www.harriswilliams.de Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan. Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins. FOOD AND BEVERAGE INDUSTRY UPDATE │ JANUARY 2017
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www.harriswilliams.de
Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6
St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul
Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main,
Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative
(Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
FOOD AND BEVERAGE
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INDUSTRY UPDATE │ JANUARY 2017
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www.harriswilliams.de
WHAT WE’RE SEEING
1
CONTENTS
INDUSTRY VITAL SIGNS
EQUITY MARKET OVERVIEW
M&A MARKET OVERVIEW
DEBT MARKET OVERVIEW
RECENT M&A ACTIVITY
EARNINGS CALENDAR
GROUP OVERVIEW
Harris Williams & Co. is a leading advisor to the food and beverage market. Our significant experience covers a broad range of end markets, industries, and business models. This particular report focuses on trends and metrics in the following areas:
THESE FOODS AREN’T GENETICALLY MODIFIED BUT THEY ARE “EDITED”
Soy, almond, rice, hemp, pistachio, macadamia, and sunflower – just a sampling of the types of “milk” consumers arelikely to see in the dairy cases of their local grocery stores. Now, the National Milk Producers Federation, whichrepresents dairy farmers nationwide, is fighting back, calling on the FDA to limit plant-based drinks’ ability to marketthemselves as “milk.”
Access the full article here.
SOY, ALMOND, COCONUT: IF IT'S NOT FROM A COW, CAN YOU LEGALLY CALL IT MILK?
Created with tools that snip – rather than add – DNA at precise locations, “gene-edited” crops differ from their“genetically modified” counterparts. In fact, they largely fall outside of current regulations, including labelingpractices, altogether. Regulators and consumers alike are beginning to question whether technical intricacies arestymieing the more practical objectives of regulations.
Access the full article here.
With the rising popularity of organic animal-feed applying pressure to domestic supply, the Organic Trade Associationand the USDA are rolling out a new, transitional certification. Their goal is to lower the hurdle for farmers seeking totake the leap into organic farming practices.
($ in millions, except per share data) Ticker 1/12/17 52-wk High Cap Value Revenue EBITDA 1 Year 3 Years Gross EBITDA Multiple Revenue EBITDA Revenue EBITDA
Mean 4.0% 2.5% 37.3% 13.1% 31.9x 1.46x 10.3x 1.57x 11.6x
Median (2.2%) 0.8% 32.0% 11.9% 30.3x 1.06x 9.5x 1.30x 11.0x
LTM EV / LTM EV / 2016ERevenue Growth LTM Margins
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PUBLIC COMPARABLES5
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FOOD AND BEVERAGE
INDUSTRY UPDATE │ JANUARY 2017
Price at As a % of Market Enterprise P/E
($ in millions, except per share data) Ticker 1/12/17 52-wk High Cap Value Revenue EBITDA 1 Year 3 Years Gross EBITDA Multiple Revenue EBITDA Revenue EBITDA
Mean 0.9% 5.8% 31.4% 12.6% 26.2x 2.05x 15.0x 2.01x 18.0x
Median (1.1%) 6.4% 33.3% 13.7% 24.0x 2.37x 15.0x 2.23x 16.0x
LTM EV / LTMRevenue Growth LTM Margins EV / 2016E
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PUBLIC COMPARABLES5
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FOOD AND BEVERAGE
INDUSTRY UPDATE │ JANUARY 2017
Price at As a % of Market Enterprise P/E
($ in millions, except per share data) Ticker 1/12/17 52-wk High Cap Value Revenue EBITDA 1 Year 3 Years Gross EBITDA Multiple Revenue EBITDA Revenue EBITDA
United Natural Foods, Inc. UNFI 47.13 90.3% 2,446 3,026 8,672 304 4.9% 11.5% 15.3% 3.5% 19.5x 0.35x 10.0x 0.34x 9.7x
Mean 5.3% 15.2% 11.0% 2.3% 23.6x 0.22x 10.3x 0.24x 9.6x
Median 5.6% 8.8% 13.1% 2.2% 22.3x 0.22x 9.3x 0.23x 9.7x
EV / 2016ELTM Revenue Growth EV / LTMLTM Margins
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PUBLIC COMPARABLES5
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FOOD AND BEVERAGE
INDUSTRY UPDATE │ JANUARY 2017
Price at As a % of Market Enterprise P/E
($ in millions, except per share data) Ticker 1/12/17 52-wk High Cap Value Revenue EBITDA 1 Year 3 Years Gross EBITDA Multiple Revenue EBITDA Revenue EBITDA
Mean 11.9% 13.6% 20.6% 13.9% 38.7x 2.85x 15.7x 2.73x 15.4x
Median 8.4% 10.1% 14.6% 11.7% 35.7x 1.66x 12.5x 1.62x 12.4x
LTM Revenue Growth LTM Margins EV / LTM EV / 2016E
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PUBLIC COMPARABLES5
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FOOD AND BEVERAGE
INDUSTRY UPDATE │ JANUARY 2017
Price at As a % of Market Enterprise P/E
($ in millions, except per share data) Ticker 1/12/17 52-wk High Cap Value Revenue EBITDA 1 Year 3 Years Gross EBITDA Multiple Revenue EBITDA Revenue EBITDA
J&J SNACK FOODS CORP. TO ACQUIRE HILL & VALLEY INC.
ARGOSY PRIVATE EQUITY AND MTN CAPITAL PARTNERS TO ACQUIRE RITA’S FRANCHISE COMPANY
Argosy Private Equity and MTN Capital Partners have agreed to acquire Rita’s Franchise Company, a portfolio company of Falconhead Capital, for an undisclosed amount.
Rita’s is the largest Italian Ice concept in the world with more than 600 locations in 30 states and four countries.
The acquisition will allow Argosy and MTN Capital to help facilitate Rita’s continued geographic expansion and growth of its guest loyalty program.
Enterprise Value: NDRevenue Multiple: NDEBITDA Multiple: NDAnnounced: December 30, 2016
Ingredion Incorporated has agreed to acquire TIC Gums, Inc.
TIC Gums provides texture systems and stability solutions to the food and beverage industry.
The transaction will allow Ingredion to leverage TIC Gums’ texture expertise to expand its portfolio of specialty offerings and further diversify its customer base.
80
90
100
110
120
130
140
Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17
Restaurant Natural/Organic Beverage
Private Label Food Manufacturing Protein Processing/Dairy S&P 500
Enterprise Value: NDRevenue Multiple: NDEBITDA Multiple: NDAnnounced: January 3, 2017
18.3%
17.5%
16.2%
11.8%
9.5%
1.4%
J&J Snack Foods Corp. has agreed to acquire Hill & Valley Inc., a portfolio company of Circle Peak Capital and Quilvest, for an undisclosed amount.
Hill & Valley produces branded and private label Sugar-Free and No Sugar Added pre-baked bakery items.
The transaction will allow J&J Snack Foods to expand its in-store bakery offerings and capitalize on growth opportunities with the acquisition of a newly constructed facility.
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M&A MARKET OVERVIEW*
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FOOD AND BEVERAGE
INDUSTRY UPDATE │ JANUARY 2017
Food and Beverage M&A Trends5
MEDIAN FOOD & BEV. TRANSACTION MULTIPLES
PRIVATE EQUITY INVESTMENTS & EXITS
Latest Deals and Announced Private Equity Activity5
LAST 10 DEALS ANNOUNCED
ANNOUNCED FOOD & BEV. TRANSACTIONS
* M&A transactions include European and cross-border deals since 2015.
9.9x
8.8x 8.3x
8.0x
11.3x
9.2x 9.7x
8.8x
10.0x
0.00x
0.40x
0.80x
1.20x
1.60x
2.00x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
2008 2009 2010 2011 2012 2013 2014 2015 2016
EV
/ LTM
Sa
les M
ultip
le
EV
/ L
TM E
BIT
DA
Mu
ltip
le
EV / LTM EBITDA EV / LTM Sales
$9.3
$67.2
$8.2$24.0
$55.7
$120.7
$247.7
$51.8
$1.1
0
100
200
300
400
500
600
700
$0
$40
$80
$120
$160
$200
$240
$280
2009 2010 2011 2012 2013 2014 2015 2016 2017
YTD
Nu
mb
er o
f Tran
sa
ctio
ns
Ag
gre
ga
te
D
ea
l V
alu
e (
$ in
billio
ns)
Aggregate Deal Value # of Deals
14
3225 26
3831
65
110
1817
34
18
3643
48
6560
12
0
20
40
60
80
100
120
2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD
Nu
mb
er
of
Tra
nsa
cti
on
s
Number of Investments Number of Exits
Announced Target Buyer1/0/1900 0 Cargill, Incorporated
1/13/2017 Fricopan Back GmbH Immekath Sun Fruits GmbH
Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website.
OUR FIRM
FOOD AND BEVERAGE
INDUSTRY UPDATE │ JANUARY 2017
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HARRIS WILLIAMS & CO.
1. IMF
2. U.S. Bureau of Labor Statistics
3. Unweighted Average
4. U.S. Census Bureau
5. Factset
6. Thomson Financial
7. S&P
8. Reuters
SOURCES
FOOD AND BEVERAGE
INDUSTRY UPDATE │ JANUARY 2017
DISCLOSURES
17
Harris Williams & Co. (www.harriswilliams.com and www.harriswilliams.de) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.
Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US.
The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.