Stout's 2026 PPA Study Reveals Decline in Non-Bargain-Purchase Transactions Amid Rise in Contingent Consideration
The Stout 2026 Purchase Price Allocation (PPA) Study found a decline in non-bargain-purchase transactions reported by public companies, with 725 such deals recorded in 2025 compared to 800 the previous year—a drop of about 9%. The study also noted an increase in contingent consideration as both its prevalence and share of deal value rose. Contingent consideration accounted for 23.7% of transactions, up from 22.3%, and represented on average 20.3% of enterprise value compared to 17.4% the prior year. Sector-specific trends varied significantly: while Information Technology saw an increase in both deal count and median transaction size, Consumer Discretionary experienced fewer but larger deals. Goodwill as a percentage of enterprise value also increased across several sectors including Energy, Health Care, Industrials, IT, and Materials. The study highlights the growing complexity associated with contingent consideration arrangements and their impact on valuation and accounting practices. Stout analyzed 22,953 SEC filings to produce benchmarks for purchase price allocations over a five-year period ending December 31, 2025. These insights aim to help professionals better understand deal structures and value allocation in the context of industry-specific trends.
Topics: contingent consideration purchase price allocation sector differences transaction volume