Food and Beverage Industry Snapshot

JANUARY 2014
Middle Market Investment Banking
Food and Beverage
Industry Snapshot
QUARTERLY U.S. M&A DEAL VOLUME AND VALUE
Page 1:
Food and Beverage Industry Highlights
LTM NOVEMBER 2013 M&A VOLUME BY SECTOR
LTM NOVEMBER 2013 M&A VOLUME BY SECTOR
Dairy
8.3%
Deal Volume
n
n
n
$25
100
$20
Beverage
17.8%
Mfr.
11.0%
$15
Retail
12.2%
Protein
14.2%
$10
Source: Capital IQ and SRR research
82
2Q13:
85 H.J. Heinz acquired by 3G Capital and Berkshire
Hathaway for $28.7 billion
80 Smithfield Foods acquired by Shuanghui International
3Q13:
for $7.0 billion Q1
Q2
Q3
Q4
1Q13: Ralcorp Holdings acquired by ConAgra for $6.8 billion
1Q13: Supervalu’s Albertsons, Acme,
Jewel-Osco, Shaw’s
2012
and Star Market stores and related Osco and Sav-on instore pharmacies acquired by a consortium led byVolume
Cerberus
Capital Management for $3.3 billion
1Q13: Dean Foods’s Morningstar Foods division acquired by
Saputo Inc. for $1.45 billion
4Q13: U.S. Foods acquired by Sysco from private equity
investors CD&R and KKR for $8.4 billion (announced only)
QUARTERLY
U.S. M&A DEAL VOLUME
VALUE
QUARTERLY
U.S.AND
M&A
DEAL
120
115
110
Q1
Q2
106
100
$40
$35
$30
$25
100
97
$20
$15
Value
88
87
90
$0
Q3
110
2013
105
95
$5
VOLUME AND VALUE
$10
82
85
80
Q1
Q2
Q3
Q4
Q1
$5
Q2
2012
2012
Deal Value ($ billions)
n
$35
$30
97 Packaged /
Deal Volume
n
Ingredients /
Flavors
20.2%
Baked /
Snack Food
10.0%
However, if 2012 was the year of private business
88owners seeking
87
90
to minimize taxes, 2013 was the return of the “mega” deal:
n
$40
Foodservice
Distribution
6.2%
Deal Value ($ billions)
In 2013, merger and acquisition activity in the food and beverage
120
industry mirrored trends seen in the overall market. The increase
in the tax rate on long term capital gains (which became effective
115
January 1, 2013) pulled forward transactions into the 2012110
tax
year110
that might otherwise have been completed in 2013. For the
106
broader M&A market, this resulted in a record number of deals
completed
105 in the fourth quarter of 2012 followed by a record
decline (40%) quarter over quarter in transactions completed in
the 100
beginning of 2013. Food and beverage exhibited a similar
dynamic with a 39% decrease in closed deals quarter over
quarter
95(i.e. 4Q12 vs. 1Q13).
$0
Q3
2013
2013
Source: Capital IQ and SRR research
Volume
Value
ENTERPRISE VALUE / EBITDA
ENTERPRISE VALUE / EBITDA
ENTERPRISE VALUE / EBITDA
16.0x
14.0x
12.7x
11.6x 11.7x
11.5x 11.4x
12.0x
10.0x
13.1x
12.5x
9.8x
8.9x
9.4x
9.9x
10.3x
8.5x
8.9x
9.2x
10.0x
9.9x 9.8x
10.3x
9.7x
16.0x
13.6x
14.0x
12.2x
12.7x
10.0x
10.4x
9.8x
8.9x
9.4x
9.9x
10.3x
8.5x
8.9x
9.2x
6.0x
8.0x
7.1x
7.7x
2.0x
0.0x
5.4x
Packaged /
4.9x
Manufactured
6.0x
Food
10.3x
9.7x
8.9x
9.7x
9.0x
8.5x
4.0x
10.0x
9.9x 9.8x
8.0x
8.9x
12.6x12.2x
12.5x
13.1x
13.6x
12.6x
11.6x 11.7x
11.5x 11.4x
12.0x
11.3x
10.4x
11.3x
9.0x
8.5x
10.2x
7.7x
7.1x
9.4x
9.7x
4.9x
10.3x
10.2x
9.4x
8.4x 8.2x
7.0x
6.5x
5.4x
5.8x 6.0x 5.7x 5.6x
6.7x 6.9x
6.5x
10.3x
7.2x
8.4x 8.2x
7.0x
Baked /
Snack Foods
6.5x
Dairy
Beverages
5.8x 6.0x 5.7x 5.6x
Protein
6.7x 6.9x
Ingredients /
Flavorings
6.5x
7.2x
Retail
Foodservice
Distribution
4.0x
2.0x
0.0x
Packaged /
Manufactured
Food
Baked /
Snack Foods
Dairy
Beverages
Protein
Ingredients /
Flavorings
Retail
Foodservice
Distribution
Source: Capital IQ and SRR research
Nick P. Jachim
+1.312.752.3396
[email protected]
Gian G. Ricco
+1.312.752.3359
[email protected]
Timothy Cummins
+1.312.752.3305
[email protected]
Marcus Ewald
+1.312.752.3346
[email protected]
www.srr.com
Page 2:
Revenue Growth n n n
After rebounding from lows seen post-recession, overall
food and beverage industry revenue growth flattened in
2013. Part of this slowdown can be attributed to a recent
relatively tame (beef, pork) to declining (corn, wheat,
soybeans, sugar, coffee) commodity environment, but
it also reflects normalized volumes across most of the
industry with only a few exceptions (e.g. gluten-free,
craft beer).
F&B MEDIAN INDUSTRY REVENUE GROWTH
F&B MEDIAN INDUSTRY REVENUE GROWT
12.0%
9.8%
10.0%
8.5%
8.5%
8.0%
6.0%
4.0%
2.5%
2.0%
0.7%
0.0%
2009
2010
2011
2012
LTM
Revenue Growth
Source: Capital IQ and SRR research
Profit Margins n n n
Margins in 2013 benefited from the aforementioned
softening commodity environment, as manufacturers have
been able to support prices to their customers in spite of
flat to falling input prices – a common lag effect (and a
welcome relief to margin pressure experienced in a rising
cost environment).
F&B MEDIAN GROSS PROFIT & EBITDA MARGIN
F&B MEDIAN GROSS PROFIT & EBITDA MARGIN
30.0%
25.0%
20.0%
27.2%
27.4%
27.1%
27.2%
27.7%
10.1%
11.3%
10.9%
10.1%
10.3%
2009
2010
2011
2012
LTM
15.0%
10.0%
5.0%
0.0%
EBITDA Margin
Gross Profit Margin
Source: Capital IQ and SRR research
16.0x
1.4x
14.0x
1.2x
12.0x
1.0x
10.0x
0.8x
8.0x
0.6x
6.0x
4.0x
8.7x
8.0x
9.3x
10.4x
10.4x
0.2x
2.0x
0.0x
0.4x
2009 2010 2011 2012 LTM
EV / EBITDA
EV / Sales Multiple
Surprisingly, in spite of the lack of high quality companies
for sale, the accommodative credit markets, and the overall
increase in average deal size due to the aforementioned
“mega” deals, overall reported transaction multiples
paid by acquirers were down slightly in 2013 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 this year, and (as seen on the previous
page) the valuations seen for comparable companies in
the public equity markets.
F&B MEDIAN TRANSACTION MULTIPLE
F&B MEDIAN TRANSACTION MULTIPLE
EV / EBITDA Multiple
Transaction Multiple n n n
0.0x
EV / Sales
Source: Capital IQ and SRR research
Page 3 – graph 1 (revised) Recent Trends and Transactions by Food & Beverage Sector
Packaged / Manufactured Food
n
n
n
n
Manufacturers continue to focus on serving consumer demand
for healthy, appetizing and affordable packaged foods that
accommodate busy lifestyles.
n
n
n
n
Overall industry estimates for 2014 are for 4% revenue growth
and expanding margins from easing commodity prices, which
should free up capital for greater investment in promotion
and R&D.
Similar to Packaged / Manufactured, producers need to adapt
to changing diets (healthy, gluten-free) and food preferences
(blurring of eating occasions) in order 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.
Private label share was flat YoY at 12.5% of volumes; nonchocolate candy and granola bars were private label winners,
cookies and nuts/seeds saw private label volumes decline.
The fluid milk industry continues to face challenging trends
as overall industry volumes were down 2.3% in the first
three quarters of 2013; milk volumes have been impacted by
beverage substitution, a decline in birth rates, and weakening
cereal consumption.
Innovative dairy products that address consumer trends are
the exception, especially high protein drinks (e.g. KO’s Core
Power, DF’s TrueMoo Protein).
The increasing popularity of strained (i.e. Greek-style) yogurt
also helped offset flat fluid milk consumption.
Beverages
n
n
n
n
Sep-13
Aug-13
Jun-13
Acquisition of Ralcorp by CAG for $6.8 billion underscores the
continued importance of private label.
Dairy
n
Oct-13
Natural, organic and gluten-free foods will likely continue to be
areas of new product focus.
Baked / Snack Food
n
Close.
Date
Nov-13
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 expanding their product ranges to
include sports and energy drinks, tea and coffee, bottled water,
and newer beverage categories.
Craft beer volume growth (15% in 2012) continues to
outperform growth in overall beer sales (0.9% in 2012).
Acquisition rationale remains access to distribution as much as
product, operational needs.
Target
Conopco, Inc., Skippy
Peanut Butter Business
Associated Brands, Inc.
Dakota Growers Pasta
Company, Inc.
Overhill Farms, Inc.
H. J. Heinz Company
Acquirer
Value
Beijing Hormel Business
Management Co. Ltd.
Treehouse Foods, Inc.
(NYSE:THS)
Post Holdings, Inc. (NYSE:POST)
$700
Jan-12
Bellisio Foods, Inc.
Berkshire Hathaway Inc.
(NYSE:BRK.A); 3G Capital, Inc.;
3G Special Situations Fund III LP
Hearthside Food Solutions, Attune Foods, Inc.
LLC, Organic and Natural
Cereal, Granola and Snacks
Business
Ralcorp Holdings Inc.
ConAgra Foods, Inc. (NYSE:CAG)
Nov-12
The Balance Bar Company
May-13
NBTY, Inc.
$181
$370
$88
$28,686
$158
$6,800
$78
Close
Date
Annc’d.
Target
Acquirer
$410
Hackman Capital Acquisition
Company, LLC
Investcorp Bank B.S.C.
$63
Oct-13
Aug-13
Tyrrells Potato Crisps Ltd.
Jul-13
ARYZTA LLC, Certain
Flowers Foods, Inc. (NYSE:FLO)
Assets
Robert's American Gourmet B&G Foods North America, Inc.
Food, LLC
Labriola, Inc.
C3 Capital, LLC (and others)
Jul-13
Jun-13
Feb-13
Dec-12
Close
Date
Annc’d.
Bimbo Bakeries USA, Inc., Flowers Foods, Inc. (NYSE:FLO)
Certain Assets and
Trademark Licenses
Mary's Gone Crackers, Inc. Kameda Usa, Inc.
Target
Acquirer
Jun-13
Warrnambool Cheese And Bega Cheese Limited (ASX:BGA)
Butter Factory Company
Holdings Limited
(ASX:WCB)
Primera Foods Corporation M.G. Waldbaum Company
Jun-13
R&R Ice Cream Plc
Jan-13
Morningstar Foods, LLC
Nov-12
Maxim Production Co., Inc., Cal-Maine Foods, Inc.
Egg Production Assets
(NasdaqGS:CALM)
Calpis Co., Ltd.
Asahi Group Holdings, Ltd.
(TSE:2502)
Pilgrim's Corp., Commercial Cal-Maine Foods, Inc.
Egg Operations
(NasdaqGS:CALM)
Lactalis American Group,
Parmalat Belgium SA
Inc.
Oct-12
Aug-12
Jul-12
Close
Date
Annc’d.
Sep-13
Sep-13
Graphite Capital Management
LLP; PAI Partners; Graphite
Enterprise Trust plc (LSE:GPE)
Saputo Cheese USA Inc.
Target
Beam, Inc., Collection of
Brands Including Related
Inventory
GlaxoSmithKline plc,
Lucozade and Ribena
Brands
D.E Master Blenders 1753
N.V. (ENXTAM:DE)
Value
Apollo Global Management, LLC
(NYSE:APO); C. Dean
Metropoulos & Co.
Hostess Brands, Inc.,
Certain Snack Cake Brands,
Five Bakeries and Certain
Equipment
Old HB, Inc.
Acquirer
Luxco, Inc.
$152
$10
$195
$25
$50
$26
Value
$316
$36
$1,500
$1,450
$69
$1,153
$19
$774
Value
$65
Suntory Beverage & Food Limited
(TSE:2587)
$2,122
$10,442
$2,900
Sep-13
DS Waters of America, Inc.
Joh. A. Benckiser GmbH; Donata
Holding SE; JAB Holdings B.V.;
Parentes Holding SE
Crestview Partners, L.P.
Jun-13
Compañía Cervecera de
Coahuila, S.A. de C.V.
Constellation Brands Inc.
(NYSE:STZ)
Dec-12
Vermont Hard Cider
Company, LLC
C&C Group plc (ISE:GCC)
$305
Dec-12
North American Breweries,
Inc.
Cerveceria Costa Rica S.A.
$388
Page 4:
$920
Inc.
Page 4:
Recent Trends and Transactions by Food & Beverage Sector
Protein
n
n
n
n
Protein prices have stabilized, albeit at elevated levels.
Close
Date
Annc’d.
The robust harvest has driven down feed input costs, though
not all companies will be able to capture all of the benefits.
Sep-13
Acquisition of Smithfield by Shuanghui International for
$7.0 billion was notable for its size, and the fact that it is the
single largest acquisition of a U.S. target by a Chinese buyer
in history.
Pockets of secular growth remain, including branded protein
products and barbeque / smoked meats.
Ingredients / Flavorings
n
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.
Given the proprietary nature of R&D pipelines, combined with
the reluctance of key personnel to change firms, it comes as
no surprise that the large multinationals continue to look for
accretive acquisitions of all sizes.
Retail
n
n
n
n
Food retail has seen a resurgence of deal activity.
On the strategic side, Harris Teeter’s sale to Kroger, and
SuperValu’s divestiture of several chains to Cerberus,
combined for nearly $7 billion in transaction value alone.
On the private equity side, in addition to Cerberus, a number
of other investors have completed acquisitions of grocery
including Apollo, ComVest, Yucaipa, Morgan Stanley, Ares,
and Monitor Clipper.
C-stores remain highly fragmented; of the 149,000-plus stores,
2/3 are single store operators and the largest 100 chains
represent only 40% of the industry’s unit count.
Foodservice Distribution
n
n
With restaurant pricing likely to remain relatively conservative
in a flat to potentially negative traffic environment in 2014,
downward pressure on gross margins will continue.
Sysco/USFS merger: even post-merger (estimated ~26%
combined share) this is a highly fragmented and price
competitive market with ~15,000 distributors nationally; smaller
distributors may benefit from customers defecting to diversify
suppliers post merger.
Sep-13
Jun-13
Mar-13
Mar-13
Jan-13
Close
Date
Annc’d
Target
Acquirer
Allen Brothers
The Chefs' Warehouse, Inc.
(NasdaqGS:CHEF)
American Skin Food Group, Smithfield Foods, Inc.
LLC
Smithfield Foods, Inc.
Henan Shineway Industry Group
Co., Ltd. (Shuanghui Int’l)
BRF SA, Ana Rech Pork
JBS Aves Ltda
and Poultry Industrial Unit
Freybe Gourmet Foods, Ltd. Premium Brands Holdings
Corporation
Inghams Enterprises Pty
TPG Capital, L.P.
Limited
Big Sky Farms Inc.
Olymel L.P.
Target
Earthbound Farms (Kainos
Capital)
Value
$30
$24
$6,965
$99
$59
$900
$67
Acquirer
Value
WhiteWave Foods Co.
(NYSE:WWAV)
$600
Annc’d.
Austin Packaging Company Bellisio Foods, Inc.
Oct-13
Joe White Maltings Pty. Ltd. Cargill, Incorporated
$302
Oct-13
Conopco, Inc., Wish-Bone® Pinnacle Foods Inc. (NYSE:PF)
Salad Dressings Business
$580
Jun-13
Iberchem S.A.
Magnum Capital Industrial
Partners
$104
Apr-13
Eurofresh, Inc.
NatureSweet Limited
$51
Jun-12
Imperial Sugar Co.
Louis Dreyfus Commodities LLC
$148
Apr-12
GreenLine Foods, Inc.
Apio, Inc.
$70
Target
Target
Piggly Wiggly Carolina
Piggly Wiggly
Company,
Inc.,Carolina
22 Piggly
Company,
Inc., 22 Piggly
Wiggly
Stores
Wiggly
Stores
Harris Teeter Supermarkets,
Harris
Teeter Supermarkets,
Inc.
(NYSE:HTSI)
Inc. (NYSE:HTSI)
Delhaize
America, LLC,
Delhaize America,
Sweetbay,
HarveysLLC,
and
Sweetbay,
Harveys and
Reid's
Supermarket
Chains
Reid's Supermarket
Chains
Canada
Safeway Limited
CanadaParticipações
Safeway Limited
Wilkes
S.A.
Wilkes Participações S.A.
Acquirer
Acquirer
BI-LO Holding, LLC
BI-LO Holding, LLC
Value
Value
$35
$35
The Kroger Co. (NYSE:KR)
The Kroger Co. (NYSE:KR)
$2,658
$2,658
Close
Close
Date
Date
Annc’d.
Annc’d.
Annc’d.
Annc’d.
Annc’d.
Annc’d.
Nov-13
Nov-13
Oct-13
Oct-13
Jul-13
Jul-13
Mar-13
Mar-13
Feb-12
Feb-12
Close
Close
Date
Date
Annc’d
Annc’d
Dec-13
Dec-13
Nov-13
Nov-13
Nov-13
Nov-13
Sep-13
Sep-13
Jul-13
Jul-13
Apr-13
Apr-13
Dec-12
Dec-12
Nov-12
Nov-12
BI-LO, LLC
BI-LO, LLC
Sobeys Inc.
Sobeys Inc.
Casino,
Guichard-Perrachon
Casino, Anonyme
Guichard-Perrachon
Société
(ENXTPA:CO)
Société Anonyme
The Great Atlantic & Pacific Madison
Capital (ENXTPA:CO)
The
Great
Atlantic
&
Pacific
Madison
Capital
Tea Company, Inc., 2 Food
Tea Company,
Inc., 2 Food
Emporium
Stores
Emporium Stores
Albertson's,
Select Stores
Cerberus Capital Management,
Albertson's, Select Stores
Cerberus Capital Management,
L.P.
L.P.
Super Supplements, Inc.
Vitamin
Shoppe Mariner, Inc.
Super Supplements, Inc.
Vitamin Shoppe Mariner, Inc.
Target
Target
U.S. Foods
U.S. Foods Food Group,
Queensgate
Queensgate Food Group,
LLC
LLC Finch Co.
Nash
Nash Finch Co.
(NasdaqGS:NAFC)
(NasdaqGS:NAFC)
Fresh
Frozen Foods, LLC
Fresh Frozen Foods, LLC
Acquirer
Acquirer
Sysco (NYSE:SYY)
Sysco
(NYSE:SYY)
The
Chefs'
Warehouse, Inc.
The Chefs' Warehouse, Inc.
(NasdaqGS:CHEF)
(NasdaqGS:CHEF)
Spartan
Stores Inc.
Spartan Stores Inc.
(NasdaqGS:SPTN)
(NasdaqGS:SPTN)
Inventure
Foods, Inc.
Inventure Foods, Inc.
(NasdaqGM:SNAK)
(NasdaqGM:SNAK)
Associated Citrus Packers, Limoneira Company
Associated Citrus Packers, (NasdaqGS:LMNR)
Limoneira Company
Inc.
Inc.
(NasdaqGS:LMNR)
Thompsons
Limited
The
Andersons, Inc.
Thompsons Limited
The Andersons, Inc. Lansing
(NasdaqGS:ANDE);
(NasdaqGS:ANDE);
Trade Group, LLC Lansing
Trade Financial
Group, LLC
Capespan Group Limited
Zeder
Services Ltd
Capespan
Group
Zeder Financial
Services
Ltd Inc.
J.
T. Davenport
& Limited
Sons, Inc. Core-Mark
Holding
Company,
J. T. Davenport & Sons, Inc. (NasdaqGS:CORE)
Core-Mark Holding Company, Inc.
(NasdaqGS:CORE)
Hancock Cash & Carry Ltd H2
Equity Partners B.V.
Hancock Cash & Carry Ltd H2 Equity Partners B.V.
$6
$265
$265
$5,690
$5,690
$838
$838
$130
$130
$3,300
$3,300
$50
$50
Value
Value
$8,200
$8,200
$24
$24
$776
$776
$41
$41
$19
$19
$145
$145
$29
$29
$38
$38
$80
$80
Lean Hogs
$2.75
Sugar #11
Jan-14
Jul-13
Jul-12
Jan-12
Jul-11
Jan-11
$0.75
Jul-10
$1.25
Jan-10
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
$0.15
$1.75
Jul-09
$0.20
$2.25
Jul-08
$0.25
Jan-09
$ per pound
$0.30
Jan-09
Jan-14
COFFEE
Jan-08
Coffee
$3.25
Jul-08
Jan-14
Source: Bloomberg
$0.35
Jan-08
$ per pound
SUGAR #11
$0.10
Jul-13
Milk Class III
Source: Bloomberg
Sugar #11
Jan-13
Jul-12
Jul-11
Jan-12
Jan-11
Jul-10
Jan-10
Jul-09
Jul-08
$0.24
$0.22
$0.20
$0.18
$0.16
$0.14
$0.12
$0.10
$0.08
Jan-09
CLASS III
Jan-08
$ per pound
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
$ per pound
Source: Bloomberg
Milk ClassMILK
III
LEAN HOGS
$1.10
$1.00
$0.90
$0.80
$0.70
$0.60
$0.50
$0.40
Jul-13
Live Cattle
Soybean
Source: Bloomberg
Lean hogs
Jan-13
Jul-12
Jul-11
Jan-12
Jan-11
Jul-10
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Wheat
$1.40
$1.30
$1.20
$1.10
$1.00
$0.90
$0.80
$0.70
Jan-13
Corn
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
$18.00
$16.00
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
CATTLE
Jan-10
Live cattleLIVE
$ per pound
[right column]
CORN, WHEAT AND SOYBEAN
Corn, Wheat and Soybean
$ per bushel
[left column]
Jul-09
Page 6:
In sugar, the #11 contract has been trading below the cost of
production for 14 months; constrained production should drive
prices higher in 2014. In coffee, arabica bean prices remain
depressed after a bumper crop in South America flooded the
market; however this should stimulate demand and begin to
prop up prices early next year.
Jul-08
For the past six years, grain markets gyrated from one crop
crisis to the next, resulting in low inventories and high food
prices. However, the recent record harvest in the U.S. (e.g.
corn) and South America (e.g. Brazilian Soybeans) have
provided welcome relief to this trend (though at least one more
solid season is needed to fully replenish depleted stocks.
Jan-09
In general, commodity prices have either eased, or stabilized
somewhat (albeit at elevated levels).
Within protein, easing grain prices are a mixed bag for packers;
it reduces immediate feed costs (which puts downward
pressure on costs in the short-term) but also increases the
price owners will pay for young cattle (driving up prices in the
medium-term).
Jan-08
Commodity Trends
Coffee
Source: Bloomberg
Source: Bloomberg
Flowers Foods, Inc.
FLO
21.70
84.5
5,441.0
47.6
11.0
1.49
13.6
11.1
9.5
2.3
General Mills, Inc.
GIS
49.26
92.8
40,098.6
35.6
19.2
2.22
11.5
10.5
9.8
2.5
HSY
95.81
94.5
22,639.4
45.8
21.7
3.26
15.0
13.2
12.2
1.3
Hormel Foods Corporation
HRL
44.91
97.2
11,662.9
16.1
10.5
1.33
12.7
11.0
10.6
0.3
Kellogg Company
K
60.58
89.1
29,147.9
37.3
14.9
1.96
13.1
10.5
10.1
3.4
10.0
10.6
10.1
2.5
68.55
91.1
10,286.5
16.7
2.51
15.0
PUBLIC COMPANIES ANALYSIS: SELECT
OPERATING
AND
MARKET40.2
PERFORMANCE
PARAMETERS
13.3
12.7
2.0
The Hershey
Page
7: Company
Public
Companies
Analysis: KRFT
Select Operating
and
Parameters
Kraft Foods
Group, Inc.
53.45
91.0 Market
40,597.4Performance
33.8
22.3
2.23
McCormick & Company, Incorporated
MKC
The Hain Celestial Group, Inc.
HAIN
90.68
99.2
4,920.9
27.2
13.2
2.66
20.1
15.8
14.5
2.7
The J. M. Smucker Company
SJM
101.51
88.5
12,745.5
35.6
20.9
2.19
10.5
9.9
9.6
1.8
Treehouse Foods, Inc.
THS
68.98
90.9
3,305.6
21.7
13.6
1.48
10.9
9.2
8.7
3.0
Price per
Group Median
Share at
Group Mean
Ticker
1/3/2014
Price as
LTM Margins
Valuation Multiples
90.9%Enterprise
$12,745.5 Gross35.6%
16.7% EV / LTM
2.22x EV / LTM
12.7x EV / 2014E
10.9x EV / 2015E
10.1x Debt/ 2.5x
% of 52wk
$17,309.2 Margin33.3% EBITDA16.9% Revenue
2.22x EBITDA13.1x EBITDA11.4x EBITDA10.7x EBITDA 2.6x
High 91.2% Value
Packaged
Manufactured
Baked &
/ Snack
Foods Food
B&GARYZTA
Foods Inc.
AG
BGSARYN
$33.82
$69.30
89.8%
99.9% $2,659.8
$7,086.1
34.2%
27.2%
25.9%
12.6%
3.87x
1.57x
14.9x
12.5x
12.7x
11.0x
12.4x
10.3x
4.9x2.7x
Campbell
Soup
Company
Diamond
Foods,
Inc.
CPBDMND
42.42
25.27
86.995.8
17,872.9
1,163.5
36.724.4
17.8 4.8
2.231.38
12.628.8
10.9 9.8
10.710.0
3.415.0
ConAgra
Foods,
Inc.
Golden
Enterprises
Inc.
CAGGLDC
33.494.15
89.895.2
23,641.855.4
21.348.7
12.4 4.5
1.360.40
11.0 8.9
9.3 NA
8.8 NA
4.5 1.2
Flowers
Foods,
Inc.S.A.B. de C.V.
Grupo
Bimbo,
FLOBIMBO A
21.70
38.59
84.581.2
5,441.0
219,015.1
47.651.9
11.010.0
1.491.25
13.612.5
11.110.7
9.5 9.5
2.3 2.3
General
J&J Mills,
SnackInc.
Foods Corp.
GIS JJSF
49.26
87.23
92.896.1
40,098.6
1,532.3
35.630.3
19.215.1
2.221.77
11.511.7
10.510.6
9.8 NA
2.5 0.0
The John
Hershey
Company& Son Inc.
B Sanfilippo
HSYJBSS
95.81
23.95
94.591.1
22,639.4
332.0
45.816.2
21.7 7.5
3.260.45
15.0 6.1
13.2 NA
12.2 NA
1.3 1.3
Hormel
Foods Colony
Corporation
Lancaster
Corporation
HRLLANC
44.91
87.01
97.296.7
11,662.9
2,240.9
16.122.7
10.515.5
1.331.93
12.712.5
11.011.7
10.6 NA
0.3 0.0
Kellogg
Company
Penford
Corporation
K
PENX
60.58
12.10
89.175.7
29,147.9
230.5
37.3 9.6
14.9 4.9
1.960.49
13.110.1
10.5 6.8
10.1 NA
3.4 3.5
KraftInventure
Foods Group,
Inc.
Foods,
Inc.
KRFT
SNAK
53.45
13.34
91.097.0
40,597.4
293.0
33.818.4
22.3 7.9
2.231.46
10.018.5
10.610.9
10.1 9.4
2.5 2.2
McCormick
& Company,
Incorporated
Mondelez
International,
Inc.
MKCMDLZ
68.55
34.75
91.198.1
10,286.5
77,128.1
40.237.3
16.714.5
2.512.18
15.015.1
13.312.9
12.711.9
2.0 3.9
The Snyder's-Lance,
Hain Celestial Group,
Inc. Inc.
HAIN
LNCE
90.68
28.44
99.287.5
4,920.9
2,519.1
27.234.4
13.210.7
2.661.46
20.113.6
15.811.2
14.510.0
2.7 NA
The J. M. Smucker Company
SJM
101.51
35.6
20.9
2.19
10.5
9.9
9.6
1.8
Treehouse
Foods, Inc.
Group Median
THS
68.98
3.0 2.3x
Group Mean
Group Median
Group
Mean
Dairy
Dean Foods Company
Fromageries
Bel
Baked
/ Snack Foods
88.5
12,745.5
90.995.8%
3,305.6
$1,532.3
21.727.2%
13.610.0%
1.481.46x
10.912.5x
9.210.9x
8.710.0x
92.2%
$28,326.9
29.2%
9.8%
1.30x
13.7x
10.6x
10.2x
3.2x
90.9%
$12,745.5
35.6%
16.7%
2.22x
12.7x
10.9x
10.1x
2.5x
91.2%
$17,309.2
33.3%
16.9%
2.22x
13.1x
11.4x
10.7x
2.6x
DF
$17.58
41.7%
FBEL
279.49
93.2
2,037.1
31.8
$2,330.6
24.0%
5.5%
0.21x
3.7x
5.6x
5.4x
1.6x
12.9
0.76
5.9
NA
NA
2.2
ARYZTA
AGplc
Glanbia
ARYN
GL9
$69.30
11.05
99.9%
96.1
$7,086.1
3,706.7
27.2%
36.4
12.6%8.7
1.57x
1.58
12.5x
18.2
11.0x
15.6
10.3x
14.2
2.7x2.5
Diamond
Foods, Inc.
Danone
DMND
BN
25.27
51.68
95.885.5
1,163.5
38,685.3
24.449.7
4.816.6
1.381.80
28.810.9
9.810.3
10.0 9.6
15.0 3.1
Golden
Enterprises
Inc.
Lifeway
Foods Inc.
GLDC
LWAY
4.15
15.67
95.278.4
55.4
262.4
48.734.0
4.513.6
0.402.85
8.920.9
NA16.6
NA NA
1.2 0.8
Grupo
Bimbo,
S.A.B. de C.V.
Saputo,
Inc.
BIMBO
SAPA
38.59
48.44
81.288.7
219,015.1
11,099.8
51.913.7
10.011.2
1.251.34
12.512.0
10.710.8
9.510.1
2.3 1.9
J&J Snack Foods Corp.
JJSF
87.23
96.1
30.3
15.1
1.77
11.7
10.6
NA
0.0
1,532.3
JohnGroup
B Sanfilippo
Median& Son Inc.
JBSS
23.95
91.187.1%
332.0
$3,018.7
16.232.9%
7.512.0%
0.451.46x
6.111.4x
NA10.8x
NA 9.9x
1.3 2.0x
Lancaster
Group Colony
Mean Corporation
LANC
87.01
96.780.6%
2,240.9
$9,687.0
22.731.6%
15.511.4%
1.931.42x
12.511.9x
11.711.8x
NA 9.8x
0.0 2.0x
Penford Corporation
PENX
12.10
75.7
230.5
9.6
4.9
0.49
10.1
6.8
NA
3.5
Inventure
Foods, Inc.
Beverages
SNAK
13.34
97.0
293.0
18.4
7.9
1.46
18.5
10.9
9.4
2.2
GreenInternational,
Mountain Coffee
GMCR
Mondelez
Inc. Roasters, Inc. MDLZ
$75.75
34.75
$11,297.0
98.184.5% 77,128.1
37.337.2%
14.522.8%
2.182.59x
15.111.4x
12.9 9.4x
11.9 8.7x
3.9 0.3x
Monster Beverage
Snyder's-Lance,
Inc. Corporation
67.52
28.44
87.598.8
34.452.3
10.726.6
1.464.92
13.618.5
11.215.5
10.013.4
NA 0.0
MNST
LNCE
National Beverage Corp.
10,718.7
2,519.1
FIZZ
20.44
94.7
955.4
34.0
12.2
1.46
12.0
NA
NA
0.5
Pepsico,
Group
MedianInc.
PEP
82.24
94.5
95.8%
146,101.3
$1,532.3
52.7
27.2%
18.3
10.0%
2.21
1.46x
12.0
12.5x
10.6
10.9x
10.0
10.0x
2.3x2.4
Anheuser-Busch
InBev SA/NV
Group
Mean
ABI
76.46
96.1
92.2%
117,039.9
$28,326.9
58.7
29.2%
38.7
9.8%
2.80
1.30x
13.7x7.2
10.6x6.1
10.2x5.7
3.2x3.1
SAB
30.48
82.7
84,688.4
70.4
32.0
4.93
15.4
11.8
10.8
3.2
STZ
69.39
96.9
13,017.1
39.6
25.1
3.62
14.4
8.0
7.4
8.1
DF DGE
$17.58
19.87
41.7%
92.3
$2,330.6
49,181.0
24.0%
61.1
5.5%
33.7
0.21x
4.30
3.7x
12.8
5.6x
11.6
5.4x
10.6
1.6x2.7
SABMiller plc
Dairy
Constellation Brands Inc.
Dean
Foodsplc
Company
Diageo
Fromageries
StarbucksBel
Corporation
FBEL
SBUX
279.49
76.95
93.293.3
2,037.1
54,757.8
31.857.1
12.919.2
0.763.68
5.919.1
NA14.2
NA12.3
2.2 0.5
Glanbia
The plc
Coca-Cola Company
GL9KO
11.05
40.46
96.193.2
3,706.7
194,705.2
36.460.4
8.727.6
1.584.12
18.214.9
15.613.7
14.212.9
2.5 2.8
Danone
BN
51.68
85.5
Lifeway
Foods
Inc.
Group
Median
LWAY
15.67
78.493.9%
Saputo,
Inc.Mean
Group
SAP
48.44
38,685.3
49.7
16.6
1.80
10.9
10.3
9.6
3.1
262.4
$51,969.4
34.054.9%
13.625.9%
2.853.65x
20.913.6x
16.611.6x
NA10.6x
0.8 2.6x
88.792.7% 11,099.8
$68,246.2
13.752.4%
11.225.6%
1.343.46x
12.013.8x
10.811.2x
10.110.2x
1.9 2.4x
Group Median
87.1%
$3,018.7
32.9%
12.0%
1.46x
11.4x
10.8x
9.9x
2.0x
Group Mean
80.6%
$9,687.0
31.6%
11.4%
1.42x
11.9x
11.8x
9.8x
2.0x
84.5%
$11,297.0
8.7x
0.3x
Beverages
Green Mountain Coffee Roasters, Inc.
GMCR
$75.75
37.2%
22.8%
2.59x
11.4x
Monster Beverage Corporation
MNST
67.52
98.8
10,718.7
52.3
26.6
4.92
18.5
15.5
13.4
0.0
National Beverage Corp.
FIZZ
20.44
94.7
955.4
34.0
12.2
1.46
12.0
NA
NA
0.5
Pepsico, Inc.
PEP
82.24
94.5
146,101.3
52.7
18.3
2.21
12.0
10.6
10.0
2.4
Anheuser-Busch InBev SA/NV
ABI
76.46
96.1
117,039.9
58.7
38.7
2.80
7.2
6.1
5.7
3.1
SABMiller plc
SAB
30.48
82.7
84,688.4
70.4
32.0
4.93
15.4
11.8
10.8
3.2
Constellation Brands Inc.
STZ
69.39
96.9
13,017.1
39.6
25.1
3.62
14.4
8.0
7.4
8.1
Diageo plc
DGE
19.87
92.3
49,181.0
61.1
33.7
4.30
12.8
11.6
10.6
2.7
Starbucks Corporation
SBUX
76.95
93.3
54,757.8
57.1
19.2
3.68
19.1
14.2
12.3
0.5
The Coca-Cola Company
KO
40.46
93.2
194,705.2
60.4
27.6
4.12
14.9
13.7
12.9
2.8
Group Median
93.9%
$51,969.4
54.9%
25.9%
3.65x
13.6x
11.6x
10.6x
2.6x
Group Mean
92.7%
$68,246.2
52.4%
25.6%
3.46x
13.8x
11.2x
10.2x
2.4x
9.4x
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
Page 8:
PUBLIC COMPANIES ANALYSIS: SELECT OPERATING AND MARKET PERFORMANCE PARAMETERS
Public Companies Analysis: Select Operating and Market Performance Parameters
Ticker
Price per
Price as
Share at
% of 52wk
Enterprise
Gross
LTM Margins
1/3/2014
High
Value
Margin
Valuation Multiples
EBITDA
EV / LTM
EV / LTM
EV / 2014E
EV / 2015E
Debt/
Revenue
EBITDA
EBITDA
EBITDA
EBITDA
Protein
Cal-Maine Foods, Inc.
CALM
94.4%
$1,293.2
17.5%
10.2%
0.95x
9.3x
NA
NA
0.4x
JBS S.A.
JBSS3
8.33
92.7
47,361.0
12.1
6.0
0.54
9.0
6.8
6.4
5.7
Sanderson Farms, Inc.
SAFM
73.33
97.1
1,646.2
11.4
10.0
0.61
6.1
6.1
7.9
0.2
Seaboard Corp.
SEB
2,771.00
94.0
3,161.4
7.3
4.7
0.48
10.1
NA
NA
0.6
Tyson Foods, Inc.
TSN
33.42
97.2
12,776.6
6.9
5.5
0.37
6.7
6.1
5.8
1.3
$57.87
Group Median
94.4%
$3,161.4
11.4%
6.0%
0.54x
9.0x
6.1x
6.4x
0.6x
Group Mean
95.1%
$13,247.7
11.0%
7.3%
0.59x
8.2x
6.3x
6.7x
1.6x
94.2%
$13,061.1
Ingredients / Flavorings
Givaudan SA
GIVN
43.3%
19.5%
3.00x
15.4x
12.8x
12.1x
2.0x
Kerry Group plc
KRZ
49.85
98.5
10,067.3
43.0
11.7
1.71
14.6
12.9
11.8
2.3
International Flavors & Fragrances Inc.
IFF
85.92
95.1
7,596.5
43.4
20.8
2.61
12.5
11.3
10.6
1.5
Symrise AG
SY1
34.25
95.9
4,520.1
41.6
19.6
2.49
12.7
11.2
10.5
1.7
Sensient Technologies Corporation
SXT
48.33
90.6
2,750.1
32.0
17.0
1.87
11.0
9.9
9.0
1.4
Bunge Limited
BG
81.25
96.5
22,022.8
4.0
2.5
0.36
14.1
9.7
9.2
6.8
Archer Daniels Midland Company
ADM
43.19
98.2
31,835.7
4.1
3.1
0.35
11.3
7.8
7.7
2.4
Ingredion Incorporated
INGR
67.46
90.8
6,342.7
18.1
13.0
0.98
7.6
6.9
6.5
2.1
$1,289.00
Group Median
95.5%
$8,831.9
36.8%
15.0%
1.79x
12.6x
10.5x
9.9x
2.0x
Group Mean
95.0%
$12,274.5
28.7%
13.4%
1.67x
12.4x
10.3x
9.7x
2.5x
Retail
Arden Group Inc.
ARDN.A
43.5%
8.1%
0.80x
NA
0.0x
Costco Wholesale Corporation
COST
117.29
93.0
50,311.0
12.6
3.8
0.47
12.4
10.3x
9.5x
1.2
Ingles Markets, Incorporated
IMKT.A
26.73
91.1
1,504.0
22.1
5.8
0.40
7.0
6.4
6.1
4.2
J. Sainsbury plc
SBRY
3.74
87.4
9,405.5
5.6
6.1
0.39
6.5
6.3
6.1
2.0
Koninklijke Ahold N.V.
AH
13.10
92.4
12,053.6
26.2
6.4
0.36
5.7
5.3
5.1
1.4
The Kroger Co.
KR
39.10
89.2
28,131.2
21.2
4.6
0.28
6.2
6.0
5.7
1.8
The Pantry, Inc.
PTRY
16.22
92.1
1,270.6
11.6
2.9
0.18
6.2
5.5
NA
4.6
Safeway Inc.
SWY
32.31
87.6
13,087.1
27.6
4.9
0.30
6.0
8.0
8.1
2.6
SUPERVALU Inc.
SVU
7.13
81.4
4,904.1
14.6
4.0
0.29
7.2
6.4
6.1
4.6
Village Super Market Inc.
VLGE.A
31.89
80.3
398.3
26.8
4.2
0.27
6.5
NA
NA
0.7
Weis Markets, Inc.
WMK
52.21
96.5
1,302.4
27.9
6.6
0.48
7.4
NA
NA
0.0
Whole Foods Market, Inc.
WFM
56.29
85.8
19,951.6
35.8
9.6
1.54
16.2
13.8
11.8
0.0
$126.35
92.2%
$363.5
9.9x
NA
Group Median
90.2%
$7,154.8
24.2%
5.3%
0.38x
6.7x
6.4x
6.1x
1.6x
Group Mean
89.1%
$11,890.2
23.0%
5.6%
0.48x
8.1x
7.6x
7.3x
1.9x
6.9%
Foodservice Distribution
Core-Mark Holding Company, Inc.
CORE
1.2%
0.12x
10.3x
7.5x
6.5x
0.8x
Sysco Corporation
SYY
36.05
83.1
23,775.2
17.5
5.5
0.53
9.6
9.4
8.8
1.3
The Chefs' Warehouse, Inc.
CHEF
29.24
97.8
824.8
25.6
6.7
1.32
19.7
14.2
12.5
3.5
United Natural Foods, Inc.
UNFI
74.95
97.5
3,971.7
16.9
3.8
0.63
16.5
13.9
12.1
1.1
Spartan Stores Inc.
SPTN
23.85
96.2
1,051.7
21.0
4.0
0.40
9.9
9.4
NA
1.3
$75.43
98.5%
$925.1
Group Median
97.5%
$1,051.7
17.5%
4.0%
0.53x
10.3x
9.4x
10.5x
1.3x
Group Mean
94.6%
$6,109.7
17.6%
4.3%
0.60x
13.2x
10.9x
10.0x
1.6x
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
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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
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Packaged/manufactured food
Baked/snack food
Dairy
Beverages
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Protein
Ingredients/flavorings
Retail
Foodservice distribution
SRR Investment Banking
SRR’s 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
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