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MAY 2015

Investment Banking

Food and Beverage


Industry Snapshot
Food and Beverage Industry Highlights

LTM MARCH 2015 M&A VOLUME BY SECTOR

Whats a food and beverage owner/operator to do?


If our current comparable company F&B universe is to be
believed, average revenue growth remains moderate relative to
inflation at 4.4% in 2014 and ~4.1% for 2015. Customers are
pushing for price cuts like never before due (in large part) to
weak volume conditions while continuing to demand that their
supplier base keep their foot on the innovation accelerator (read:
spend more on new product and packaging R&D). Perhaps the
one bright spot is that for most companies, commodities remain
in a deflationary environment. Except beef prices, of course;
cattle prices have set records five years in a row due to 18
straight years of smaller calf crops.

Beverages
18%

Foodservice
Distribution
10%
Retail
11%

Protein
13%
Source: Capital IQ and SRR research

QUARTERLY U.S. M&A DEAL VOLUME AND VALUE


18.0x

100
Volume

terrorism, etc. there are no signs of trouble on the horizon.

16.0x

108

105
85

101
14.0x

12.0x

75

10.0x

50

10.0x

8.9x

0.0x

13.4x 13.4x

$30

$10

4.0x
Q2

Q3

Q4

Q1

Q2

Q3

2.0x

2012

Q4

Q1

Q2

2013

Q3

Q4

2014

0.0x Financial

Q1

11.5x 11.5x
10.0x

10.3x

8.9x

9.2x

12.8x

10.3x

10.3x

9.7x

2015

'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13

Value

8.9x

15.4x

13.1x

10.0x

10.3x

9.2x

11.6x 11.7x

Baked /
Snack Foods

14.2x

13.9x
12.8x

12.2x

13.8x 13.8x

13.4x 13.4x

10.0x 9.9x

14.0x

11.6x 11.7x

12.1x
11.3x

15.4x

8.5x

9.7x

13.7x

9.0x
7.7x

12.2x

4.9x

9.7x

10.4x

10.2x
9.4x

13.5x
12.8x

7.4x 7.6x

12.1x
11.3x 6.2x
5.9x

5.4x

9.7x

10.2x

7.7x

4.9x

7.0x

7.5x

10.3x

8.4x 8.2x

7.7x

7.2x

11.6x

6.5x

5.7x 5.6x

10.4x

10.2x

9.4x

9.0x

8.5x

Packaged /
Manufactured
Food

7.4x 7.2x

7.0x

5.9x

5.4x

6.2x

7.5x

8.4x 8.2x

7.8x

7.2x

6.5x

5.7x 5.6x

Baked /
Snack Foods

Dairy

Beverages

Protein

Ingredients /
Flavorings

Retail

Foodservice
Distribution

'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM

2.0x

Packaged /
Manufactured

Baked /
Snack Foods

Dairy

Beverages

Protein

Ingredients /
Flavorings

Retail

Foodservice
Distribution
Source: Capital IQ and SRR research

Nick P. Jachim
+1.312.752.3396
njachim@srr.com

Gian G. Ricco
+1.312.752.3359
gricco@srr.com

Timothy F. Cummins
+1.312.752.3305
tcummins@srr.com

9.7x

$0

15.4x

14.1x
13.1x

10.0x

10.0x 9.9x

13.7x

4.0x

6.0x

0.0x

10.3x

13.0x

9.4x

2.0x

12.8x

11.5x 11.5x

6.0x9.9x

8.0x

4.0x

12.8x

8.0x

12.0x

9.9x

9.2x

13

13.4x 13.4x

10.0x 9.9x
8.9x

Q1

12.8x

'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM
'09
'10
'11
'12
'13
'14
LTM

14.0x

13.0x

13.8x

11.5x 11.5x

9.4x

$40

10.3x

Packaged /
Manufactured
Food
15.4x

8.9x

$50

Source: Capital IQ and SRR research

13.7x

10.0x

9.9x

$60

$20

Strategic

16.0x

12.0x

9.4x

8.9x

ENTERPRISE
VALUE / EBITDA
18.0x

16.0x

106

6.0x

Protein
13%

12.8x

110

13.7x

8.0x

Beverages

14.0x

13.0x
101

12.8x

25

18%it is also hard to imagine multiples


by the same token
will improve from current levels, at least materially.

18.0x

113
100

86

87

84

109

Value ($ billions)

125

Packaged /
Manufactured
How much longer this seller-favorable environment will continue
Food
9% is unknown. Absent exogenous threats such as natural disasters,

Retail
11%

Ingredients /
Flavorings
22%

Packaged /
Manufactured
Food
9%

Lacking solid organic top-line growth prospects, one of the few


levers left is M&A. And this demand for growth via acquisition,
combined with a continued lack of quality potential targets, low
borrowing Dairy
costs, and competition from non-strategic buyers
Baked /
8%
Ingredients /
(e.g.
pushed multiples in many subsectors
Snack
Foodsprivate equity), has
Flavorings
9%
of the food and beverage22%
industry to new highs.

Foodservice
However,
Distribution
10%

Dairy
8%

Baked /
Snack Foods
9%

Marcus A. Ewald, CFA


+1.312.752.3346
mewald@srr.com

www.srr.com

Dairy

F&B MEDIAN INDUSTRY REVENUE GROWTH

Page 2

F&B MEDIAN INDUSTRY REVENUE GROWTH

12.0%

10.0%

10.0%

8.9%

8.9%

8.0%

7.1%

6.0%

4.4%

4.0%
2.0%

0.7%

0.0%

2009

2010

2011

2012

Revenue Growth

Profit Margins n n n
Gross margins in 2014 fell slightly as is typical in a
deflationary commodity environment; this is in contrast to
2013, when manufacturers were largely able to support
prices to their customers in spite of flat to falling input
prices. However, the reduction in fixed SG&A costs more
than offset compressions in gross margins, and actually
led to a slight expansion in margins at the EBITDA level.

2014

Source: Capital IQ and SRR research

F&B MEDIAN GROSS PROFIT & EBITDA MARGIN

F&B MEDIAN GROSS PROFIT & EBITDA MARGIN

30.0%
F&B MEDIAN
GROSS PROFIT
& EBITDA27.4%
MARGIN
27.4%
25.0%

28.2%

27.8%

27.7%

27.4%

20.0%

30.0%

15.0%

25.0%

10.0%

27.4%
10.4%

20.0%
5.0%
15.0%
0.0%
10.0%

2009
10.4%

11.7%

11.7%

2010

2011

11.7%

11.7%

EV / EBITDA

Transaction Multiple n n n

20.0x
2009

11.5%

11.7%

2012

2013

2014

10.8%

2011

EBITDA Margin

8.2x

2012
12.6x

9.7x

8.9x

5.0x

EV / EBITDA

10.0x

0.40x

200 9 201 0 201 1 201 2 201 3 201 4


EV / EB ITDA

8.7x

8.5x

1.20x
0.80x

U.S. F&B MEDIAN TRANSACTION MULTIPLE

15.0x

1.60x
2013

8.2x

9.7x

0.00x1.60x

12.6x
EV / Sa les

8.9x

5.0x
0.0x

2014

Gross Profit Margin

F&B10.0x
MEDIAN TRANSACTION MULTIPLE

20.0x0.0x

11.7%

Source: Capital IQ and SRR research

2010
8.5x

11.5%

Gross Profit Margin

15.0x

8.7x

27.4%

10.8%

U.S. F&B MEDIAN TRANSACTION MULTIPLE

0.0%

28.2%

27.8%

27.7%

27.4%

EBITDA Margin

5.0%

The impact of a lack of high quality companies for sale


combined with accommodative credit markets has
finally shown itself in the publicly reported M&A multiple
statistics. The median multiple paid by acquirers was up
materially in 2014 vs. last year. However, it is our view
that valuation multiples are actually near all time highs for
those targets with even the most marginal of buyer appeal.
We base this view on our own first-hand knowledge and
non-public intelligence of multiples paid, and (as seen on
the previous page) the valuations seen for comparable
companies in the public equity markets.

2013

1.20x
0.80x
0.40x

200 9 201 0 201 1 201 2 201 3 201 4


EV / EB ITDA

EV / Sales

After rebounding from lows seen post-recession, overall


food and beverage industry revenue growth continued to
decelerate in 2014. Part of this slowdown can be attributed
to a recent relatively tame commodity environment
(combined with a strengthening dollar which hurts many
multi-nationals), but it also reflects normalized to soft
volumes across most of the industry with only a few
exceptions (e.g. gluten-free, craft beer).

EV / Sales

Revenue Growth n n n

0.00x

EV / Sa les
Source: Capital IQ and SRR research

Recent Trends and Transactions by Food & Beverage Sector


Packaged / Manufactured Food
n

Natural, organic and gluten-free foods will likely continue to be


areas of new product focus.
The largest food transaction in history was announced when
Heinz (backed by BRK and 3G Capital) publicly stated its intent
to acquire Kraft; the deal values KRFT around 15x forward
EBITDA.
A somewhat surprising move was POSTs acquisition of lowerpriced cereal manufacturer MOM Brands as POST (known
for Fruity Pebbles and Honeycomb) along with K and GIS has
struggled recently with shifts towards lower-carbohydrate
breakfasts that can be consumed on the go.

Baked / Snack Foods


n

Similar to Packaged / Manufactured Food, producers need


to adapt to changing diets (healthy, gluten-free) and food
preferences (blurring of eating occasions) to spur growth.
Overall industry revenue should grow on average 4%-5%,
with nuts/seeds, yogurt, and granola bars growing faster than
the industry average, and frozen novelties and ice cream
(excluding super-premium) growing slightly slower than the
industry average.
Of particular note was THSs acquisition of Flagstone Foods
from Gryphon Investors; the Flagstone deal positions THS as the
private label leader in the high growth healthy snacks sector.

Dairy
n

The fluid milk industry continues to face challenging trends as


milk volumes have been impacted by beverage substitution,
a decline in birth rates, and weakening cereal consumption; it
does help that average milk prices have eased significantly in
the past, with Class III Milk futures declining 33% YoY.
International deals dominate the sector, with Chinas Bright
Food Group emblematic of that countrys ever growing need to
secure resources for the Chinese market.

Beverages
n

Health consciousness and demand for trending beverages


among consumers are keys to driving growth.
Major soda producers have responded to the near saturation
of the soft drink market by enlarging their product ranges to
include sports and energy drinks, tea and coffee, bottled water,
and newer beverage categories.
Craft beer volume growth (18% in 2014) continues to
outperform overall beer sales.
Investors cheered KOs acquisition of a minority stake in
Monster; the investment aligns the biggest soda maker in the
world with the largest energy drink brand in the U.S.

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Target
Kraft Foods Group, Inc.
(NasdaqGS:KRFT)
MOM Brands Company
Target
American Target
Blanching Co.,
Kraft Foods Group, Inc.
Inc.
(NasdaqGS:KRFT)
Kraft
Foods
Inc.
Annies, Inc. Group,
(NYSE:BNNY)
MOM
Brands Company
(NasdaqGS:KRFT)
So Delicious Dairy Free
MOM Brands Company
American Target
Blanching Co.,
Protenergy
Natural
Inc.
Kraft
Foods
Group, Foods
Inc.
American
Blanching
Co.,
Annies, Inc. (NYSE:BNNY)
(NasdaqGS:KRFT)
Inc.
Specialty
Brands
of
MOM
Brands
Company
Annies,
Inc. (NYSE:BNNY)
So Delicious
Dairy
Free
America, Inc.
So
Delicious
Dairy Free
Truitt
Bros, Inc.
American
Co.,
ProtenergyBlanching
Natural Foods
Inc.
Protenergy Natural Foods
Annies,
(NYSE:BNNY)
SpecialtyInc.
Brands
of
DeMets Candy Company
America,
Inc.
So
Delicious
DairyofFree
Specialty
Brands
Phils
Fresh
Foods,
LLC
Truitt
Bros,
Inc.
America, Inc.
Protenergy
Foods
Truitt Bros, Natural
Inc.
Target
DeMets
Company
SpecialtyCandy
Brands
of
United
Biscuits
(Holdings)
Phils Fresh
LLC
America,
Inc.Foods,
DeMets
Candy
Company
Limited
Truitt
Phils Bros,
FreshInc.
Foods, LLC
Griffins Foods Limited
Target
Target(Holdings)
Sahale
Snacks,
Inc.
United
DeMetsBiscuits
Candy Company
Limited
Phils Fresh
Foods,
LLC
United
Biscuits
(Holdings)
Flagstone
Foods
Griffins Foods Limited
Limited
Griffins Foods
Limited
Target
Baptistas
Bakery,
Sahale Snacks,
Inc.Inc.
United
Sahale Biscuits
Snacks, (Holdings)
Inc.
Van's
International
Limited
Flagstone
Foods Foods,
Inc.
Griffins
Foods
Limited
Flagstone Foods
Canada
Bread
Company
Baptistas
Bakery,
Inc.
Ltd.
Sahale
Snacks,
Inc.Inc.
Baptistas
Bakery,
Charter
Baking
Company,
Van's International Foods,
Inc.
Flagstone
Foods Foods,
Inc.
Van's International
Pineridge
Bakery,
Inc.
Canada Bread
Company
Inc.

Baptistas
Bakery,
Inc.
Ltd.
Canada
Bread
Company
Cloverhill
Pastry-Vend
Charter Baking
Company,
Ltd.
LLC
Van's
International
Foods,
Inc.
Charter Baking Company,
Inc.
Pineridge Bakery, Inc.
Inc.
Canada
Bread
Company
Pineridge
Bakery,
Inc.
Ltd.
Cloverhill Target
Pastry-Vend
Charter
Baking
Company,
LLC Food
Cloverhill
Pastry-Vend
Tnuva
Industries
Inc.
LLC (56.1% Stake)
Ltd.
Pineridge
Bakery,
BRF
S.A., 11
DairyInc.
Target
Division Plants
Cloverhill Target
Pastry-Vend
Australasian
Food Group
Tnuva Food Industries
LLC Ltd.
Pty.
Ltd. (56.1%
Stake)
Tnuva
Industries
Nuova Food
Castelli
SpA
BRF(56.1%
S.A., 11Stake)
Dairy
Ltd.
Division
BRF
S.A.,Plants
11
Dairy
Scotsburn
Co-Operative
Target
Australasian
Division Plants
Services
Ltd.,Food
FluidGroup
Milk
Pty.
Ltd.
Tnuva
Food Industries
Australasian
Food Group
Business
Nuova
Castelli
SpA
Ltd.
(56.1%
Stake)
Pty.
Ltd.
Delta
Egg
Farm,
LLC
BRF
S.A.,
11 Dairy
Nuova
Castelli
SpA
Scotsburn
Co-Operative
Division
Plants
Warrnambool
Cheese And
Services
Ltd.,
FluidGroup
Milk
Scotsburn
Co-Operative
Australasian
Food
Butter
Factory
Company
Business
Services
Fluid Milk
Pty.
Ltd. Ltd.,
Holdings
Limited
Delta Egg
Farm,SpA
LLC
Business
Nuova
Castelli
(ASX:WCB)
Delta EggMilk
Farm,
LLC (P)
Tirumala
Products
Warrnambool
Cheese
And
Scotsburn Co-Operative
Ltd.
Butter Factory
Company
Services
Ltd., Cheese
Fluid
Milk
Warrnambool
And
Holdings
Limited
Business
Butter
Factory
Company
Target
(ASX:WCB)
Delta
EggLimited
Farm, LLC
Holdings
TirumalaBeverage
Milk Products (P)
Monster
(ASX:WCB)
Ltd.
Warrnambool
Cheese And
Corporation,
Tirumala
MilkNon-Energy
Products
(P)
Butter
Assets
Ltd. Factory Company
Target
Holdings
Limited
DSS
Group,
Inc.
(ASX:WCB)
Target
Monster Beverage
Tirumala
All
MarketMilk
Inc.Products
(dba: Vita(P)
Corporation,
Non-Energy
Monster
Beverage
Ltd.
Coco)
(25%
Stake)
Assets
Corporation,
United
SpiritsNon-Energy
Limited
DSS Group, Inc.
Assets
(BSE:532432)
(Additional
Target
DSS
Group, Inc.
26% Stake)
All
Market
Inc. (dba: Vita
Monster
Beverage
Aimia
Foods
(Holdings)
Coco)
(25%Inc.
Stake)
Corporation,
Non-Energy
All
Market
(dba: Vita
Limited
United(25%
Spirits
Limited
Assets
Coco)
Stake)
Ginsber Beer
Company
(BSE:532432)
(Additional
DSS
Group,
Inc.
United
Spirits
Limited
Limited
26% Stake) (Additional
(BSE:532432)
Aimia
Foods
(Holdings)
All
Market
(dba: Vita
Beam,
Inc. Inc.
(NYSE:BEAM)
26%
Stake)
Limited
Coco)
(25% Stake)
Aimia
Foods
(Holdings)
Ginsber
Beer
Company
United
Spirits
Limited
Limited
Limited Brewery
(BSE:532432)
(Additional
Oriental
Co., Ltd.
Ginsber
Beer Company
26%
Stake)
Limited
Beam, Inc. (NYSE:BEAM)
Aimia Foods (Holdings)
Beam, Inc. (NYSE:BEAM)
Limited

Acquirer
H.J. Heinz Holding Corporation
Post Holdings, Inc.
(NYSE:POST)
Acquirer
Nuts Distributors
of America
Acquirer
H.J. Heinz Holding
Corporation
Inc.
H.J.
Heinz
Holding
Corporation
General Mills, Inc. (NYSE:GIS)
Post Holdings, Inc.
The WhiteWave Foods
(NYSE:POST)
Post Holdings, Inc.
Acquirer
Company
(NYSE:WWAV)
Nuts Distributors
of America
(NYSE:POST)
Treehouse
Foods, Inc.
Inc.
H.J.
Holding
NutsHeinz
Distributors
ofCorporation
America
(NYSE:THS)
General Mills, Inc. (NYSE:GIS)
Inc.
B&G
Foods Inc.Inc.
(NYSE:BGS)
Post
Holdings,
General
Mills, Inc.
(NYSE:GIS)
The WhiteWave
Foods
(NYSE:POST)
Company
(NYSE:WWAV)
The
WhiteWave
Foods
Seneca
Foods Corp.
Nuts
Distributors
America
Treehouse
Foods,of
Inc.
Company
(NYSE:WWAV)
(NasdaqGS:SENE.A)
(50%
Inc.
(NYSE:THS)
Treehouse Foods, Inc.
Stake)
General
Mills,
Inc.
(NYSE:GIS)
B&G Foods
Inc.
(NYSE:BGS)
(NYSE:THS)
Yildiz Holding A.S.
The
B&G
Foods Inc.
(NYSE:BGS)
GFAWhiteWave
Brands,
Inc.Foods
Seneca
Foods
Corp.
Company
(NYSE:WWAV)
(NasdaqGS:SENE.A)
Treehouse
Foods,
Inc.(50%
Seneca
Foods
Corp.
Stake)
Acquirer (50%
(NYSE:THS)
(NasdaqGS:SENE.A)
Yildiz
Holding
A.S.
B&G
Foods Inc. (NYSE:BGS)
Stake)
Yildiz
HoldingInc.
A.S.
GFA Brands,
Yildiz
Holding A.S.
Seneca
FoodsInc.
Corp.
GFA Brands,
URC International Co. Ltd.
(NasdaqGS:SENE.A)
Acquirer (50%
Stake)
Acquirer
The
J.Holding
M. Smucker
Yildiz
A.S. Company
(NYSE:SJM)
GFA Brands,
Yildiz
HoldingInc.
A.S.
Treehouse
Foods,
Inc.Ltd.
URC International Co.
(NYSE:THS)
URC International
Co. Ltd.
Acquirer
Snyders-Lance,
Inc.
The
J. M. Smucker
Company
(NasdaqGS:LNCE)
Yildiz
A.S. Company
(NYSE:SJM)
The
J.Holding
M. Smucker
The
Hillshire
Brands
Company
Treehouse Foods, Inc.
(NYSE:SJM)
URC
International
(NYSE:THS)
Treehouse
Foods, Co.
Inc.Ltd.
Grupo
Bimbo, S.A.B.
Snyders-Lance,
Inc. de C.V.
(NYSE:THS)
(BMV:BIMBO
A)
The
J. M. Smucker
Company
(NasdaqGS:LNCE)
Snyders-Lance,
Inc.
The
Hain
Celestial
Group,
Inc.
(NYSE:SJM)
The Hillshire Brands
Company
(NasdaqGS:LNCE)
(NYSE:HAIN)
Treehouse
Foods,
Inc.
The Hillshire Brands Company
ARYZTA
AG (SWX:ARYN)
(NYSE:THS)
Grupo
Bimbo,
S.A.B. de C.V.
Snyders-Lance,
Inc. de C.V.
(BMV:BIMBO
Grupo
Bimbo,A)
S.A.B.
ARYZTA
(SWX:ARYN)
(NasdaqGS:LNCE)
The Hain AG
Celestial
(BMV:BIMBO
A) Group, Inc.
The
Hillshire
Brands
Company
(NYSE:HAIN)
The Hain Celestial Group,
Inc.
ARYZTA AG (SWX:ARYN)
(NYSE:HAIN)
Grupo
Bimbo,
S.A.B. de C.V.
ARYZTA
AG (SWX:ARYN)
(BMV:BIMBO
A)
ARYZTA AGAcquirer
(SWX:ARYN)
The
Hain
Celestial
Group,
Inc.
ARYZTA
AG
(SWX:ARYN)
Bright
Food
(Group)
Co., Ltd.
(NYSE:HAIN)
ARYZTA AG
Parmalat
SpA(SWX:ARYN)
(BIT:PLT)
Acquirer
ARYZTA
AGAcquirer
(SWX:ARYN)
R&R
Ice Cream
PLC
Bright Food (Group) Co., Ltd.
Bright
Food (Group)
Ltd.
Charterhouse
CapitalCo.,
Partners
Parmalat SpA (BIT:PLT)
Parmalat
SpA
(BIT:PLT)
Saputo
Inc.
(TSX:SAP)
Acquirer
R&R Ice Cream PLC
Bright
Food
(Group)
R&R Ice
Cream
PLC Co., Ltd.
Charterhouse
Capital
Cal-Maine
Foods,
Inc. Partners
Parmalat
SpA Capital
(BIT:PLT)
Charterhouse
Partners
(NasdaqGS:CALM)
Saputo Inc. (TSX:SAP)
Saputo Inc. (TSX:SAP)
Saputo
(TSX:SAP)
R&R
IceInc.
Cream
PLC

Cal-Maine Foods,
Inc. Partners
Charterhouse
Capital
(NasdaqGS:CALM)
Cal-Maine
Foods,SA
Inc.
Groupe
Lactalis
Saputo
Inc.
(TSX:SAP)
(NasdaqGS:CALM)
Saputo Inc. (TSX:SAP)
Acquirer
Cal-Maine Foods, Inc.
Groupe
LactalisCompany
SA
(NasdaqGS:CALM)
The
Coca-Cola
Saputo
(TSX:SAP)
(NYSE:KO)
Groupe Inc.
Lactalis
SA
Acquirer
Cott Corporation
(TSX:BCB)
Acquirer
The Coca-Cola Company
Groupe Lactalis
SA
Reignwood
Group
(NYSE:KO)
The
Coca-Cola Company
(NYSE:KO)
Diageo PLC (LSE:DGE)
Cott Corporation (TSX:BCB)
Acquirer
Cott Corporation (TSX:BCB)
Reignwood
Group
The Coca-Cola
Cott
BeveragesCompany
Limited
(NYSE:KO)
Reignwood Group
Diageo PLC (LSE:DGE)
Anheuser-Busch InBev SA/NV
Cott
Corporation
(TSX:BCB)
Diageo
PLC (LSE:DGE)
(ENXTBR:ABI)

Enterprise
Value
$53,739
$1,152
Enterprise
Value
Enterprise
$128
$53,739
Value
$53,739
$821
$1,152
$195
Enterprise
$1,152
$128
Value
$154
$53,739
$128
$821
$155
$1,152
$821
$195
$195
$33
$128
$154
$154
$821
$155
$221
$195
$155
$60
$33
$154
$33
Enterprise

Value
$221
$155
$3,300
$60
$221
$33
$60
$961
Enterprise
Value
Enterprise
$80
$3,300
$221
Value
$60
$3,300
$875
$961
Enterprise
$961
$195
Value
$80
$3,300
$80
$165
$875
$961
$875
$1,376
$195
$80
$195
$61
$165
$875
$165
$340
$1,376
$195
$1,376
$673
$61
$165
$61
$340
$1,376
Enterprise
$340
$673
Value
$61
$673
$1,711
$340
$805
Enterprise
Value
Enterprise
$673
$407
$1,711
Value
$1,711
$517
$805
Enterprise
$805
$56
$407
Value
$1,711
$407
$517
$34
$805
$517
$56
$538
$56
$407

$34
$517
$34
$275
$538
$56
$538
Enterprise
Value
$34
$275
N/A
$538
$275
Enterprise
$1,247
Value
Enterprise
N/A
Value
$275
$664
N/A
$8,550
$1,247
Enterprise
Value
$1,247
$664
N/A
$147
$664
$8,550
$622
$1,247
$8,550

Cott Beverages
Limited
Reignwood
Group
Suntory
Holdings
Limited
Cott Beverages Limited
Anheuser-Busch
InBev SA/NV
Diageo
PLC (LSE:DGE)
(ENXTBR:ABI) InBev SA/NV
Anheuser-Busch
(ENXTBR:ABI)
Suntory Holdings Limited
Cott Beverages Limited
Suntory Holdings Limited

$147
$664
$15,747
$147
$622
$8,550
$5,800
$622

Anheuser-Busch InBev SA/NV


Anheuser-Busch InBev SA/NV
(ENXTBR:ABI)
(ENXTBR:ABI)
Anheuser-Busch InBev SA/NV
Suntory
Holdings Limited
(ENXTBR:ABI)

$622
$5,800
$5,800
$15,747

Oriental Brewery Co., Ltd. Anheuser-Busch InBev SA/NV


(ENXTBR:ABI)

$5,800

Ginsber Beer Company


Oriental Brewery Co., Ltd.
Limited
Oriental Brewery Co., Ltd.
Beam, Inc. (NYSE:BEAM)

$15,747
$147
$15,747

Recent Trends and Transactions by Food & Beverage Sector


Protein
n

Protein prices are a mixed bag; beef prices have eased but
remain at elevated levels; hog prices have come back down to
earth due to alleviated PEDv concerns and rebounding herds.
The highest profile transaction was undoubtably the highly
frothy (and colorful) auction between JBS/PPC and TSN for
Hillshire; this transaction came, as many remember, on the
heels of an acquisition attempt of PF by Hillshire that led to
Hillshire being put in play.

Ingredients / Flavorings
n

Secular growth is being driven by a growing number of


food, beverage and pharma companies that are increasingly
outsourcing ingredients processing and flavorings
development, while focusing on core competencies of sales
and marketing.
In July 2014 ADM announced the acquisition of Wild Flavors
for a very healthy mid-teens multiple of EBITDA. The purchase
price was indicative of ADMs desire to grow in the natural
ingredients market, the strategic fit with ADMs existing
capabilities in the texture market, and lack of customer
overlap.

Retail
n

Food retail has seen a resurgence of deal activity across all of


its subsegments.
Within supermarkets, Albertsons $7 billion acquisition of Safeway
(which was announced in March 2014) finally closed in January.
Within C-Stores, Energy Transfer Partners acquisition of Susser/
Stripes (and its 720 owned stores) gives ETP critical mass for
possible divestment of its retail assets; the October transaction
was the drop down of all 1800+ locations into a single entity.
Not to be left out, specialty retail remains of interest, e.g. Thai
property developer Paces $140 million acquisition of gourmet
food brand Dean & DeLuca in November.

Foodservice Distribution
n

Within distribution, there is the pending $8 billion Sysco / US


Foods transaction and then everything else.
SYYs attempt to buy US Foods was dealt a blow in February
when the FTC along with 11 attorneys general sought to block
the deal.
Outside of the above and off front page of the WSJ, there
has been a noticeable increase in interest amongst produce
distributors (both buyers and sellers) to explore strategic
alternatives.

Close
Date
Annd
Annd
Close
Oct-14
Close
Date
Close
Date
Annd
Date
Sep-14
Annd
Annd
Annd
Aug-14
Annd
Annd
Oct-14
Jun-14
Oct-14
Oct-14
Sep-14
May-14
Sep-14
Sep-14
Aug-14
Mar-14
Aug-14
Aug-14
Jun-14
Jun-14
Jun-14
Close
May-14
May-14
Date
May-14
Annd
Mar-14
Mar-14
Mar-14

Target
Tyson de Mexico, S. de
R.L. de C.V.
Silver Bay Seafoods LLC

Acquirer
Pilgrim's Pride Corporation
(NasdaqGS:PPC)
StarKist Co.

Enterprise
Value
$400
$160

Enterprise
Target
Cermaq ASA
(OB:CEQ)
MC OceanAcquirer
Holdings Limited
$1,726
Enterprise
Value
Target
Acquirer
Enterprise
Value
Target
Acquirer
Tyson
deFoods,
Mexico,
S. (50%
de
Pilgrim's
Corporation
$400
Value
Dailys
Inc.
TriumphPride
Foods,
LLC
$145
Tyson
de Mexico, S. de (NasdaqGS:PPC)
Pilgrim's Pride Corporation
$400
R.L.
de C.V.
Stake)
Tyson
de
Mexico,
S.
de
Pilgrim's
Pride
Corporation
$400
R.L.
de
C.V.
(NasdaqGS:PPC)
Silver
Bay
Seafoods
LLC
StarKist
Co.
$160
The Hillshire
Brands
Tyson Foods, Inc. (NYSE:TSN)
$8,543
R.L.
de
C.V.
(NasdaqGS:PPC)
Silver
Bay Seafoods LLC StarKist Co.
$160
Company
Silver Bay Seafoods LLC StarKist Co.
$160
Cermaq
ASA
(OB:CEQ)
MC
Ocean
Holdings
Limited
$1,726
Quantum
Foods,
LLC
West
Liberty
Foods,
L.L.C.
$12
Cermaq ASA (OB:CEQ)
MC Ocean Holdings Limited
$1,726
Cermaq ASA (OB:CEQ)
MC Ocean Holdings Limited
$1,726
Dailys
Foods,
Inc. Farms
(50%
Triumph
Foods, LLC Inc.
$145
Meridian
Salmon
Cooke Aquaculture
$225
Dailys Foods, Inc. (50%
Triumph Foods, LLC
$145
Stake)
Ltd.
Dailys
Foods, Inc. (50%
Triumph Foods, LLC
$145
Stake)
The
Hillshire
Brands
Inc. (NYSE:TSN)
$8,543
Northern
Beef
Packers, LPTyson
WhiteFoods,
Oak Global
Advisors
$44
Stake)
The
Hillshire
Brands
Tyson
Foods,
Inc.
(NYSE:TSN)
$8,543
Company
The
Hillshire
Brands
Tyson
Foods,
Inc.
(NYSE:TSN)
$8,543
Company
Quantum
Foods, LLC
West Liberty Foods, L.L.C.
$12
Company
Quantum Foods, LLC
West Liberty Foods, L.L.C.
$12
Quantum Foods, LLC
West Liberty Foods, L.L.C.
$12
Enterprise
Meridian Salmon
Cooke Aquaculture
Inc.
$225
TargetFarms
Acquirer
Meridian Salmon Farms
Cooke Aquaculture Inc.
$225
Value
Ltd.
Meridian Salmon Farms
Cooke Aquaculture Inc.
$225
Ltd.
Goodman
Fielder
Ltd. LP White
First Oak
Pacific
Company
Ltd.
$1,731
Northern
Beef
Packers,
Global
Advisors
$44
Ltd.
Northern
Beef Packers, LP White
Oak Global
Advisors
$44
(ASX:GFF)
(SEHK:142);
Wilmar
Northern
Beef Packers, LP White
Oak Global
Advisors
$44
International Limited (SGX:F34)
Dec-14
Orange-Co, LP
Alico Inc. (NasdaqGS:ALCO)
$274
Close
Enterprise
Target
Acquirer
Oct-14
Palm Oil
Sime Darby
Plantation Sdn Bhd Enterprise
$2,000
Close New Britain
Date
Value
Target
Acquirer
Close
Enterprise
Limited (LSE:NBPO)
Date
Value
TargetLtd.
Acquirer Ltd.
Annd
Goodman Fielder
First Pacific Company
$1,731
Date
Value
Oct-14
WILD Flavors
GmbH
Archer-Daniels-Midland
$3,097
Annd
Goodman
Fielder
Ltd.
First
Pacific
Company
Ltd.
$1,731
(ASX:GFF)
(SEHK:142);
Wilmar
Annd
Goodman
Fielder
Ltd.
First
Pacific
Company
Ltd.
$1,731
Company (NYSE:ADM)
(ASX:GFF)
(SEHK:142);
Wilmar(SGX:F34)
International
Limited
(ASX:GFF)
(SEHK:142);
Wilmar
Jul-14
DIANA
S.A.S.
Symrise
AG (XTRA:SY1)
$1,796
International
Limited (SGX:F34)
Dec-14
Orange-Co, LP
Alico
Inc. (NasdaqGS:ALCO)
$274
International
Limited (SGX:F34)
May-14
Performance
Chemicals
&
Balchem
Corp.
$567
Dec-14 New
Orange-Co,
LP Oil
AlicoDarby
Inc. (NasdaqGS:ALCO)
$274
Oct-14
Britain
Palm
Sime
Plantation
Sdn
Bhd
$2,000
Dec-14
Orange-Co,
LP
Alico Darby
Inc. (NasdaqGS:ALCO)
$274
Ingredients
Company
(NasdaqGS:BCPC)
Oct-14 Limited
New
Britain
Palm Oil
Sime
Plantation Sdn Bhd
$2,000
(LSE:NBPO)
Oct-14
New
Britain
Palm
Oil
Sime
Darby
Plantation
Sdn
Bhd
$2,000
Apr-14
Felda
IFFCO,
LLC
Marathon
Petroleum
$40
Limited
(LSE:NBPO)
Oct-14
WILD
Flavors
GmbH
Archer-Daniels-Midland
$3,097
Limited
(LSE:NBPO)
Corporation
(NYSE:MPC)
Oct-14
WILD Flavors GmbH
Archer-Daniels-Midland
$3,097
Company
(NYSE:ADM)
Oct-14
WILD FlavorsLLC
GmbH
Archer-Daniels-Midland
$3,097
Feb-14
CitraSource
Frutarom
USA, Inc.
$8
Company
Jul-14
DIANA S.A.S.
Symrise
AG(NYSE:ADM)
(XTRA:SY1)
$1,796
Company
(NYSE:ADM)
Jan-14
AromorS.A.S.
Flavors &
International
Flavors &
$88
Jul-14
DIANA
Symrise
AG
(XTRA:SY1)
$1,796
May-14
Performance
Chemicals & Balchem
Corp.
$567
Jul-14
DIANA
S.A.S.
Symrise
AG
(XTRA:SY1)
$1,796
Fragrances
Ltd.
Fragrances
Inc.
(NYSE:IFF)
$567
May-14 Ingredients
Performance
Chemicals &(NasdaqGS:BCPC)
Balchem Corp.
Company
May-14
Performance
Chemicals
Balchem
Corp. Foods
$567
Jan-14
Natural Selection
Foods,& (NasdaqGS:BCPC)
The WhiteWave
$604
Ingredients
Apr-14
Felda
IFFCO, Company
LLC
Marathon
Petroleum
$40
Ingredients
Company
(NasdaqGS:BCPC)
LLC IFFCO,
Company Petroleum
(NYSE:WWAV)
Apr-14
Felda
LLC
Marathon
$40
Corporation
(NYSE:MPC)
Apr-14
Felda IFFCO, LLC
Marathon
Petroleum
$40
Corporation
Feb-14
CitraSource LLC
Frutarom
USA,(NYSE:MPC)
Inc.
$8
Corporation
(NYSE:MPC)
Feb-14
CitraSource
LLC
Frutarom
USA,
Inc.
$8
Jan-14
Aromor
Flavors
&
International
Flavors
&
$88
Feb-14
CitraSource
LLC
Frutarom
USA,
Inc.
$8
Jan-14 Fragrances
Aromor Flavors
International
&
$88
Ltd. &
Fragrances
Inc.Flavors
(NYSE:IFF)
Jan-14
Aromor
Flavors
&
International
Flavors
&
$88
Fragrances
Ltd. Foods, The
Fragrances
Inc.Foods
(NYSE:IFF)
Jan-14
Natural
Selection
WhiteWave
$604
Fragrances Ltd.
Fragrances Inc. (NYSE:IFF)
$604
Jan-14 LLC
Natural Selection Foods, Company
The WhiteWave
Foods
(NYSE:WWAV)
Jan-14
Natural
Selection Foods, The
WhiteWave
Foods
$604
LLC
Company
(NYSE:WWAV)
LLC
Company (NYSE:WWAV)
Close
Enterprise
Target
Acquirer
Date
Value
Annd
VPS Convenience Store
GPM Investments, LLC
$60
Group, LLC
Annd
The Pantry, Inc.
Mac's Convenience Stores, LLC
$1,725
(NasdaqGS:PTRY)
Close
Enterprise
Jan-15
Inc. (NYSE:SWY) Albertsons,
LLC
$7,078
Acquirer
Close Safeway Target
Enterprise
Date
Value
TargetInc.
Acquirer
Close
Enterprise
Nov-14
Dean & DeLuca,
Pace Food Retail
Co., Ltd.
$140
Date VPS
Value
Target Store
Acquirer
Annd
Convenience
GPM
Investments,
LLC
$60
Date
Value
Nov-14
Nice Convenience
N Easy Grocery
CrossAmerica
Partners
LP
$65
Annd
VPS
Store
GPM
Investments,
LLC
$60
Group,
LLC
Annd
VPS
Convenience
Store
GPM
Investments,
LLC
$60
Shoppes,
Inc.
(NYSE:CAPL); CST Brands, Inc.
Group,
LLC
Annd
The
Pantry,
Inc.
Mac's Convenience Stores, LLC
$1,725
Group,
LLC
(NYSE:CST)
Annd
The Pantry, Inc.
Mac's Convenience Stores, LLC
$1,725
(NasdaqGS:PTRY)
Annd
The
Pantry, Inc.
Stores, LP
LLC
$1,725
Oct-14
Mid-Atlantic
Convenience Mac's
SusserConvenience
Petroleum Partners
$768
(NasdaqGS:PTRY)
Jan-15
Safeway
Inc. (NYSE:SWY) Albertsons, LLC
$7,078
(NasdaqGS:PTRY)
Stores,
LLC
(NYSE:SUSP)
Jan-15 Dean
Safeway
Inc. (NYSE:SWY)
Albertsons,
LLCCo., Ltd.
$7,078
Nov-14
& DeLuca,
Inc.
Pace
Food Retail
$140
Jan-15
Safeway
Inc.
(NYSE:SWY)
Albertsons,
LLC
$7,078
Nov-14
Dean
& Holdings
DeLuca,
Inc.
Pace
Food
Retail
Co., Ltd.
$140
Aug-14 Nice
Susser
Energy
Transfer
Partners,
$2,450
$65
Nov-14
N Easy
Grocery
CrossAmerica
Partners
LP L.P.
Nov-14
Dean
DeLuca,
Inc.
Pace
Food Retail
Co., Ltd.
$140
Nov-14 Shoppes,
Nice
N&Easy
Grocery
CrossAmerica
Partners
LPInc.
$65
Corporation
(NYSE:ETP) CST
Inc. (NYSE:SUSS)
(NYSE:CAPL);
Brands,
Nov-14
Nice
N Easy
CrossAmerica
Partners
LP Inc.
$65
Shoppes,
Inc.Grocery
(NYSE:CAPL);
CST
Brands,
Aug-14
Vitacost.com,
Inc.
The
Kroger
Co.
(NYSE:KR)
$253
(NYSE:CST)
Shoppes, Inc.
(NYSE:CAPL);
CST
Brands,
Inc.
(NYSE:CST)
(NasdaqGS:VITC)
Oct-14
Mid-Atlantic
Convenience Susser
Petroleum
Partners
LP
$768
(NYSE:CST)
Oct-14
Mid-Atlantic
Convenience (NYSE:SUSP)
Susser
Petroleum
Partners LP
$768
Jul-14
Roundys
SUPERVALU
Inc. (NYSE:SVU)
$65
LLCInc.
Oct-14 Stores,
Mid-Atlantic
Susser Petroleum Partners LP
$768
Stores,
LLC Convenience
(NYSE:RNDY),
18 Rainbow (NYSE:SUSP)
and other retailers
Aug-14
Susser
Energy
Transfer Partners, L.P.
$2,450
Stores,Holdings
LLC
(NYSE:SUSP)
Stores
Aug-14 Corporation
Susser Holdings
Energy Transfer Partners, L.P.
$2,450
(NYSE:SUSS) (NYSE:ETP)
Aug-14
Susser
Holdings
Energy
Transfer Partners, L.P.
$2,450
Corporation
(NYSE:SUSS)
(NYSE:ETP)
Aug-14
Vitacost.com,
Inc.
The
Kroger Co. (NYSE:KR)
$253
Corporation
(NYSE:SUSS)
(NYSE:ETP)
Aug-14 (NasdaqGS:VITC)
Vitacost.com,
Inc.
The Kroger Co. (NYSE:KR)
$253
Aug-14
Vitacost.com,
Inc.
The
Kroger
Co.
(NYSE:KR)
$253
(NasdaqGS:VITC)
Jul-14
Roundys
Inc.
SUPERVALU Inc. (NYSE:SVU)
$65
(NasdaqGS:VITC)
Jul-14
Roundys
Inc.
SUPERVALU
Inc.
(NYSE:SVU)
$65
(NYSE:RNDY),
18 Rainbow and
other retailers
Jul-14
Roundys
Inc.
SUPERVALU
Inc.
(NYSE:SVU)
$65
Close
Enterprise
(NYSE:RNDY),
Rainbow and other retailers
Target18
Acquirer
Stores
(NYSE:RNDY),
18
Rainbow
and
other
retailers
Date
Value
Stores
Stores
Annd
US
Foods
Sysco (NYSE:SYY)
$8,256
Annd
US Foods, 11 Distribution Performance Food Group
$850
Centers
Company
Annd
Associated
Wholesalers,
C&S
Wholesale
Grocers,
Inc.
$170
Close
Enterprise
Target
Acquirer
Close Inc.
Enterprise
Date
Value
Target
Acquirer
Close
Enterprise
Annd
Del Monte Target
Capitol Meat
The Chefs' Warehouse,
Inc.
$217
Date US
Value
Acquirer
Annd
Foods
Sysco (NYSE:SYY)
$8,256
Date
Value
Co.
Inc.
(NasdaqGS:CHEF)
Annd
USFoods,
Foods
Sysco (NYSE:SYY)
$8,256
Annd
US
11 Distribution Performance
Food Group
$850
US
Foods
Sysco
(NYSE:SYY)
$8,256
Annd
Drogheria
&
Alimentari
McCormick
&
Company,
$97
Annd
US Foods, 11 Distribution Company
Performance Food Group
$850
Centers
Annd
US
Performance
Food Group
$850
SpaFoods, 11 Distribution Company
Incorporated (NYSE:MKC)
Centers
Annd
Associated
Wholesalers, C&S
Wholesale Grocers, Inc.
$170
Centers
Company
Jan-15
Clover Mountain
Foods,
LipariWholesale
Foods, LLC
$16
Annd
Associated
Wholesalers,
C&S
Grocers, Inc.
$170
Inc.
Annd
Associated
Wholesalers, C&S Wholesale Grocers, Inc.
$170
LLC
Inc.
Annd
Del
Monte Capitol Meat
The Chefs' Warehouse, Inc.
$217
Inc.
Nov-14
Specialty
Commodities
Archer-Daniels-Midland
$170
Annd
Del
Monte
Capitol
Meat
The
Chefs'
Warehouse,
Inc.
$217
Co.
Inc.
$217
Annd
Del
Meat (NasdaqGS:CHEF)
The
Chefs'(NYSE:ADM)
Warehouse, Inc.
Inc. Monte
Company
Co.
Inc. &Capitol
(NasdaqGS:CHEF)
Annd
Drogheria
Alimentari
McCormick
& Company,
$97
Co.
Inc.Fine
(NasdaqGS:CHEF)
Jul-14
Tonys
Inc.
United
Natural
Foods, Inc.
$195
Annd
Drogheria
& Foods
Alimentari
McCormick
& Company,
$97
Spa
Incorporated
(NYSE:MKC)
$97
Annd
Drogheria & Alimentari
McCormick
&(NYSE:MKC)
Company,
(NasdaqGS:UNFI)
Spa
Incorporated
Jan-15
Clover
Mountain Foods,
Lipari
Foods, LLC
$16
Spa
Incorporated
(NYSE:MKC)
Jan-15 LLC
Clover Mountain Foods,
Lipari Foods, LLC
$16
Jan-15
Clover
Foods,
Lipari Foods, LLC
$16
LLC Mountain
Nov-14
Specialty
Commodities
Archer-Daniels-Midland
$170
LLC
Nov-14 Inc.
Specialty Commodities Company
Archer-Daniels-Midland
$170
(NYSE:ADM)
$170
Nov-14
Specialty
Archer-Daniels-Midland
Inc. FineCommodities
Company
(NYSE:ADM)
Jul-14
Tonys
Foods Inc.
United
Natural
Foods, Inc.
$195
Inc.
Company
(NYSE:ADM)
Jul-14
Tonys Fine Foods Inc.
United Natural
Foods, Inc.
$195
(NasdaqGS:UNFI)
$195
Jul-14
Tonys Fine Foods Inc.
United
Natural
Foods,
Inc.
(NasdaqGS:UNFI)
(NasdaqGS:UNFI)

Jan-15

Clover Mountain Foods, LLC

Lipari Foods, LLC

$16

Nov-14

Specialty Commodities Inc.

Archer-Daniels-Midland Company
(NYSE:ADM)

$170

United Natural Foods, Inc.


(NasdaqGS:UNFI)

$195

TonysTrends
Fine Foods Inc.
Commodity

Jul-14

Page 5

LIVE CATTLE

WHEAT AND SOYBEAN


Corn, WheatCORN,
and Soybean

Corn

Wheat

Soybean

Live Cattle $1.80

$16.00
$ per $pound
per pound

$ per bushel

$20.00

Live Cattle

$12.00
$8.00
$4.00
$0.00

$1.60
$1.80
$1.40
$1.60
$1.20
$1.40
$1.00
$1.20
$0.80
$1.00
$0.60
$0.80
$0.60

Source: Bloomberg

Source: Bloomberg

Milk Class III

MILK CLASS III

LEAN HOGS
Lean Hogs

$0.28

$ per
pound
$ per
pound

$1.40

Lean Hogs

$ per pound
$ per pound

Milk Class III

$1.20

$1.40

$1.00

$1.20

$0.80

$1.00

$0.60

$0.28
$0.24
$0.24
$0.20

$0.20
$0.16
$0.16
$0.12

$0.80

$0.12
$0.08

$0.40
$0.60

$0.08

$0.40
Source: Bloomberg

Source: Bloomberg

Sugar #11

COFFEE

SUGAR #11

Coffee

$0.35
$0.35
$0.30

$3.25

$0.30

$2.75

$ per pound

$0.25

$0.25

$0.20

$0.20

$0.15

$0.15

$0.10

$2.25
$1.75
$1.25

$0.75

$0.10

Source: Bloomberg

Source: Bloomberg

Page 6
Gross Domestic Product (GDP) Growth

8.0%
Annualized Real GDP
Growth

$ per
pound
$ per
pound

Sugar #11

6.0%

Historical

Projected

4.0%
2.0%
0.0%
(2.0%)
(4.0%)

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 P P P

$ per po

$2.25
$1.75
$1.25

Macroeconomic Indicators
$0.75

GROSS DOMESTIC PRODUCT (GDP) GROWTH

2.0%
0.0%
(2.0%)
(4.0%)

Page 6 - Purchasing Managers Index

90

8%

80

8%

70

6%

60

6%

4%

50

4%
2%
0%
2%

0%

55
50
50

45

45

40

40

35
35

6,000
5,000

800

4,000

600

3,000

1,000
400

800
200

Housing Starts

Existing Home Sales

0
600

400
200

2,000
1,000
0

Existing Home Sales

90
80
70
60

50
40
30
20

5,000
4,000
3,000

1,000
0

Source: Bloomberg

CPI & PPI

FEDERAL FUNDS RATE

Federal Funds Rate

Federal Funds Target Rate

6,000

2,000

Housing Starts

Source: Bloomberg

Federal Funds Target Rate

20

100

Source: Bloomberg

1,200

30
30

Federal Funds Rate

30

Housing Statistics

Housing StartsHousing
(000s)Starts (000s)

55
60

110

Unemployment
Consumer Confidence

1,000
Housing Statistics

60
65

40

Unemployment
Consumer Confidence

HOUSING STATISTICS

Page 6 - Purchasing Managers Index

>50 = Expansion

10%

1,200

65
PURCHASING
MANAGERS INDEX

>50
= Expansion
<50
= Contraction
<50 = Contraction

100

10%

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 P P P
2010Q
2011Q
2012Q
2013Q
2014Q 15 16 17
Source: Bloomberg

110

CPI & PPI

2.00%

1.75%
2.00%

18.0%

1.50%
1.75%

15.0%

1.25%

1.50%

12.0%

1.00%

1.25%
0.75%

9.0%

1.00%
0.50%

6.0%

0.25%
0.75%

0.00%

0.50%

3.0%

0.25%

0.0%

0.00%

(3.0%)

Source: Bloomberg

CPI

PPI

Source: Bloomberg

Consumer Confidence

4.0%

12%
12%

Consumer Confidence

6.0%

Projected

Existing Home Sales (000s)

Historical

Existing Home Sales (000s)

Annualized Real GDP


Growth

8.0%

UNEMPLOYMENT & CONSUMER CONFIDENCE


Unemployment
& Consumer
Confidence
Unemployment & Consumer
Confidence

Gross Domestic Product (GDP) Growth

Unemployment
Rate
Unemployment
Rate

Page 6

PUBLIC COMPANIES ANALYSIS: SELECT OPERATING AND MARKET PERFORMANCE PARAMETERS

Ticker
Packaged / Manufactured Food
B&G Foods Inc.
Campbell Soup Company
ConAgra Foods, Inc.
Flowers Foods, Inc.
General Mills, Inc.
The Hershey Company
Hormel Foods Corporation
Kellogg Company
Kraft Foods Group, Inc.
McCormick & Company, Incorporated
The Hain Celestial Group, Inc.
The J. M. Smucker Company
Treehouse Foods, Inc.

BGS
CPB
CAG
FLO
GIS
HSY
HRL
K
KRFT
MKC
HAIN
SJM
THS

Price per
Share at
5/12/2015

Price as
% of 52wk
High

Enterprise
Value

$29.64
45.93
37.68
22.95
56.40
94.37
55.76
63.67
85.03
77.47
59.41
116.46
72.29

85.6%
95.1
98.1
97.2
97.7
84.8
94.5
91.1
93.1
98.4
89.5
98.0
77.8

$2,726.4
18,038.5
24,440.4
5,592.2
44,335.8
22,804.8
14,428.9
29,962.5
59,186.7
11,155.8
6,874.1
16,003.2
4,435.1

29.4%
33.9
19.8
48.0
33.8
45.0
17.1
34.6
25.9
40.6
23.6
36.2
20.6

21.1%
17.9
13.2
11.4
17.9
22.3
11.5
11.6
12.5
16.1
11.6
21.3
11.8

3.14x
2.17
1.39
1.49
2.52
3.05
1.52
2.08
3.25
2.62
2.67
2.92
1.43

14.9x
12.1
10.6
13.1
14.1
13.7
13.2
18.0
26.1
16.2
23.0
13.7
12.0

13.7x
11.8
11.1
12.3
12.5
13.0
12.2
12.1
16.0
15.4
17.4
10.3
10.9

13.1x
11.7
11.1
11.6
12.4
12.1
11.4
11.8
15.3
14.6
15.6
9.1
10.0

5.6x
2.6
3.6
1.8
3.3
1.5
0.2
4.6
4.4
1.9
2.9
1.9
3.8

94.5%
92.4%

$16,003.2
$19,998.8

33.8%
31.4%

13.2%
15.4%

2.52x
2.33x

13.7x
15.4x

12.3x
13.0x

11.8x
12.3x

2.9x
2.9x

69.8%
83.9
81.8
93.6
92.9
91.7
91.4
64.9
99.2
89.4

$8,261.5
1,490.3
53.9
17,256.2
1,921.7
669.3
2,282.7
263.1
80,917.5
2,527.0

27.9%
24.3
49.3
53.0
31.1
15.1
23.1
12.8
37.0
35.5

14.6%
10.1
5.2
11.5
15.4
7.2
15.5
2.8
15.2
10.4

1.44x
1.68
0.41
1.35
2.03
0.77
2.10
0.89
2.43
1.53

9.9x
16.7
7.8
11.8
13.2
10.7
13.5
32.0
15.9
14.8

11.6x
12.4
NA
0.8
12.5
NA
12.6
12.7
15.2
12.8

11.1x
10.8
NA
0.7
NA
NA
NA
8.9
13.9
11.4

3.9x
7.3
1.4
3.0
0.0
1.9
0.0
10.3
3.7
NA

90.4%
85.9%

$2,102.2
$11,564.3

29.5%
30.9%

10.9%
10.8%

1.49x
1.46x

13.4x
14.6x

12.6x
11.3x

11.0x
9.5x

3.0x
3.5x

92.7%
100.0
93.7
91.8
87.1
91.4

$2,548.9
2,480.6
6,188.2
51,022.3
321.4
12,913.8

18.8%
29.1
30.2
47.7
26.4
10.4

2.6%
10.8
9.1
15.7
6.5
10.4

0.28x
0.79
2.17
2.15
2.70
1.46

10.5x
7.4
23.7
13.7
41.9
14.0

7.5x
NA
20.4
13.6
21.0
10.7

6.9x
NA
18.6
12.6
17.1
10.2

3.5x
1.9
2.7
3.4
1.2
1.8

92.2%
92.8%

$4,368.6
$12,579.2

27.7%
27.1%

9.8%
9.2%

1.80x
1.59x

13.8x
18.5x

13.6x
14.6x

12.6x
13.1x

2.3x
2.4x

63.1%
91.2
78.2
95.5
90.4
90.8
94.9
85.5
95.4
90.4

$15,879.8
21,436.8
960.7
163,845.1
187,021.5
129,158.0
22,525.2
69,916.0
72,697.3
200,220.5

38.4%
55.6
33.9
53.9
60.2
70.8
43.8
58.5
30.8
61.2

25.0%
32.7
12.9
18.6
38.6
34.4
29.7
31.2
22.0
27.9

3.36x
8.39
1.49
2.47
3.99
7.61
3.74
4.37
4.11
4.34

13.4x
25.7
11.5
13.3
10.3
22.1
12.6
14.0
18.7
15.6

13.5x
22.0
NA
13.2
10.0
20.0
11.5
19.0
15.6
16.0

12.1x
18.3
NA
12.4
9.4
20.0
10.3
18.0
13.9
15.4

0.5x
0.0
0.2
2.5
2.8
2.8
4.1
3.6
0.5
3.3

90.6%
87.5%

$71,306.7
$88,366.1

54.8%
50.7%

28.8%
27.3%

4.05x
4.39x

13.7x
15.7x

15.6x
15.7x

13.9x
14.4x

2.6x
2.0x

Group Median
Group Mean
Baked / Snack Foods
ARYZTA AG
Diamond Foods, Inc.
Golden Enterprises Inc.
Grupo Bimbo, S.A.B. de C.V.
J&J Snack Foods Corp.
John B Sanfilippo & Son Inc.
Lancaster Colony Corporation
Inventure Foods, Inc.
Mondelez International, Inc.
Snyder's-Lance, Inc.

ARYN
DMND
GLDC
BIMBO A
JJSF
JBSS
LANC
SNAK
MDLZ
LNCE

$66.79
28.30
3.97
2.73
107.47
49.76
89.34
9.16
39.31
29.44

Group Median
Group Mean
Dairy
Dean Foods Company
Fromageries Bel
Glanbia plc
Danone
Lifeway Foods Inc.
Saputo Inc.

DF
FBEL
GL9
BN
LWAY
SAP

$18.29
352.79
18.95
69.85
19.49
28.63

Group Median
Group Mean
Beverages
Keurig Green Mountain, Inc.
Monster Beverage Corporation
National Beverage Corp.
Pepsico, Inc.
Anheuser-Busch InBev SA/NV
SABMiller plc
Constellation Brands Inc.
Diageo plc
Starbucks Corporation
The Coca-Cola Company
Group Median
Group Mean

GMCR
MNST
FIZZ
PEP
ABI
SAB
STZ
DGE
SBUX
KO

$100.26
131.92
21.37
96.20
120.72
54.85
115.68
27.50
49.71
40.69

LTM Margins
Gross
Margin
EBITDA

EV / LTM
Revenue

Valuation Multiples
EV / LTM
EV / 2015E
EBITDA
EBITDA

EV / 2016E
EBITDA

Note: EV = Enterprise value equals market value plus total straight and convertible debt, preferred stock and minority interest, less cash and investments in unconsolidated subsidiaries.
Source: Capital IQ and public filings

Notes:
EV = Enterprise Value equals Market Value plus total straight and convertible debt, preferred stock and minority interest, less cash and investments in unconsolidated subsidiaries.
Source: Capital IQ and public filings.

Debt/
EBITDA

PUBLIC COMPANIES ANALYSIS: SELECT OPERATING AND MARKET PERFORMANCE PARAMETERS

Ticker
Protein
Cal-Maine Foods, Inc.
JBS S.A.
Sanderson Farms, Inc.
Seaboard Corp.
Tyson Foods, Inc.

CALM
JBSS3
SAFM
SEB
TSN

Price per
Share at
5/12/2015

Price as
% of 52wk
High

Enterprise
Value

$51.14
5.43
82.00
3,410.97
40.92

100.9%
99.0
78.9
73.5
93.0

$2,295.2
24,540.4
1,747.2
3,436.0
24,067.7

24.4%
15.5
20.7
10.0
8.3

16.9%
8.6
17.7
7.4
6.2

1.49x
0.62
0.61
0.53
0.59

8.8x
7.2
3.5
7.2
9.6

8.7x
1.9
3.8
NA
7.4

NA
1.9
6.0
NA
7.1

0.2x
3.9
0.0
0.3
3.1

93.0%
89.1%

$3,436.0
$11,217.3

15.5%
15.8%

8.6%
11.3%

0.61x
0.77x

7.2x
7.3x

5.6x
5.5x

6.0x
5.0x

0.3x
1.5x

88.0%
92.4
92.9
92.0
92.4
96.6
96.3
92.5

$17,788.0
14,098.5
9,737.2
9,609.8
3,511.2
17,228.9
37,387.8
7,402.4

46.0%
44.5
44.4
42.6
33.9
5.6
6.7
20.4

20.5%
12.6
22.4
21.2
19.0
3.7
5.2
14.7

3.74x
2.18
3.15
3.69
2.46
0.32
0.48
1.31

18.3x
17.3
14.1
17.4
13.0
8.6
9.2
8.9

17.4x
17.6
13.4
16.3
13.0
7.7
9.3
8.5

16.5x
16.4
12.6
15.9
11.4
7.6
8.9
8.1

1.3x
2.2
1.4
2.8
1.9
2.1
1.6
2.7

92.5%
92.9%

$11,917.9
$14,595.5

38.2%
30.5%

16.8%
14.9%

2.32x
2.17x

13.5x
13.4x

13.2x
12.9x

12.0x
12.2x

2.0x
2.0x

91.9%
86.3
79.9
92.6
91.8
75.5
92.6
83.6
73.8

$61,183.1
1,874.5
10,882.6
18,426.8
46,453.6
4,995.8
401.1
1,069.8
14,603.4

12.8%
23.0
6.4
26.5
21.8
14.9
27.1
27.2
35.5

3.9%
6.3
5.3
6.3
4.8
4.4
4.0
5.3
9.3

0.53x
0.49
0.29
0.50
0.43
0.28
0.26
0.38
0.98

13.5x
7.8
5.5
7.9
9.0
6.4
6.5
7.2
10.5

12.8x
7.8
8.7
7.8
8.5
6.3
NA
NA
9.9

11.9x
7.3
9.0
7.6
8.1
6.1
NA
NA
8.9

1.1x
3.9
2.3
1.5
2.3
3.5
0.7
0.0
0.0

86.3%
85.3%

$10,882.6
$17,765.6

23.0%
21.7%

5.3%
5.5%

0.43x
0.46x

7.8x
8.3x

8.5x
8.8x

8.1x
8.4x

1.5x
1.7x

74.8%
88.3
80.5
80.0
96.8

$1,257.0
24,361.6
651.5
3,889.1
1,778.0

7.1%
17.5
24.8
16.0
14.6

1.5%
4.9
4.7
3.7
2.8

0.15x
0.50
0.77
0.51
0.22

10.2x
10.2
NM
13.9
8.0

9.8x
10.1
9.6
11.4
7.4

8.5x
9.4
8.4
10.0
7.1

0.3x
3.2
3.6
2.0
2.6

80.5%
84.1%

$1,778.0
$6,387.4

16.0%
16.0%

3.7%
3.5%

0.50x
0.43x

10.2x
10.6x

9.8x
9.7x

8.5x
8.7x

2.6x
2.3x

Group Median
Group Mean
Ingredients / Flavorings
Givaudan SA
Kerry Group plc
International Flavors & Fragrances Inc.
Symrise AG
Sensient Technologies Corporation
Bunge Limited
Archer-Daniels-Midland Company
Ingredion Incorporated

GIVN
KRZ
IFF
SY1
SXT
BG
ADM
INGR

$1,850.61
71.91
114.40
63.72
64.74
89.98
51.92
80.69

Group Median
Group Mean
Retail
Costco Wholesale Corporation
Ingles Markets, Incorporated
J. Sainsbury plc
Koninklijke Ahold N.V.
The Kroger Co.
SUPERVALU Inc.
Village Super Market Inc.
Weis Markets, Inc.
Whole Foods Market, Inc.

COST
IMKT.A
SBRY
AH
KR
SVU
VLGE.A
WMK
WFM

$144.07
47.12
4.37
20.71
71.34
9.06
32.02
43.40
42.51

Group Median
Group Mean
Foodservice Distribution
Core-Mark Holding Company, Inc.
Sysco Corporation
The Chefs' Warehouse, Inc.
United Natural Foods, Inc.
SpartanNash Company
Group Median
Group Mean

CORE
SYY
CHEF
UNFI
SPTN

$53.46
36.61
19.38
67.13
32.10

LTM Margins
Gross
Margin
EBITDA

EV / LTM
Revenue

Valuation Multiples
EV / LTM
EV / 2015E
EBITDA
EBITDA

EV / 2016E
EBITDA

Note: EV = Enterprise value equals market value plus total straight and convertible debt, preferred stock and minority interest, less cash and investments in unconsolidated subsidiaries.
Source: Capital IQ and public filings

Notes:
EV = Enterprise Value equals Market Value plus total straight and convertible debt, preferred stock and minority interest, less cash and investments in unconsolidated subsidiaries.
Source: Capital IQ and public filings.

Debt/
EBITDA

PRSRT STD
U.S. POSTAGE
PAID
STOUT RISIUS ROSS
PERMIT NO. 204

1 South Wacker Drive, 38th Floor


Chicago, IL 60606

SRR Food & Beverage


SRR professionals have extensive experience across the entire value chain of food and beverage related
companies, including the following sub-verticals within the sector:
FOOD & BEVERAGE INDUSTRY
nn
nn
nn
nn

Packaged/Manufactured food
Baked/Snack foods
Dairy
Beverages

nn
nn
nn
nn

Protein
Ingredients/Flavorings
Retail
Foodservice distribution

SRR Investment Banking


SRRs Investment Banking Group focuses on mergers, acquisitions and capital raising for middle market
businesses, private equity portfolio companies, family-owned businesses and public companies in a
wide variety of industries. Our senior professionals help clients evaluate a range of strategic and financial
alternatives. SRR has significant experience assisting companies with an evaluation of all available
strategic and financial alternatives.

INVESTMENT BANKING

VALUATION & FINANCIAL OPINIONS

DISPUTE ADVISORY & FORENSIC SERVICES

SRR is a trade name for Stout Risius Ross, Inc. and Stout Risius Ross Advisors, LLC, a FINRA registered broker-dealer and SIPC member firm.
This document is intended to provide an overview of certain information relating to the Aerospace & Defense Industry. The material presented herein is based on certain sources and data we consider
reliable, however we make no representations as to its accuracy or completeness. The information presented is as of the date provided herein, and we have no obligation to update the information.
This document is intended for the private use of the recipient for informational purposes only, and we are not soliciting any action based upon it. The material is for general information only and
should not be construed as containing any specific advice or recommendation. No part of this document may be copied, photocopied, or duplicated in any form by any means or redistributed
without the express written consent of Stout Risius Ross Advisors, LLC.