ Reverse Logistics unit (January 2025, ~$50.6 million), which had previously made the acquirer the largest returns operator in North America. “With global e-commerce set to grow at a CAGR [compound annual growth rate] of 8% per annum by 2029, DHL is targeting investments that further expand our capabilities to meet the needs of this growing segment and make our network and solutions easily accessible to businesses of all sizes. IDS Fulfillment complements our existing DHL Fulfillment Network, enhancing our ability to offer seamless global e-commerce solutions with local expertise and reach. Especially timely as more multi-national organizations are looking to establish fulfilment capabilities in North America,” noted Oscar de Bok, Global CEO of DHL Supply Chain, in the press release.

Warehousing & Fulfillment M&A market activity is slated to accelerate should trade policy continue to settle and excess warehouse capacity moderate. Sector acquirers will likely continue turning to M&A to shore up operations and capitalize on growing outsourcing demand from retailers seeking help navigating the increasingly complex supply chain environment. As a result, targets that bolster regional network coverage, broaden end market service capabilities and offerings, and provide technology-enabled efficiencies are expected to draw substantial M&A interest into 2026.

To discuss how AI can improve warehouse and fulfillment operations, provide an update on your business, or learn about Capstone’s wide range of advisory services and Warehousing & Fulfilment M&A market knowledge, please contact us.

Izzy Jack, Associate, was the lead Market Intelligence contributor to this article.

Endnotes

1. Logistics Managers’ Index, “November 2025 Logistics Managers’ Index,” https://www.the-lmi.com/november-2025-logistics-managers-index.html#, accessed December 9, 2025.

2. Mastercard SpendingPulse, “Mastercard SpendingPulse: U.S. Black Friday retail sales up +4.1% year over year as holiday momentum builds,” https://www.mastercard.com/us/en/news-and-trends/press/2025/november/mastercard-spendingpulse–us-black-friday-retail-sales-up–4-1–.html, accessed December 9, 2025.

3. Salesforce, “Step into retail success with Cyber Week insights,” https://www.salesforce.com/retail/peak-holiday/?d=cta-body-promo-1018, accessed December 9, 2025.

4. U.S. Census Bureau, “Quarterly Retail E-Commerce Sales,” https://www.census.gov/retail/ecommerce.html, accessed October 30, 2025.

5. GXO, “Second Quarter 2025 Results,” https://investors.gxo.com/static-files/236bf151-21d8-4769-9065-9571171c4aa4, accessed October 30, 2025.

6. National Retail Federation, “2025 Retail Returns Landscape,” https://nrf.com/research/2025-retail-returns-landscape, accessed October 30, 2025.

7. Blue Yonder, “Blue Yonder Consumer Retail Returns Survey: Tighter Returns Policies Threaten U.S. Consumer Spending,” https://blueyonder.com/media/2024/blue-yonder-consumer-retail-returns-survey-tighter-returns-policies-threaten-us-consumer-spending, accessed October 30, 2025.

8. National Retail Federation, “Build Reverse Momentum with Innovative Technologies,” https://nrfrev.nrf.com/expo/expo-overview, accessed October 30, 2025.

9. PR Newswire, “Double Barrel Capital Announces the Initial Closure of its Inaugural Fund and the Majority Recapitalization of Envoy Source, LLC,” https://www.prnewswire.com/news-releases/double-barrel-capital-announces-the-initial-closure-of-its-inaugural-fund-and-the-majority-recapitalization-of-envoy-source-llc-302560948.html, accessed October 30, 2025.

10. Yahoo Finance, “KUEHNE+NAGEL INT N (KNIN.SW) Q2 FY2025 Earnings Call Transcript,” https://finance.yahoo.com/quote/KNIN.SW/earnings/KNIN.SW-Q2-2025-earnings_call-310053.html, accessed October 30, 2025.

11. Newswire, “Handled Commerce Acquires Hook Logistics to Launch Scalable, Brand-Centric 3PL Fulfillment Solution,” https://www.newswire.com/news/handled-commerce-acquires-hook-logistics-to-launch-scalable-brand-22615894, accessed October 30, 2025.

12. Stord, “Stord Expands Market-Leading E-Commerce Platform with Acquisition of Ware2Go from UPS,” https://www.stord.com/newsroom/stord-acquires-ware2go-from-ups, accessed October 30, 2025.

13. Stord, “Stord Raises $200M+ at a $1.5B Valuation to Power Fast, Seamless E-Commerce Experiences at Scale,” https://www.stord.com/newsroom/stord-raises-$200-million-for-fast-seamless-ecommerce-experiences, accessed October 30, 2025.

14. DHL, “DHL Supply Chain Strengthens its Offering to Small and Midsize Companies with Acquisition of E-Commerce and Retail Logistics Specialist IDS Fulfillment,” https://group.dhl.com/en/media-relations/press-releases/2025/dhl-supply-chain-acquires-ids-fulfillment.html, accessed October 30, 2025.