How To Buy A Company

Transcription

1 Fourth Quarter 2015 Food&BeverageIQ Summary of Food & Beverage Industry M&A and Capital Markets Activity

2 Recent Deal Activity 4Q 2015 October 1, Decatur, Illinois-based Archer Daniels Midland Company (NYSE:ADM) entered into an agreement to acquire Vineland, New Jersey-based Eatem Foods Company from private equity group Linsalata Capital Partners. Eatem produces natural and organic flavors, ingredients and related products. Archer Daniels management cited access to the growing market for savory flavor blends as the key driver for the acquisition. The announced transaction value was $160 million. October 13, Australia-based Treasury Wine Estates (ASX:TWE) acquired the Napa, California-based Chateau and Estate Wines divisions and UK-based wine business from Diageo (LSE:DGE). Treasury Wine management stated the acquisition would transform the firm s U.S. business into a larger player of scale in the fast-growing luxury segment of the U.S. wine market. The announced transaction value of $600 million represents an EBITDA multiple of 7.9x. October 15, Ireland-based Kerry Group (OTCMKTS:KRYAF) acquired Island Oasis from private equity group TSG Consumer Partners, Biothera Health from Biothera, Inc. and Red Arrow Products. Island Oasis provides natural cocktail mixes and beverage solutions; Biothera produces natural food, beverage and supplemental ingredients; Red Arrow supplies natural smoked and savory grilled flavors for the meat and food markets. Kerry management cited the three acquisitions strengthen their taste and nutritional solutions portfolio and food technology platforms. The announced transaction value of $735 million represents an EBITDA multiple 12.5x. October 28, Charlotte, North Carolina-based Snyder s-lance (NASDAQ:LNCE) entered into an agreement to acquire Stockton, California-based Diamond Foods (NASDAQ:DMND). Diamond Foods processes and distributes culinary, snack and ingredient nuts. Snyder management cited U.S. network expansion and growth opportunities in Europe as the key drivers for the acquisition. The announced transaction value of $1.9 billion represents an EBITDA multiple of 18.3x. November 2, Oak Brook, Illinois-based Tree House Foods (NYSE:THS) entered into an agreement to acquire Omaha, Nebraskabased Ralcorp Holdings from Conagra (NYSE:CAG). Ralcorp produces private label dry and refrigerated products. Tree House management cited expansion of their private label offerings as the key driver for the acquisition. The announced transaction value of $2.7 billion represents a revenue multiple of 0.8x. November 2, Marion, New York-based Seneca Foods (NASDAQ:SENEA) acquired Hart, Michigan-based Gray & Company. Gray produces cherries, glace and candied fruit products. Seneca management cited enhanced product offerings in their canned food business as the key driver for the acquisition. The announced transaction value was $37 million. November 11, Denver, Colorado-based Molson Coors Brewing Company (NYSE:TAP) entered into an agreement to acquire Chicago, Illinois-based Miller Coors from SABMiller (LSE:SAB). Molson Coors management cited enhanced market presence, global scale and operational synergies as the main drivers for the acquisition. This transaction is related to the SABMiller-AB InBev merger, with the intent of easing U.S. anti-trust concerns. The announced transaction value of $12.0 billion represents an EBITDA multiple of 7.2x. November 16, Victor, New York-based Constellation Brands (NYSE:STZ) entered into an agreement to acquire San Diego, California-based Ballast Point Brewing & Spirits, a craft beer producer. Constellation management cited Ballast s high-growth, premium platform as enabling Constellation to compete in the fast-growing craft beer segment. The announced transaction value was $1.0 billion. November 16, Ireland-based Glanbia (LSE:GLB) announced the acquisition of Ventura, California-based Think Thin. Think Thin produces protein bars and nutrition products. The acquisition provides Glanbia with a strategic addition to its portfolio of nutrition brands. The announced transaction value of $217 million represents a revenue multiple of 2.6x. November 18, Kansas City, Missouri-based Dairy Farmers of America (DFA) announced the acquisition in Springfield, Missouri-based DairiConcepts from Fonterra Co-operative Group (NZSE:FCG). DairiConcepts formulates and manufactures cheese and dairy ingredients for food service providers, restaurants and private label food manufacturers. DFA management stated the acquisition provides the opportunity to further grow its ingredients division and extend its global marketing outreach. The announced transaction value was $126 million. November 19, Private equity group Satori Capital acquired Phoenix, Arizona-based Sun Tree Holdings. Sun Tree manufactures branded and private label nuts and dried fruit products, including roasted and salted nuts and chocolate covered nuts. Satori management stated the acquisition allows the firm to participate in the shift in consumer demand toward healthy snacks. The announced transaction value was $20 million. November 24, Parsippany, New Jersey-based Pinnacle Foods (NYSE:PF) announced the acquisition of Boulder, Coloradobased Boulder Brands (NASDAQ:BDBD). Boulder manufactures margarine substitutes, flavored popcorn and other food products. Pinnacle management cited Boulder s presence in the growing and complementary health and wellness categories as the main driver for the acquisition. The announced transaction value of $975 million represents an EBITDA multiple of 22.1x. December 1, Sugarland, Texas-based Wholesome Sweeteners acquired Wheeling, Illinois-based Tru Sweets. Tru Sweets manufactures non-gmo and gluten free organic candies. Wholesome management cited growth in the better-for-you candy segment as the key driver for the acquisition. The financial terms of the transaction were not disclosed. December 7, Luxembourg-based JAB Holding Company entered into an agreement to acquire Waterbury, Vermont-based Keurig Green Mountain (NASDAQ:GMCR). Keurig manufactures coffee makers, specialty coffee and coffee products and accessories. JAB management cited its desire to build a global coffee platform as the main driver for the acquisition. The announced transaction value of $13.9 billion represents an EBITDA multiple of 13.9x.

3 Food & Beverage Company Trading Multiples ($s in millions) Company Beverages The Coca-Cola Company Pepsico, Inc. Dr Pepper Snapple Group, Inc. National Beverage Corp. Primo Water Corporation Glacier Water Services Inc. Food Retail The Kroger Co. SUPERVALU Inc. The Fresh Market, Inc. Weis Markets, Inc. Ingles Markets, Incorporated Village Super Market Inc. Manufactured Foods The Kraft Heinz Company Mondelez International, Inc. General Mills, Inc. Kellogg Company The Hershey Company ConAgra Foods, Inc. Campbell Soup Company The J. M. Smucker Company The Hain Celestial Group, Inc. Flowers Foods, Inc. Pinnacle Foods Inc. Treehouse Foods, Inc. Lancaster Colony Corporation Snyder's-Lance, Inc. J&J Snack Foods Corp. B&G Foods Inc. Diamond Foods, Inc. Bridgford Foods Corp. Protein & Dairy Tyson Foods, Inc. Hormel Foods Corporation Cal-Maine Foods, Inc. Dean Foods Company Sanderson Farms, Inc. 12/31/15 Q4 Price Market Total LTM Gross EBITDA Net Debt/ Enterprise Value/LTM Stock Price Change Cap. EV (1) Revenue EBITDA Margin Margin EBITDA Revenue EBITDA 5.50x 30.00x $ % $ 186,832 $ 210,717 $ 45,166 $ 12,369 61% 27% 1.9x 4.7x 17.0x % 145, ,056 64,419 12,097 54% 19% 1.8x 2.6x 13.8x % 17,605 20,037 6,245 1,442 59% 23% 1.7x 3.2x 13.9x % 2,110 2, % 14% NM 3.0x 21.8x % % 10% 1.7x 1.8x 18.7x (16%) % 17% 6.2x 1.5x 8.9x 44% 18% 1.8x 2.8x 15.5x 44% 18% 2.6x 2.8x 15.7x 4.0x 30.0x $ % $ 40,773 $ 51,732 $ 108,872 $ 5,599 23% 5% 2.0x 0.5x 9.2x 6.78 (6%) 1,803 4,277 17, % 4% 3.2x 0.2x 5.4x % 1,101 1,096 1, % 11% NM 0.6x 5.7x % 1,192 1,088 2, % 5% NM 0.4x 7.0x (8%) 893 1,781 3, % 6% 3.7x 0.5x 7.6x % , % 4% NM 0.2x 5.4x 26% 5% 3.5x 0.4x 6.4x 25% 6% 3.0x 0.4x 6.7x 5.5x 30.0x $ N/A $ 88,291 $ 117,652 $ 14,013 $ 3,153 38% 22% 6.6x 8.4x 37.3x % 71,258 85,694 29,636 4,942 39% 17% 3.0x 2.9x 17.3x % 34,212 43,572 17,283 3,467 35% 20% 2.4x 2.5x 12.6x % 25,612 33,272 13,897 1,619 35% 12% 4.7x 2.4x 20.6x (3%) 19,353 21,826 7,387 1,702 46% 23% 1.3x 3.0x 12.8x % 18,252 26,061 15,820 2,275 22% 14% 3.4x 1.6x 11.5x % 16,292 20,137 8,030 1,480 34% 18% 2.6x 2.5x 13.6x % 14,761 20,486 6,917 1,422 37% 21% 4.0x 3.0x 14.4x (22%) 4,159 4,899 2, % 13% 2.1x 1.7x 13.6x (13%) 4,559 5,448 3, % 12% 2.0x 1.4x 12.3x % 4,951 7,191 2, % 18% 4.8x 2.7x 15.3x % 3,381 4,674 3, % 11% 3.5x 1.4x 12.7x % 3,160 2,960 1, % 16% NM 2.6x 15.8x % 2,429 2,827 1, % 11% 2.0x 1.7x 15.3x % 2,180 2, % 15% NM 2.1x 13.6x (4%) 2,030 2, % 22% 4.9x 3.4x 15.6x % 1,216 1, % 13% 5.9x 2.2x 17.0x % % 8% NM 0.5x 6.3x 34% 16% 3.2x 2.5x 14.0x 33% 16% 3.6x 2.6x 15.4x 5.5x 30.0x $ % $ 21,108 $ 27,158 $ 41,373 $ 3,098 10% 7% 1.9x 0.7x 8.8x % 20,895 20,986 9,264 1,218 20% 13% 0.1x 2.3x 17.2x (15%) 2,247 1,858 1, % 28% NM 0.9x 3.3x % 1,567 2,344 8, % 4% 2.1x 0.3x 6.5x % 1,749 1,563 2, % 15% NM 0.6x 3.8x 20% 13% 1.9x 0.7x 6.5x 21% 14% 1.4x 0.9x 7.9x (as of December 31, 2015). (1) EV ( Enterprise Value ) is defined as market capitalization plus net debt, preferred equity and minority interest. (2) Median and mean values exclude all non-meaningful values. Amherst Partners Food & Beverage Indices Index Value 180% 170% 160% 150% 140% 130% 120% 110% 100% 90% 80% Overall, the Food sector, particularly Protein & Dairy providers, turned a healthy performance in 2015 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Beverages Food Retail Manufactured Foods Protein & Dairy S&P 500 Stock Index

4 Food & Beverage Indices Median Enterprise Value/LTM EBITDA 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Beverages Food Retail Manufactured Foods Protein & Dairy Food & Beverage Indices Median Net Debt/LTM EBITDA 4.0x 3.0x 2.0x 1.0x 0.0x Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Beverages Food Retail Manufactured Foods Protein & Dairy U.S. Food & Beverage Products M&A Activity 350 Industry M&A activity remains robust, with 2015 transaction value doubling that of the prior year $120 Total Transactions (Number of Deals) $12 $25 $106 $23 $34 $17 $ $62 $45 $98 $100 $80 $60 $40 $20 $- Aggregate Trans. Value ($s in Billions) Total Transactions Aggregate Transaction Value

5 Copyright 2016 Amherst Partners, LLC All Rights Reserved. Amherst Partners, LLC is a boutique, independent Investment Banking, Restructuring Advisory and Management Consulting firm. Securities transactions are offered through Amherst Partners wholly-owned subsidiary, One Amherst Partners LLC, a registered broker-dealer and member of FINRA ( and SIPC ( For more information, please visit our web site at This report is published solely for informational purposes and is not to be construed as rendering legal, accounting or investment advice or as a solicitation or an offer to buy or sell securities. Although information contained in this report has been obtained from and is based on sources that Amherst Partners, LLC believes to be reliable, it is not guaranteed as being accurate. Past performance is not an indication of future results. About Amherst Amherst Partners track record spans over 20 years of investment banking excellence, using senior level advisors to create unique solutions for middle-market transactions. Our Services Merger & Acquisition Advisory Capital Raising Corporate Restructuring Management Consulting For more information: Contact Us Chas Chandler, Partner Head of Food & Beverage Group cchandler@amherstpartners.com Scott Eisenberg, Partner seisenberg@amherstpartners.com Gary Lewis, Partner glewis@amherstpartners.com Don Luciani, Partner dluciani@amherstpartners.com Sheldon Stone, Partner sstone@amherstpartners.com Jeremy Falendysz, Managing Director jfalendysz@amherstpartners.com Brian Phillips, Managing Director bphillips@amherstpartners.com Maxim Ananich, Associate mananich@amherstpartners.com Ryan McLean, Associate rmclean@amherstpartners.com Arjuna Murthy, Associate amurthy@amherstpartners.com As a partner in IMAP, Amherst maintains a well-established network of international offices in over 30 countries. In 2015, IMAP advisers completed 221 global tranactions, with an aggregate transaction value of more than $9 billion. Through our IMAP partners, Amherst benefits by having seasoned deal professionals on the ground with first-hand knowledge of the local cultural and business environment.