Healthy Lifestyle and Craft Beer Quarterly Report

Transcription

Market Analysis
Spring 2015
Healthy Lifestyle and Craft Beer Quarterly Report
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Non-Durables
Natural, Organic & Functional Food & Beverage
Natural Living (Beauty, Household & Pet)
Supplements Wholesalers
Supplements Direct-to-Consumer
Fitness/Weight Management
• Fitness Centers
• Weight Management
• Health & Wellness Retailers/Distributors
Craft Products
• Craft Beer & Hard Cider
Kurt M. Roth
Managing Director
+1.312.609.4689
[email protected]
Owen L. Hart
Managing Director
+1.415.627.3273
[email protected]
David M. Silver
Managing Director
Head of European
Investment Banking
+44.207.667.8216
[email protected]
Satoshi Matsumoto
Managing Director
Director of Japan M&A
+1.312.609.5446
[email protected]
Table of Contents
Page
•
Robert W. Baird & Co. Healthy Lifestyle and Craft Beer Practice ........................1
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Healthy Lifestyle and Craft Beer Stock Activity .................................................. 2
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Quarterly Transaction Update ............................................................................ 4
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Addressable Markets .......................................................................................... 8
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Public Company Performance ........................................................................... 14
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Same-Store Sales Performance ........................................................................ 20
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Equity Capital Markets Overview ...................................................................... 21
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Recently Priced IPOs ........................................................................................ 22
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Baird’s Healthy Lifestyle and Craft Beer Transaction Experience ...................... 23
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Global Investment Banking Contact List........................................................... 24
The following report has been prepared by the Global Investment Banking Department of Robert
W. Baird & Co. This report is an overview and analysis of industry and consolidation trends and is
not intended to provide investment recommendations on any specific industry or company. A
complete listing of all companies covered by Baird U.S. Equity Research and applicable research
disclosures can be accessed at <http://www.rwbaird.com/researchdisclosure>. You can also call
1-800-792-2473 or write: Robert W. Baird, Equity Research, 24th Floor, 777 E. Wisconsin Avenue,
Milwaukee, WI 53202.
Robert W. Baird & Co. (“Baird”) is a leading middle
market focused investment bank serving the M&A
and equity financing needs of our clients throughout
the U.S., Europe and Asia. Since 2008, we have
advised on 404 M&A transactions totaling $89 billion
and have served as an underwriter on 547 equity
offerings totaling more than $172 billion in raised
capital.
Baird’s balanced buy- and sell-side practice provides
expertise for public and private companies, while
our dedicated financial sponsor coverage further
expands opportunities and financing resources for
our clients. Through close coordination between our
U.S., European and Asian bankers, we work to
optimize opportunities and results for clients in the
international marketplace. Approximately one-third
of our M&A activity over the past five years has
involved international transactions.
Please refer to Appendix – Disclaimers and Other Disclosures on page 25.
Robert W. Baird & Co. Healthy Lifestyle and Craft Beer Practice
AN EXPERIENCED, PROVEN AND TRUSTED ADVISOR
Baird’s Global Investment Banking team possesses highly relevant industry expertise and significant transaction
experience in the Healthy Lifestyle sector.
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We have in-depth advisory and equity origination capabilities in the Healthy Lifestyle space:
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Multiple high-profile assignments over the last decade
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Unique knowledge of consumer growth investors
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Expert insight into current “hot button” issues
Deep industry knowledge and proprietary transaction and benchmarking database
Established relationships with, and access to, key industry and client decision makers
Significant senior resources dedicated to industry and execution
Focus on long-term partnerships and senior level attention
Baird Healthy Lifestyle Practice Contacts
Kurt M. Roth
Owen L. Hart
David M. Silver
Satoshi Matsumoto
Managing Director
Managing Director
Managing Director
Managing Director
+1.312.609.4689
+1.415.627.3273
+1.312.609.5446
[email protected]
[email protected]
Head of European
Investment Banking
[email protected]
+44.207.667.8216
[email protected]
Baird is One of the Most Active Advisors and Underwriters to the Consumer Sector
Baird’s Consumer investment banking team has a
proven track record of delivering outstanding results
for our clients. We offer comprehensive strategic
advisory and capital market services across several
consumer sectors. Our transaction experience,
frequent dialogue with industry participants and
robust deal flow provide us with unique insight into
the sectors we serve.
Middle-Market Deal Award
Nine consecutive years
2005 - 2013
“Most Trusted” Research
Eleven consecutive years
2004 - 2014(1)
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Since the start of 2010, completed 111 consumer
M&A and public equity transactions worth $28 billion
Market maker in over 500 Consumer stocks
5 Consumer focused research analysts covering 82
companies
Adviser of the Year Awards
2008 - 2011
“Wisconsin Specialty Protein sale to
Omega Protein”
Nutrition Business Journal’s Top
Deal of the Year
January 2014
_____________________
(1) Baird ranked No.1 for “Most Trusted” Research for the eleventh consecutive year in the 2014 Greenwich Associates Surveys (2004 - 2014). Surveys conducted with U.S.
small-cap and mid-cap fund managers.
Robert W. Baird & Co.
1
Healthy Lifestyle and Craft Beer Stock Activity
Rising Valuations Supportive of Increased Transaction Activity
LTM Stock Performance
120%
HLCB
S&P 500
115%
12.3%
10.4%
110%
105%
100%
95%
90%
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
_____________________
Source: Capital IQ. LTM as of March 31, 2015.
See footnote at bottom of page for list of companies that comprise Healthy Lifestyle and Craft Beer (HLCB) index.
Recent Stock Performance
1-Month %
Change
3-Month %
Change
6-Month %
Change
1-Year %
Change
(1.7%)
0.4%
4.8%
10.4%
Healthy Lifestyle and Craft Beer
2.9%
4.6%
10.8%
12.3%
1.3%
12.6%
15.2%
28.4%
16.1%
4.1%
(1.2%)
(9.8%)
6.4%
(2.6%)
5.2%
(17.8%)
Health & Wellness Retailers/Distributors
0.1%
0.6%
24.9%
1.8%
Craft Products
3.9%
(3.4%)
7.4%
(0.7%)
Fitness Centers
2.9%
9.4%
14.3%
23.6%
(3.1%)
(26.3%)
(22.6%)
(10.1%)
2.9%
8.4%
22.9%
7.5%
Index
S&P 500
Weight Management
Recent Healthy Lifestyle and Craft Beer IPOs
_____________________
Natural, Organic & Functional Food & Beverage index consists of BDBD, FRPT, HAIN, TSE:2220, LWAY, MJN, MNST, SET:ICHI, TSX:SOY and WWAV.
VMS Wholesalers index consists of ENXTAM:DSM, NUTR, OME and PRGO.
VMS Direct-to-Consumer index consists of HLF, LFVN, NATR, NUS, RELV and USNA.
Health & Wellness Retailers/Distributors index consists of TFM, GNC, NGVC, SFM, UNFI, VSI and WFM.
Craft Products index consists of BREW and SAM.
Fitness Centers index consists of ASX:AAD, TSE:4801, BMV:SPORT S, LTM, BSE:533200 and CLUB.
Weight Management index consists of MED, NTRI and WTW.
Healthy Lifestyle and Craft Beer index consists of all companies listed directly above.
Recent Healthy Lifestyle and Craft Beer IPOs index consists of SFM, WWAV, NGVC, FRPT, GNC and TFM.
2
Healthy Lifestyle and Craft Beer Stock Activity
Recent Valuations
Median Multiple
Index
LTM Revenue
LTM EBITDA
2015 P/E
Healthy Lifestyle and Craft Beer
1.4x
11.5x
21.5x
3.0x
19.3x
31.8x
1.1x
7.7x
16.1x
0.8x
8.4x
15.3x
Health & Wellness Retailers/Distributors
1.2x
13.4x
24.4x
Craft Products
2.6x
19.1x
35.2x
Fitness Centers
2.0x
10.2x
19.1x
Weight Management
1.4x
7.3x
16.3x
Recent Healthy Lifestyle and Craft Beer IPOs
2.0x
14.9x
40.1x
_____________________
Source: Capital IQ. Figures as of March 31, 2015.
See “Recent Stock Performance” table on page 2 for list of companies that comprise each index.
Top 10 Stock Price Gainers in Q1 2015
50%
40%
40.4%
38.7%
29.5%
30%
28.7%
27.7%
26.7%
25.3%
23.4%
22.8%
20%
15.4%
10%
0%
HL Corp
(Shenzhen)
Nu Skin Omega Protein Talwalkars
Monster
Enterprises Corporation Better Value
Beverage
Inc.
Fitness Limited Corporation
The
WhiteWave
Foods
Company
Life Time
Fitness, Inc.
Johnson Central Sports Lifeway Foods
Health Tech
Co.,Ltd.
Inc.
Co., Ltd.
Top 10 Stock Price Losers in Q1 2015
0%
(10%)
(20%)
(30%)
(40%)
(50%)
(60%)
(70%)
(80%)
(39.2% )
(71.9% )
Weight
Watchers
International,
Inc.
(28.5% )
(15.3% )
(15.2% )
Lifevantage Ardent Leisure Grupo Sports
Vitamin
Corporation
Group
World, S.A.B. Shoppe, Inc.
de C.V.
(13.8% )
(10.8% )
Boulder
SunOpta Inc.
Brands, Inc.
(10.8% )
(10.7% )
Nature's
Medifast Inc.
Sunshine
Products Inc.
(8.9% )
Koninklijke
DSM N.V.
_____________________
Source: Capital IQ. YTD as of March 31, 2015.
3
Quarterly Transaction Update
Pages 4-6 list M&A transactions, private placements and equity offerings announced during Q1 2015 for categories
within the scope of this report. The Healthy Lifestyle and Craft Beer sectors registered significant levels of M&A
activity on a global basis in the first quarter. We have identified 34 change-of-control M&A transactions announced
during the quarter; this level was slightly below the quarterly average of 37 over the past two years.
Global Healthy Lifestyle M&A Activity by Quarter
Deal Count
Average Deal Count
60
48
50
40
30
Average = 37
36
34
Q4-13
Q1-14
45
37
34
32
29
20
10
0
Q2-13
Q3-13
Q2-14
Q3-14
Q4-14
Q1-15
_____________________
Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis.
Includes deals in the following segments: Natural, Organic & Functional Food and Beverages; Natural Living products; VMS Wholesalers and Direct-to-Consumer platforms;
Health & Wellness Specialty Retailers and Distributors; Craft Beer & Hard Cider; Weight Management; and Fitness Centers
Global Healthy Lifestyle and Craft Beer M&A Activity in Q1
Date
Announced
Target Name /
Nationality
Target
Segment
Description
Acquiror
Deal
Value
($mil)
Commentary
30-Mar-15
Total Fitness / U.K.
Fitness Centers
Operator of health
clubs
Northedge Capital
Partners; RooGreen
Ventures; Company
Management
-
Private equity firms Northedge and
RooGreen joined the executive management
of Total Fitness in acquiring the business,
which has 17 locations in northern England
30-Mar-15
Angel's Share Brands / U.S.
Craft Products
Maker of bourbon
whiskey
Bacardi
-
The acquisition allows Bacardi to expand in
the super-premium spirits segment by
entering the bourbon category of the North
American whiskey sector
29-Mar-15
Perrin Brewing / U.S.
Craft Products
Brewer of beer
Oskar Blues Brewery
-
The acquisition by Fireman Capital-backed
Oskar Blues, whose products are distributed
in 42 states, will help Michigan-based Perrin
build its geographic presence
25-Mar-15
Club Pilates / U.S.
Fitness Centers
Operator and
franchisor of Pilates
clubs
LAG Fit
-
LAG Fit, a firm specializing in acquiring and
expanding wellness concepts, acquired 35studio chain Club Pilates
16-Mar-15
MonaVie / U.S.
Supplements
Direct-to-Consumer
Maker of nutritional
products
Jeunesse Global
-
Following the acquisition, Jeunesse, a
healthy living oriented direct selling
company, has a network of 4 million
distributors in over 100 countries
16-Mar-15
Life Time Fitness / U.S.
Fitness Centers
Operator of fitness
clubs
Leonard Green &
Partners; TPG Capital;
LNK Partners
11-Mar-15
My Goodness / U.K.
Supplements
Wholesale
Producer of sports
nutrition and protein
drinks/snacks
Aurivo Co-operative
Society Limited
9-Mar-15
Brand Aromatics / U.S.
Natural, Organic &
Functional
Maker of marinades
and broths
McCormick & Company
9-Mar-15
Natural American Pet Products
and Natural Life Pet Products /
U.S.
Natural Living
Producer of pet foods
9-Mar-15
Full Sail Brewing / U.S.
Craft Products
5-Mar-15
Ritual Wellness / U.S.
Natural, Organic &
Functional
4,071.8
-
The pending deal’s share price represents a
73% premium to the closing price on August
22, 2014, when Life Time announced it was
considering strategic options
The deal provides Ireland-based Aurivo a
significant position in the expanding sports
nutrition and protein drinks/snacks market
in the U.K. and Ireland
63.0
Brand Aromatics, with $28 million in 2014
sales, enhances the breadth of value-added
products in McCormick’s offering for
packaged food companies and restaurants
Arthur Dogswell
-
The acquisition brings vertical integration in
the premium pet treat space to natural pet
food producer Arthur Dogswell
Brewer of beer
Encore Consumer
Capital;
Oregon Craft Brewers
-
Encore Consumer Capital acquired employee
owned Full Sail, which brewed 115,000
barrels in 2014, through its newly formed
investment group Oregon Craft Brewers
Producer of organic
juices
Project Juice
-
The combined company seeks to source
from more farms due to its enhanced scale
__________________
4
Global Healthy Lifestyle and Craft Beer M&A Activity in Q1 (continued)
Target
Deal
Value
($mil)
Date
Announced
Target Name /
Nationality
4-Mar-15
Empire Kosher Poultry
(remaining 80% stake) / U.S.
Natural, Organic &
Functional
Producer of kosher
poultry products
The Hain Celestial
Group
57.6
Empire Kosher, with $100+ million in 2014
sales, expands Hain’s farm to table offerings
2-Mar-15
Citrusource / U.S.
Natural, Organic &
Functional
Supplier of orange juice
and citrus products
SunOpta Grains and
Foods
13.3
The deal is aligned with SunOpta’s strategy
to grow its healthy beverages portfolio
28-Feb-15
Two Virgin Active Gyms in
Glamorgan and Middleton /
U.K.
Fitness Centers
Operator of two fitness
centers
LaSalle Investment
Management
13.9
LaSalle acquired the two Virgin Active
fitness centers to capitalize on the growing
interest in health and fitness in the U.K.
20-Feb-15
Belvedere International /
Canada
Natural Living
Producer of health and
beauty care products
The Hain Celestial
Group
-
Hain established a personal care base in
Canada with the acquisition of Belvedere,
whose Live Clean brand of natural products
fueled annual sales of $25 million
17-Feb-15
Healthy Food Ingredients /
U.S.
Natural, Organic &
Functional
Supplier of organic food
ingredients
Hesco
-
Specialty grain producer Hesco acquired
Healthy Food Ingredients in order to expand
into specialty ingredients for organic foods
16-Feb-15
Enjoy Life Foods / U.S.
Natural, Organic &
Functional
Producer of allergen free
snacks
Mondelez International
-
Enjoy Life Foods fits the strategy of
Mondelez to drive growth in snacking by
expanding its portfolio through allergyfriendly 'free from' offerings
11-Feb-15
JackedPack / U.S.
Supplements
Direct-to-Consumer
Online retailer of health
supplements
IdeoClick
-
E-commerce company IdeoClick acquired
JackedPack, a provider of nutrition
supplement samples, to expand its presence
in nutrition supplements
9-Feb-15
Nutricap Labs / U.S.
Supplements
Wholesale
Manufacturer of
nutraceuticals
Twinlab Consolidated
Holdings, Inc.
9-Feb-15
Native Remedies Inc., Certain
Assets / U.S.
Supplements
Direct-to-Consumer
Marketer of herbal
supplements
4-Feb-15
Yellow Chips BV (51%) /
Netherlands
Natural, Organic &
Functional
30-Jan-15
Eos Fitness Holdings / U.S.
29-Jan-15
Segment
Description
Acquiror
Commentary
12.0
The acquisition is designed to provide more
product options and services for the
customers of Nutricap and Twinlab
Silver Star Brands
(Blyth, Inc.)
-
The acquisition complements the direct-toconsumer portfolio of Silver Star and
enhances its e-commerce market share
Producer of vegetable
and organic chips
Diamond Foods
-
Yellow Chips allows Diamond Foods to
compete more effectively in the high-growth
vegetable chip category in Europe
Fitness Centers
Operator of a chain of
fitness centers
Bruckmann, Rosser,
Sherrill; Performance
Equity Management;
Stellus Capital
-
Eos Fitness, a chain of 16 clubs in the
southwest U.S., was acquired by a private
equity group that includes BRS, which brings
fitness center expertise through prior
ownership of Town Sports International
Krave Pure Foods / U.S.
Natural, Organic &
Functional
Producer of meat-based
snack items
The Hershey Company
-
The acquisition will help Hershey enter the
all-natural meat snacks market and expand
in the broader snacks space. Krave has
trailing full-year sales of about $35 million
27-Jan-15
17 Planet Fitness locations in
New York / U.S.
Fitness Centers
Operator of fitness clubs
Exaltare Capital
Partners; Brightwood
Capital Advisors
-
Private equity firms Exaltare and Brightwood
acquired 17 Planet Fitness sites in New York
from a franchisee, bringing their ownership
of Planet Fitness locations to 52 franchises
23-Jan-15
Elysian Brewing Company /
U.S.
Craft Products
Brewer of beer
Anheuser-Busch InBev
-
The proposed acquisition fits the strategy of
AB InBev, which has acquired two other craft
brewers since the start of 2014
20-Jan-15
Salix Animal Health / U.S.
Natural Living
Producer and distributor
of dog chews, treats
and snacks
Spectrum Brands
Holdings
-
With annual revenue of about $100 million,
Salix enables Spectrum’s pet supplies unit to
expand its dog treats business, leverage
Salix’s enzyme technology and seek new
opportunities in Europe and Latin America
16-Jan-15
Planter's S.p.A. / Italy
Natural Living
Maker of herbal
products and natural
cosmetics
Investor group
-
Italy-based private equity firm DGPA SGR
sold Planter’s to an unspecified investor
group
14-Jan-15
XS Energy / U.S.
Natural, Organic &
Functional
Producer of sugar-free
energy drinks
Amway
-
Amway, the exclusive distributor of XS
Energy since 2003, will expand the brand’s
geographic reach, including in Southeast
Asia. XS Energy is distributed in 38 countries
with annual sales of $150 million
9-Jan-15
Nutritional Laboratories
International / U.S.
Supplements
Wholesale
Producer of nutritional
and dietary
supplements
Elite One Source
Nutrisciences
-
Elite One Source, majority-owned by
Ampersand Capital Partners, acquired NLI
from Praesidian Capital as part of its
strategy to become the leading contract
maker of nutritional and dietary supplements
8-Jan-15
Freedom Fitness Milton
Keynes / U.K.
Fitness Centers
Operator of a fitness
club in Warwick, U.K.
Wealden Leisure
-
U.K.-based Wealden Leisure, which operates
30+ Freedom Leisure fitness centers, added
to its U.K. portfolio with this acquisition
5-Jan-15
Sun Orchard (majority stake)
/ U.S.
Natural, Organic &
Functional
Provider of fruit juices
and beverage products
Centre Partners
Management
-
Sun Orchard brings a premium juice
platform to Centre Partners, which intends to
fuel growth through new product lines and
channels plus select acquisitions
__________________
5
Global Healthy Lifestyle and Craft Beer Private Placements in Q1
Date
Announced
Target Name /
Nationality
Target
Segment
Description
27-Mar-15
The Pulse Beverage
Company / U.S.
Natural, Organic &
Functional
Producer of healthy
beverages
23-Mar-15
Smari Organics / U.S.
Natural, Organic &
Functional
19-Mar-15
Fireman's Brew / U.S.
16-Mar-15
Investment
Amount
($mil)
Type
Investor(s)
Use of Proceeds
$1.0
Equity
Private investors
Expand its operations into
Mexico and Canada, and
support working capital growth
Maker of organic
Icelandic yogurt
3.8
Equity
Private investors
Working capital
Craft Products
Producer of beer and
coffee
5.0
Equity
Private investors
-
Five Star Organics / U.S.
Natural, Organic &
Functional
Maker of organic
candy bars
4.0
Equity
Private investors
-
12-Mar-15
Camden Town Brewery /
U.K.
Craft Products
Brewer of beer
2.7
Equity
Private investors
Fund growth and return
manufacturing to the U.K.
11-Mar-15
Nature Cell / U.S.
Natural, Organic &
Functional
Producer of health
drinks and organic
foods
2.0
Debt
Private investors
Operations
10-Mar-15
Windy Hill Spirits / U.S.
Craft Products
Maker of whiskeys
5.0
Debt
Private investors
-
6-Mar-15
Payette Brewing Company /
U.S.
Craft Products
Brewer of beer
1.3
Equity
Private investors
-
2-Mar-15
Bhakti Chai / U.S.
Natural, Organic &
Functional
Provider of ready-todrink and bottled tea
and coffee products
4.9
Equity
Colorado Impact
Fund and private
investors
Manufacturing facility in
Colorado, sales and marketing,
and national distribution
27-Feb-15
Columbia Phyto Technology
/ U.S.
Supplements
Wholesale
Producer of organic
and conventional
powders
1.5
Debt
Private investors
-
20-Feb-15
True Drinks Holdings / U.S.
Natural, Organic &
Functional
Producer of healthy
beverages
4.3
Equity
Toba Capital
Working capital
12-Feb-15
BAI Brands / U.S.
Natural, Organic &
Functional
Producer of healthy
beverages
15.0
Equity
Private investors
Working capital
9-Feb-15
Pangea Naturals / U.S.
Natural Living
Maker of skincare
products
1.5
Equity
Private investors
-
6-Feb-15
Biena / U.S.
Natural, Organic &
Functional
Maker of chickpea
snacks
1.5
Equity
Private investors
-
1-Feb-15
Wisconsin Brewing Co / U.S.
Craft Products
Brewer of beer
2.0
Equity
Private investors
Working capital and capex
29-Jan-15
Bowen Hayward Group /
U.S.
Craft Products
Brewer of beer
1.2
Debt &
Equity
Private investors
-
29-Jan-15
Westbourne / U.S.
Natural, Organic &
Functional
Producer of organic
popcorn
4.0
Equity
Private investors
-
22-Jan-15
Synergy Strips Corp. / U.S.
Supplements
Wholesale
Producer of orally
dissolving film strips
6.0
Debt &
Equity
Knight
Therapeutics
Acquisition of the Focus Factor
business
20-Jan-15
American Botanicals / U.S.
Supplements
Wholesale
Processor of herbs,
roots and barks
2.7
Equity
Advantage Capital
Partners
Fund growth
20-Jan-15
KonaRed / U.S.
Natural, Organic &
Functional
Maker of beverages
and nutritional
products
1.0
Debt
Group 10 Holdings
-
14-Jan-15
New Oberpfalz Brewing /
U.S.
Craft Products
Brewer of beer
1.0
Equity
Private investors
Pay executives
12-Jan-15
Wright Leisure Limited / U.K.
Fitness Centers
Operator of a chain
of gyms
7.6
Equity
Business Growth
Fund plc
Fund growth
8-Jan-15
Sonoma Beverage Works /
U.S.
Craft Products
Maker of flavored
ciders
1.2
Equity/
Debt
Private investors
-
7-Jan-15
Soylent / U.S.
Weight
Management
Maker of food
replacement products
Equity
Andreessen
Horowitz; Index
Ventures; Lerer
Hippeau Ventures
Expand manufacturing,
shipping, product
development, biotechnology
research and resource
procurement
20.0
Global Healthy Lifestyle and Craft Beer Equity Offerings in Q1
Offer Date
Issuer Name /
Nationality
Issuer
Segment
Description
Offering Type
Gross Offering
Amount ($mil)
Use of Proceeds
4-Mar-15
Sprouts Farmers Market /
U.S.
Health & Wellness
Retail
Retailer of fresh,
natural and organic
food
Follow-on
559.4
-
15-Feb-15
By-health Co. / China
Supplements
Wholesale
Maker of nutritional
supplements
Follow-on
298.9
General corporate purposes and
working capital
_____________________
6
Selected LTM Healthy Lifestyle and Craft Beer M&A Activity
Date
Announced
Target
Target Nationality
Target Description
Acquiror
16-Mar-15
Life Time Fitness
United States
Leonard Green & Partners;
TPG Capital; LNK Partners
5-Dec-14
McCleskey Mills
United States
Provider of shelled peanuts and
seed peanuts
Olam International
21-Nov-14
TIPNESS
Japan
Nippon Television Holdings
26-Oct-14
Chiquita Brands
International
United States
Processor of produce
Banco Safra S.A. and
Sucocitrico Cutrale
15-Oct-14
Deal
Value
($mil)
EV / LTM
Revenue
EBITDA
$4,071.8
3.2x
10.9x
176.0
-
6.0
203.0
0.7
-
1,321.7
0.4
12.6
Penford
United States
Maker of natural ingredient systems
Ingredion
338.5
0.8
12.4
9-Oct-14
New Britain Palm Oil
Papua New Guinea
Producer of palm oil
Sime Darby Plantation
2,010.8
3.4
12.6
24-Sep-14
Green Eagle Holdings
Singapore
Producer of palm oil
PT. BW Plantation, Tbk
880.9
6.1
-
17-Sep-14
So Delicious Dairy Free
United States
Producer of dairy-free frozen
desserts
The WhiteWave Foods
Company
195.0
1.7
-
12-Sep-14
Isopure
United States
Producer of protein powder and
drinks
Glanbia
153.0
2.1
-
8-Sep-14
Annie's
United States
Maker of natural and organic food
products
General Mills
823.0
4.0
38.6
7-Jul-14
WILD Flavors
Switzerland
Maker of natural ingredients, flavors
and colors
Archer Daniels Midland
3,096.5
2.3
-
4-Jul-14
Apple & Eve
United States
Branded juice manufacturer
Lassonde Industries
147.9
-
9.7
2-Jul-14
Vitacost.com
United States
Online retailer of health and
wellness products
The Kroger Co.
281.2
0.6
-
30-Jun-14
Flagstone Foods
United States
Producer of snacks and dried fruits
TreeHouse Foods
875.0
1.2
16.1
11-Jun-14
Healthy Directions, LLC
United States
Maker of nutritional supplements
Helen of Troy
195.0
1.3
8.0
14-Apr-14
DIANA S.A.S.
France
Nutritional and natural-ingredients
foods producer
Symrise AG
1,796.2
2.9
14.0
10-Apr-14
Deoleo SA
Spain
Producer of olive oil, vinegars,
sauces and olives
CVC Capital Partners
1,258.1
1.2
12.5
Mean
2.0x
14.0x
Median
1.5x
12.5x
_____________________
List includes deals with reported values of at least $100 million and a disclosed valuation multiple.
7
Addressable Markets
Natural, Organic & Functional Food & Beverage Market
The Natural, Organic & Functional food and beverage market includes food and beverages classified as natural, organic
or functional by the Nutrition Business Journal. Natural foods and beverages typically focus on the health benefits
derived from natural ingredients. Organic food and beverages generally are produced without chemicals, pesticides,
herbicides, hormones, antibiotics or genetically modified feed crops. Functional foods and beverages are designed to
provide health benefits via the inclusion or combination of certain ingredients.
The U.S. market for Natural, Organic and Functional food and beverage items increased to approximately $104 billion in
2013 from approximately $95 billion in 2012, representing growth of nearly 10% versus an increase of around 3% for
the entire food and beverage market. Natural, Organic and Functional food and beverage sales accounted for 14% of
total U.S. food sales in 2013, up from just over 11% in 2008.
U.S. Natural, Organic & Functional Retail Sales
2007-2013 CAGR: 7.7%
2013-2019 CAGR: 9.1%
$175
$ in billions
$125
$100
$75
$66.7
$74.8
$72.0
$79.6
$86.6
$94.8
$103.9
$114.0 $124.7
$148.3
$174.8
8%
6%
4%
$50
2%
$25
$0
10%
2007
2008
2009
2010
2011
2012
2013
2014E 2015E 2016E 2017E 2018E 2019E
Year-over-year growth
$150
$136.2
$161.2
0%
_____________________
Source: Nutrition Business Journal, Sterling-Rice Group.
Breakdown of 2013 Sector Sales by Category and Channel
Natural Sales by Category
Packaged & Condiments
4%
Prepared
Foods
15%
Dairy
14%
Organic Sales by Category
Fruit &
Vegetables
11%
Snack Foods
8%
Breads &
Grains
15%
Meat, Fish &
Beverages
Poultry
23%
10%
Natural Sales by Channel
Packaged & Condiments
Prepared
4%
Foods
12%
Snack Foods
5%
Meat, Fish, &
Poultry
3% Breads &
Grains
10%
Fruit &
Vegetables
39%
Organic Sales by Channel
Breads &
Grains
13%
Beverages
65%
Functional Sales by Channel
Other, 6%
Retail - Health
& Wellness
32%
Internet 2%
Packaged & Other Dairy
Prepared 1% 5%
Foods
8%
Snack Foods
8%
Beverages
11%
Other 3%
Retail - Mass
63%
Functional Category Sales by Category
Dairy
16%
Other Retail - Health
& Wellness
1%
10% Internet
1%
Retail - Health
& Wellness,
44%
Retail - Mass,
46%
Retail - Mass
88%
Internet, 3%
_____________________
8
Addressable Markets
Supplements Market
The supplements market includes vitamins, minerals, herbs & botanicals, specialty supplements, meal replacements
and sports nutrition products. After an extended period of impressive growth, the U.S. supplements market generated
retail sales of nearly $35 billion in 2013.
U.S. Supplements Retail Sales
2007-2013 CAGR: 6.6%
2013-2019 CAGR: 6.9%
$ in billions
$39.9
$40
$30
$23.8
$25.5
$27.0
$28.2
$30.1
$32.5
$34.9
$42.7
$45.6
$48.7
$52.0
$37.4
6%
4%
$20
2%
$10
$0
8%
2007
2008
2009
2010
2011
2012
2013
2014E 2015E 2016E 2017E 2018E 2019E
$50
0%
_____________________
Sales by Category
Meal
Replacements
12%
Minerals
7%
Sales by Channel
Specialty &
Other
19%
Other
30%
Retail - Health
& Wellness
36%
Sports
Nutrition
13%
Herbs &
Botanicals
17%
Vitamins
32%
Retail - Mass
28%
Internet
6%
_____________________
9
Addressable Markets
Natural Living Products Market
The natural living products market includes personal care, household and pet products classified as natural by the
Nutrition Business Journal. Natural living products focus on the health benefits derived from natural ingredients.
The U.S. natural living products market increased to $18.6 billion in 2013 from $16.9 billion in 2012, representing
expansion of 10%, far outpacing growth for conventional products in the personal care, household and pet segments.
High single-digit annual growth is projected for this market over the next several years.
U.S. Natural Living Product Sales
2007-2013 CAGR: 8.3%
2013-2019 CAGR: 9.0%
15%
30
20
$12.9
$14.2
$13.4
$15.2
$16.9
$18.6
$20.5
$22.4
$24.4
$28.8
$26.6
$31.2
9%
6%
10
0
12%
3%
2008
2009
2010
2011
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
0%
Revenue ($ in billions)
40
_____________________
Personal Care Sales by Category
Cosmetics
6%
Oral Hygiene
4%
Deodorants
3%
Aroma and
Fragrances
5%
Household Sales by Category
Organic
Flowers
2%
Other
5%
Skincare
39%
Natural and
Organic
Household
Cleaners
22%
Hair Products
25%
Personal Care Sales by Channel
Other 18%
Natural and
Specialty
Retail 30%
MM and
Beauty Supply
Discounters
21%
Other Direct
and
Multichannel
NPC Brands
13%
Network
Marketing 18%
Supplies and
Other
10%
Total Organic
Fiber (Linens
and Clothing)
28%
Natural and
Organic Pet
Food
48%
Bath and
Toilet Soap
13%
Pet Sales by Category
Pet
Supplements
45%
Natural and
Organic Food
45%
Household Sales by Channel
Other, 13%
Department
Store,
Boutique,
Salon, and
Spa, 13%
Natural and
Specialty
Retail, 30%
MM and
Beauty Supply
Discounters,
45%
_____________________
10
Addressable Markets
Craft Beer Market
The U.S. craft beer market increased to $14.2 billion in 2013 from $11.9 billion in 2012, representing expansion of
19%, well above the overall growth of the beer market. Craft beer is expected to represent about 20% of market
volume by 2020, quadruple the market share of 2010.
U.S. Craft Beer Revenue and Production Growth
2010-2013 CAGR: 16.4%
2014-2019 CAGR: 12.4%
60
30
20
10
0
$9.0
$10.3
$11.9
2010
2011
2012
$19.3
$17.2
$14.2
$21.9
$24.5
$27.9
$30.9
Barrels (millions)
Revenue ($ in billions)
40
40
20
2013
2014E
2015E
2016E
2017E
2018E
0
2019E
_____________________
Source: Historical and projected revenue figures provided by Mintel; reflects total U.S. sales (on- and off- premises). Barrel production figures apply constant 2013 revenue /
barrel metric (per Brewers Association data) to annual revenue figures.
U.S. Craft Market Share (by Volume)
20.0%
Actual
Projected
Market Share
16.0%
12.0%
8.0%
4.0%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
_____________________
Actual market share figures provided by Brewers Association. Projections assume straight-line growth from 2014 to 2019 to reach anticipated ~20% share by volume.
Number of Breweries
Number of Breweries
3,500
3,000
2,500
2,000
1,500
1,000
500
0
1890
1900
1910
1920
1930
1940
Prohibition
Era
1950
1960
1970
1980
Industry Majors’ Rise to
Dom inance
1990
2000
2010
2013
2014
Resurgence of Craft
Brewing Popularity
_____________________
Source: Brewers Association.
11
Addressable Markets
Fitness Centers Market
The U.S. Fitness Centers market consists of about 30,000 membership-based exercise facilities. Fitness centers
operate as parts of multi-site chains or as single-location entities. Following steady market growth in recent years, the
Fitness Center market exceeds $22 billion in revenue, with aggregate membership of about 53 million.
U.S. Fitness Center Revenue
$27
$24
$21
$18
$15
$12
$9
$6
$3
$0
$19.5
$19.1
$18.5
2013-2019 CAGR: 2.8%
$21.4
$20.3
$21.8
$22.4
$24.4
$23.6
$22.9
$25.1
$25.9
$26.4
6%
5%
4%
3%
2%
1%
2007
2008
2009
2010
2011
2012
2013
2014E 2015E 2016E 2017E 2018E 2019E
0%
$ in billions
2007-2013 CAGR: 3.2%
_____________________
Source: IHRSA and IBISWorld industry reports. Revenue for 2007-2013 is based on IHRSA data. Estimates for 2013-2019 are based on IBISWorld growth projections.
U.S. Fitness Center Membership
2007-2013 CAGR: 2.1%
45
46.7
50.2
45.6
45.3
51.4
52.9
51.3
54.8
54.1
56.0
56.9
58.2
58.8
12%
9%
6%
30
3%
0%
15
0
(3%)
2007
2008
2009
2010
2011
2012
2013
2014E 2015E 2016E 2017E 2018E 2019E
(6%)
Members in millions
60
2013-2019 CAGR: 1.8%
_____________________
Source: IHRSA and IBISWorld industry reports.
Participation Rate by Sport in U.S.
Fitness Sports
61%
Outdoor Sports
49%
Individual Sports
36%
Team Sports
21%
Racquet Sports
13%
Water Sports
12%
0%
10%
20%
30%
40%
50%
60%
70%
_____________________
Source: Physical Activity Council, 2014 Participation Report
12
Addressable Markets
Weight Management Market
The U.S. Weight Management market consists of a variety of products and services designed to promote weight loss
and maintenance. For the purposes of this report, relevant market segments include weight loss centers, meal
replacements, diet pills and drugs, weight loss surgeries and diet-related media (e.g., books, videos). The size of
these segments of the U.S. Weight Management market is estimated at about $10 billion, with more than 100 million
consumers undertaking dieting-related activities each year.
Sales for Selected U.S. Weight Management Market Segments
$12
$10.4
$10.1
$10.2
$10.1
2010
2011
2012
2013
$ in billions
$10
$8
$6
$4
$2
$0
_____________________
Source: Marketdata Enterprise.
Over the past several years, the size of the U.S. Weight Management market has been relatively unchanged. During
the 2010-2013 period, weight loss centers and meal replacements became a larger share of consumer spending in
this market, at the expense of share for surgery and diet-related media.
Wallet Share for Selected U.S. Weight Management Market Segments
2010
2013
Diet Media
12%
Diet Media
11%
Weight Loss
Centers
31%
Weight Loss
Centers
33%
Surgery
28%
Surgery
31%
Meal
Replacements
26%
Meal
Replacements
28%
_____________________
Source: Marketdata Enterprise.
13
Public Company Performance
Kameda Seika
Valuation & Operating Statistics
3/31/2015
($ in millions except per share data)
Ticker
NasdaqGS:BDBD
FRPT
NasdaqGS:HAIN
SET:ICHI
TSE:2220
NasdaqGM:LWAY
NYSE:MJN
NasdaqGS:MNST
TSX:SOY
NYSE:WWAV
Nationality
Price per
Share
Boulder Brands, Inc.
United States
Freshpet, Inc.
United States
The Hain Celestial Group, Inc.
United States
ICHITAN GROUP Public Company Limi Thailand
Kameda Seika CO., Ltd.
Japan
Lifeway Foods Inc.
United States
Mead Johnson Nutrition Company
United States
Monster Beverage Corporation
United States
SunOpta Inc.
Canada
The WhiteWave Foods Company
United States
$9.53
19.43
64.05
0.65
40.71
21.39
100.53
138.40
10.60
44.34
Company Name
% of 52Week High
Mean
Median
Enterprise
Value
Total
Revenue
51.6%
91.4%
96.5%
87.2%
96.0%
95.6%
95.3%
96.2%
82.7%
97.4%
$858.7
614.1
7,254.9
897.3
887.6
352.4
20,624.1
22,377.9
839.2
9,232.5
$516.6
86.8
2,468.9
188.4
794.2
119.0
4,409.3
2,464.9
1,242.6
3,436.6
89.0%
95.5%
$6,393.9
892.4
Last Twelve Month Results
Revenue
Gross
EBITDA
Growth
Profit % Margin %
EBIT
Margin %
PE Ratio
2015E
LTM Valuation Multiples
Total
Revenue
EBITDA
EBIT
2016E
8.2%
26.4%
21.4%
(3.9% )
(11.9% )
16.3%
3.1%
7.2%
9.0%
24.3%
37.0%
48.7%
24.3%
34.4%
43.3%
26.4%
61.4%
54.4%
11.5%
33.6%
11.5%
0.0%
11.9%
25.8%
9.9%
6.5%
24.2%
31.3%
5.3%
11.3%
7.5%
(7.4% )
9.7%
19.9%
4.8%
3.7%
22.1%
30.2%
3.6%
8.1%
36.3 x
N/A
31.8
21.7
27.5
38.9
25.1
41.1
24.1
40.1
27.6 x
48.0
28.4
17.7
26.7
32.9
22.7
34.3
18.1
33.9
1.7 x
7.1
2.9
4.8
1.1
3.0
4.7
9.1
0.7
2.7
14.5 x
N/A
24.6
18.4
11.3
45.9
19.3
29.0
12.7
23.7
22.3 x
N/A
30.3
24.0
23.3
N/A
21.1
30.0
18.9
33.1
10.0%
8.6%
37.5%
35.7%
13.8%
11.4%
10.2%
7.8%
31.8 x
31.8
29.0 x
28.0
3.8 x
3.0
22.2 x
19.3
25.4 x
23.6
_____________________
Source: Capital IQ. Figures and LTM as of March 31, 2015. Figures are as reported and have not been adjusted for recent acquisitions.
Historical Performance
Revenue
3.0x
2.6x
EBITDA
2.6x
3.0x
2.6x
2.5x
1.8x
2.0x
1.5x
1.4x
1.5x
20x
16x
12x
1.0x
8x
0.5x
4x
0.0x
2010 2011 2012 2013 2014 LTM 2015E
2015
0x
17.2x
12.7x
Stock Performance
19.1x 19.3x
17.5x
14.2x
11.8x
130%
S&P 500
HLCB
Natural, Organic & Functional
120%
110%
100%
90%
2010 2011 2012 2013 2014 LTM 2015E
2015
80%
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
_____________________
Median multiples are based on enterprise values as of the end of the period indicated divided by the income statement figure for the period indicated.
14
Supplements Wholesalers and Direct-to-Consumer
3/31/2015
Ticker
Company Name
ENXTAM:DSM
Koninklijke DSM N.V.
NasdaqGS:NUTR
Nutraceutical International Corporation
NYSE:OME
Omega Protein Corporation
NYSE:PRGO
Perrigo Company
NYSE:HLF
Herbalife Ltd.
NasdaqCM:LFVN
Lifevantage Corporation
NasdaqCM:NATR
Nature's Sunshine Products Inc.
NYSE:NUS
Nu Skin Enterprises Inc.
NasdaqGS:RELV
Reliv International, Inc.
NYSE:USNA
USANA Health Sciences Inc.
% of 52Week High
Total
Revenue
EBIT
Margin %
PE Ratio
Total
Revenue
EBITDA
EBIT
Nationality
Netherlands
United States
United States
Ireland
55.83
19.70
13.69
165.55
96.2%
67.6%
86.0%
94.8%
12,563.5
227.9
329.8
25,527.3
11,113.0
216.0
308.6
4,171.5
(11.0% )
3.6%
19.2%
7.4%
26.2%
49.1%
25.1%
34.4%
12.2%
17.4%
22.2%
28.4%
6.6%
11.8%
15.1%
18.6%
19.7 x
12.4
12.0
21.3
17.2 x
12.0
9.4
18.3
1.1
1.1
1.1
6.1
9.3
6.1
4.8
21.5
17.2
9.0
7.1
32.9
Cayman Islands
United States
United States
United States
United States
United States
42.76
0.79
13.12
60.21
1.12
111.12
61.4%
51.0%
71.4%
67.1%
41.8%
93.5%
5,105.7
86.5
187.4
3,525.1
13.6
1,295.5
4,958.6
211.0
366.4
2,569.5
57.3
790.5
(0.1% )
0.7%
(2.9% )
(22.3% )
(10.1% )
8.1%
50.5%
85.5%
75.0%
81.4%
79.7%
82.2%
12.7%
10.6%
6.4%
15.8%
1.8%
15.8%
10.8%
9.5%
5.2%
13.7%
0.2%
14.7%
10.1
6.6
18.7
15.3
N/A
16.6
9.3
N/A
13.7
13.7
N/A
14.7
1.0
0.4
0.5
1.4
0.2
1.6
8.1
3.9
8.0
8.7
12.9
10.4
9.5
4.3
9.8
10.0
N/A
11.2
73.1%
69.5%
$4,886.2
812.7
(0.7%)
0.3%
58.9%
62.8%
14.3%
14.3%
10.6%
11.3%
14.8 x
15.3
13.5 x
13.7
1.5 x
1.1
Mean
Median
Enterprise
Value
Revenue
Gross
EBITDA
Growth
Profit % Margin %
Price per
Share
2015E
2016E
9.4 x
8.4
12.3 x
9.8
_____________________
Revenue
1.5x
1.2x
0.9x
EBITDA
1.1x
0.9x
9.3x
10x
1.3x
1.0x
1.1x
1.1x
0.7x
8x
6x
0.6x
4x
0.3x
2x
0.0x
0x
Stock Performance
8.1x
8.4x
7.9x
115%
S&P 500
HLCB
Supplements
110%
6.5x
4.9x
5.4x
105%
100%
95%
90%
2010 2011 2012 2013 2014 LTM 2015E
2015
85%
80%
2010 2011 2012 2013 2014 LTM 2015E
2015
75%
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
_____________________
15
Health & Wellness Retailers & Distributors
3/31/2015
Ticker
NasdaqGS:TFM
NYSE:GNC
NYSE:NGVC
NasdaqGS:SFM
NasdaqGS:UNFI
NYSE:VSI
NasdaqGS:WFM
Nationality
Price per
Share
United States
United States
United States
United States
United States
United States
United States
$40.64
49.07
27.61
35.23
77.04
41.19
51.95
Company Name
The Fresh Market, Inc.
GNC Holdings Inc.
Natural Grocers by Vitamin Cottage, Inc.
Sprouts Farmers Market, Inc.
United Natural Foods, Inc.
Vitamin Shoppe, Inc.
Whole Foods Market, Inc.
Mean
Median
% of 52Week High
Enterprise
Value
Total
Revenue
96.5%
98.8%
62.8%
91.6%
91.8%
82.7%
90.2%
$1,956.7
5,520.0
647.4
5,644.3
4,385.3
1,267.8
18,114.5
$1,753.2
2,613.2
546.0
2,967.4
7,555.4
1,213.0
14,626.0
87.8%
91.6%
$5,362.3
4,385.3
Revenue
Gross
EBITDA
Growth
Profit % Margin %
EBIT
Margin %
PE Ratio
2015E
Total
Revenue
EBITDA
EBIT
2016E
16.0%
(1.1% )
13.9%
14.7%
17.0%
8.7%
10.0%
33.9%
37.5%
29.0%
29.8%
16.0%
42.5%
35.5%
10.7%
18.7%
8.0%
8.6%
3.7%
12.1%
9.2%
7.2%
16.6%
4.6%
6.8%
3.0%
9.3%
6.6%
21.9 x
15.6
40.9
40.1
24.4
17.2
28.9
19.9 x
13.9
N/A
32.4
21.5
15.1
25.9
1.1 x
2.1
1.2
1.9
0.6
1.0
1.2
10.4 x
11.3
14.9
22.0
15.7
8.6
13.4
15.5 x
12.8
25.6
28.2
19.6
11.2
18.9
12.9%
13.9%
32.0%
33.9%
10.2%
9.2%
7.7%
6.8%
27.0 x
24.4
21.4 x
20.7
1.3 x
1.2
13.7 x
13.4
18.8 x
18.9
_____________________
Revenue
1.8x
1.6x
1.4x
1.2x
1.0x
0.8x
0.6x
0.4x
0.2x
0.0x
1.5x
1.2x
1.3x
EBITDA
16.6x
18x
1.6x
1.2x
15x
1.2x
1.0x
12x
Stock Performance
12.9x 12.4x
14.1x
13.2x 13.4x
115%
12.2x
Retailers & Dis tributors
110%
100%
95%
6x
90%
85%
3x
2010 2011 2012 2013 2014 LTM 2015E
2015
HLCB
105%
9x
0x
S&P 500
80%
2010 2011 2012 2013 2014 LTM 2015E
2015
75%
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
_____________________
16
Craft Products
3/31/2015
Ticker
SAM
BREW
Company Name
Boston Beer Co. Inc.
Craft Brew Alliance, Inc.
Nationality
Price per
Share
United States
United States
$267.40
13.64
% of 52Week High
Mean
Median
Enterprise
Value
Total
Revenue
82.3%
76.2%
$3,490.9
275.1
$903.0
200.0
79.3%
79.3%
$1,883.0
1,883.0
Revenue
Gross
EBITDA
Growth
Profit % Margin %
EBIT
Margin %
PE Ratio
2015E
Total
Revenue
EBITDA
EBIT
2016E
14.7%
7.3%
51.5%
29.4%
20.3%
7.2%
16.4%
2.9%
35.2 x
N/A
29.7 x
37.3
3.9 x
1.4
19.0 x
19.2
23.5 x
48.2
11.0%
11.0%
40.4%
40.4%
13.7%
13.7%
9.6%
9.6%
35.2 x
35.2
33.5 x
33.5
2.6 x
2.6
19.1 x
19.1
35.9 x
35.9
_____________________
Revenue
2.9x
3.0x
EBITDA
2.7x
2.6x
2.5x
2.0x
1.9x
1.7x
1.8x
1.5x
19.4x 19.1x
20x
15x
13.5x
11.5x
115%
16.7x
12.5x
S&P 500
HLCB
Craft Products
110%
105%
100%
95%
10x
1.0x
90%
5x
0.5x
0.0x
24.1x
25x
2.3x
Stock Performance
2010 2011 2012 2013 2014 LTM 2015E
2015
0x
85%
80%
2010 2011 2012 2013 2014 LTM 2015E
2015
75%
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
_____________________
17
Fitness Centers
3/31/2015
Ticker
ASX:AAD
TSE:4801
BMV:SPORT S
NYSE:LTM
BSE:533200
NasdaqGM:CLUB
Company Name
Ardent Leisure Group
Central Sports Co.,Ltd.
Grupo Sports World, S.A.B. de C.V.
Life Time Fitness Inc.
Talwalkars Better Value Fitness Limited
Town Sports International Holdings Inc.
Nationality
Price per
Share
Australia
Japan
Mexico
United States
India
United States
$1.71
18.60
1.48
70.96
5.94
6.81
Mean
Median
% of 52Week High
Enterprise
Value
Total
Revenue
64.2%
92.7%
85.1%
99.1%
90.7%
77.6%
$971.8
292.6
130.8
4,016.2
191.2
457.0
$437.7
424.0
71.9
1,290.6
34.2
453.8
84.9%
87.9%
$1,009.9
374.8
Revenue
Gross
EBITDA
Growth
Profit % Margin %
PE Ratio
EBIT
Margin %
2015E
2016E
Total
Revenue EBITDA
EBIT
(3.6% )
(9.7% )
1.4%
5.2%
9.3%
(2.8% )
70.0%
11.5%
N/A
44.9%
80.7%
57.5%
19.6%
8.8%
19.0%
28.9%
51.4%
11.6%
10.8%
5.7%
8.5%
17.8%
36.9%
1.2%
15.7 x
N/A
21.0
21.5
17.2
N/A
13.5 x
N/A
16.7
19.6
13.8
N/A
2.2 x
0.7
1.8
3.1
5.6
1.0
11.3 x
7.8
9.6
10.8
10.9
8.7
20.6 x
12.1
21.4
17.5
15.2
N/A
(0.0%)
(0.7%)
52.9%
57.5%
23.2%
19.3%
13.5%
9.6%
18.9 x
19.1
15.9 x
15.3
2.4 x
2.0
9.8 x
10.2
17.4 x
17.5
_____________________
Revenue
2.4x
2.5x
2.0x
1.5x
EBITDA
1.9x
1.8x
2.0x
Stock Performance
12x
2.0x
2.0x
1.5x
10x
8x
8.0x
8.9x
7.6x
7.9x
9.0x
10.2x 9.8x
2x
0.0x
0x
2010 2011 2012 2013 2014 LTM 2015E
2015
HLCB
Fitness Centers
125%
120%
110%
4x
0.5x
S&P 500
115%
6x
1.0x
130%
105%
100%
95%
2010 2011 2012 2013 2014 LTM 2015E
2015
90%
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
_____________________
18
Weight Management
3/31/2015
Ticker
NYSE:MED
NasdaqGS:NTRI
NYSE:WTW
Company Name
Medifast Inc.
Nutrisystem, Inc.
Weight Watchers International, Inc.
Nationality
Price per
Share
United States
United States
United States
$29.97
19.98
6.99
% of 52Week High
Mean
Median
Enterprise
Value
Total
Revenue
83.1%
93.1%
23.4%
$311.7
545.0
2,501.2
$285.3
403.1
1,479.9
66.5%
83.1%
$1,119.3
545.0
Revenue
Gross
EBITDA
Growth
Profit % Margin %
EBIT
Margin %
PE Ratio
2015E
2016E
Total
Revenue EBITDA
EBIT
(17.9% )
7.5%
(9.9% )
73.3%
50.6%
54.5%
15.0%
9.2%
24.4%
12.2%
7.3%
21.0%
16.3 x
25.5
11.7
14.4 x
21.1
12.9
1.1 x
1.4
1.7
7.3 x
14.7
6.9
8.9 x
18.6
8.0
(6.8%)
(9.9%)
59.5%
54.5%
16.2%
15.0%
13.5%
12.2%
17.8 x
16.3
16.2 x
14.4
1.4 x
1.4
9.6 x
7.3
11.9 x
8.9
_____________________
Revenue
EBITDA
2.0x
12x
1.6x
1.5x
1.0x
1.2x
0.8x
1.3x
1.4x
1.2x
1.0x
9x
10.8x
8.8x
Stock Performance
10.6x
9.9x
8.0x
130%
8.7x
7.3x
S&P 500
HLCB
Weight Management
125%
120%
115%
6x
110%
105%
0.5x
3x
100%
95%
0.0x
2010 2011 2012 2013 2014 LTM 2015E
2015
0x
90%
2010 2011 2012 2013 2014 LTM 2015E
2015
85%
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
_____________________
19
Same-Store Sales Performance
Health & Wellness Retailers & Distributors
10%
8.5%
6.2%
4.5%
5%
3.0%
1.7%
0%
(5%)
Sprouts Famers Market, Natural Grocers by Vitamin Whole Foods Market, Inc.
Inc.
Cottage, Inc.
The Fresh Market, Inc.
Vitamin Shoppe, Inc.
(3.0% )
GNC Holdings Inc.
_____________________
Source: Capital IQ. Same-Store Sales Performance for Calendar Year Q4.
Fitness Centers
15%
10%
10.2%
9.3%
5%
0.6%
0%
(5%)
Talwalkers Better Value Fitness Limited
Ardent Leisure Group
Life Time Fitness Inc.
(3.9% )
Town Sports International Holdings Inc.
_____________________
Source: Capital IQ. Same-Store Sales Performance for Calendar Year Q4.
20
Equity Capital Markets Overview
Equity Market Commentary
•
The S&P 500, Dow Jones and Nasdaq all fell in
March, while the Russell 2000 was the only
major index to end the month in positive
territory
-
•
Healthcare was the sole S&P sector to
move higher, ending the month up 0.8%,
while materials was the biggest laggard,
falling 5.0%
During Q1, the Dow Jones recorded the most
daily swings of 1% or more since the fourth
quarter of 2011; the increase in volatility
occurred despite below-average volume for the
quarter
Broader Equity Markets
220.0%
200.0%
180.0%
160.0%
140.0%
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
Dec-06
NASDAQ
Russell 2000
S&P 500
DJIA
S&P 500
NASDAQ
Russell 2000
Jan-09
Feb-11
DJIA
March '15
(2.0%)
(1.7%)
(1.3%)
1.6%
2015
(0.3%)
0.4%
3.5%
4.0%
Mar-15
Mar-13
_____________________
Source: FactSet. As of March 31, 2015.
IPO Market Commentary
•
•
•
The IPO market was quiet, with 8 IPOs pricing
in March, raising $1.5 billion; this brings the Q1
total to 30 IPOs raising $5.6 billion, compared
to 68 IPOs raising $12.1 billion in Q1 2014
Demand for IPOs during Q1 was strong, with
30% pricing above their filing range, compared
to 18% during Q1 2014
Given the backdrop of elevated volatility,
aftermarket performance in Q1 has pulled back,
with average offer to 1-day and offer to 30-day
at 12.2% and 18.5% respectively, compared to
19.4% and 33.4% during the same 2014 period
Monthly IPO Pricing Activity
36
30
30
30
33
27
24
26
22
26
Average = 20
18
16
12
14
13
9
9
8
6
0
Mar- Apr- May- Jun14
14
14
14
Jul14
Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar14
14
14
14
14
15
15
15
_____________________
Source: Dealogic. As of March 31, 2015.
Excludes Closed End Funds and deals under $15 million.
Follow-on Market Commentary
•
•
•
Driven by Healthcare, Energy and Financial
Services, March was a record month, as 102
offerings priced, raising $37.1 billion, bringing
the YTD total to 227 offerings
The median file-to-offer discount declined for a
second consecutive month to 3.5%, bringing
the YTD median to 4.1%, the same level seen
in all of 2014
Bought deals were extremely prevalent in
March, as 42% of all follow-on offerings were
bought deals, compared to 15% last month and
25% for 2014
Monthly Follow-on Pricing Activity
120
100
102
90
80
60
72
68
51
40
Average = 60 63
50
31
58
57
31
67
38
20
0
Mar- Apr- May- Jun14 14
14
14
Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar14
14
14
14
14
14
15 15
15
_____________________
Source: Dealogic. As of March 31, 2015.
Excludes Closed End Funds and deals under $15 million.
21
Recently Priced IPOs
IPO Valuation Statistics: 2010 – YTD 2015
(In millions, except per share data)
Median of
Precedents
Valuation Data
Sector
Natural/
Organic &
Functional
Health &
Wellness
Retailer
Healthy Living
Packaged
Foods
Health &
Wellness
Retailer
Health &
Wellness
Retailer
Health &
Wellness
Retailer
-
IPO Date
7-Nov-14
31-Jul-13
25-Oct-12
24-Jul-12
31-Mar-11
4-Nov-10
-
$12.00 - 14.00
$14.00 - 16.00
$14.00 - 16.00
$13.00 - 15.00
$15.00 - 17.00
$18.00 - 20.00
-
IPO Price
$15.00
$18.00
$17.00
$15.00
$16.00
$22.00
-
Post-Deal Market Cap.
$500.4
$2,635.8
$2,941.0
$335.2
$1,656.8
$1,055.8
$1,356.3
31-Dec-13
31-Dec-13
31-Dec-12
31-Dec-11
31-Dec-11
-
Initial Filing Range
Forward Year Ending
Long-term EPS Growth
30.0%
25.4%
17.3%
21.5%
11.9%
14.0%
19.4%
P/E - Forward Year at Pricing
73.2x
32.7x
23.6x
32.6x
13.0x
21.4x
28.1x
PEG - at Pricing
2.44x
1.09x
1.35x
1.16x
0.87x
0.97x
1.1x
P/E - NTM
191.6x
40.1x
40.1x
40.9x
15.6x
21.9x
40.1x
EV/EBITDA - NTM
16.6x
17.6x
18.8x
13.0x
10.4x
9.0x
14.8x
$74.2
$2,071.2
$2,157.6
$316.6
$1,822.2
$940.7
($34.4)
$36.3
$117.6
$7.8
$96.6
$38.0
Operating Data
LTM Revenue at Pricing
LTM Net Income at Pricing
$1,381.5
$37.1
Aftermarket Performance
Offer to 1 Day
27.4%
122.8%
(1.5%)
19.1%
4.7%
46.0%
23.3%
Offer to 1 Month
12.5%
105.3%
(6.2%)
30.5%
19.1%
73.6%
24.8%
Offer to Current
29.5%
95.7%
160.8%
84.1%
206.7%
84.7%
90.2%
_____________________
Source: Capital IQ, company filings and Wall Street research. As of March 31, 2015.
22
Baird’s Healthy Lifestyle and Craft Beer Transaction Experience
*
*
Undisclosed Value
Undisclosed Value
$257,500,000
A Portfolio Company of
*
Preferred Equity
$68,900,000
Common Stock
Private Placement
Initial Public Offering
Undisclosed Value
Undisclosed Value
Inv estment in
Sale to
Sale of 30% stake to
Sale to
Financing
Undisclosed Value
$179,687,505
Common Stock
$491,280,000
Common Stock
$1,400,000,000
Sale to
$147,857,145
Common Stock
$77,500,000
Common Stock
Follow-on Offering
*
*
$49,400,000
Common Stock
*
Undisclosed Value
Undisclosed Value
Undisclosed Value
Acquisition of 48% of
Minority Investment in
Sale to
$190,000,000
Undisclosed Value
Undisclosed Value
Undisclosed Value
*
*
Acquisition of
Alliance with
Sale to
$150,000,000
Common Stock
Undisclosed Value
$168,536,548
Common Stock
$210,205,224
Common Stock
$177,828,296
Common Stock
Follow-on Offering
Follow-on Offering
Sale to
$100,624,980
Common Stock
_____________________
Note: The transactions noted were selected for their relevance and are not indicative of all Baird transactions. Asterisk indicates a transaction executed by senior Baird team
members at prior firms dating back to 1995. Please visit www.rwbaird.com/investment-banking for a complete list of Baird’s transactions.
23
Global Investment Banking Contact List
Brian S. Doyal
Brian P. McDonagh
Rodney L. Jones-Tyson
Richard F. Waid
C.H. Randolph Lyon
Co-Head of Global
Investment Banking
+1.312.609.4916
[email protected]
Co-Head of Global
Investment Banking
+1.704.553.6611
[email protected]
Managing Director
Chief Operating Officer
+1.312.609.4984
[email protected]
Vice Chairman
+1.404.264.2210
[email protected]
Vice Chairman
+1.312.609.4931
[email protected]
Technology & Services
Peter S. Kies
Managing Director
Head of Technology &
Services Investment
Banking
+1.414.765.7262
[email protected]
Stephen B. Guy
Managing Director
+1.414.765.7247
[email protected]
Christopher W. Hildreth
Managing Director
+1.312.609.4937
[email protected]
Michael Horwitz
Managing Director
+1.415.627.3284
[email protected]
John R. Lanza
Managing Director
+1.414.298.7669
[email protected]
Mike Magluilo
Managing Director
+1.303.551.4673
[email protected]
John Moriarty
Managing Director
+1.650.424.3811
[email protected]
Kiran Paruchuru
Managing Director
+1.414.298.7642
[email protected]
Breton A. Schoch
Managing Director
+1.312.609.4965
[email protected]
Andrew K. Snow
Managing Director
+1.312.609.4972
[email protected]
Ross W. Williams
Managing Director
+1.414.298.6235
[email protected]
Daniel M. Alfe
Director
+1.312.609.4922
[email protected]
Peter Augar
Director
+44.207.667.8263
[email protected]
.
Industrial
Consumer
Healthcare
Paul T. Rogalski
Managing Director
Head of Industrial
Investment Banking
+1.312.609.4912
[email protected]
Brian P. McDonagh
Managing Director
Head of Consumer
Investment Banking
+1.704.553.6611
[email protected]
Brian S. Doyal
Managing Director
Head of Healthcare
Investment Banking
+1.312.609.4916
[email protected]
Christopher C. McMahon
Managing Director
Head of Global M&A
+1.312.609.4983
[email protected]
Andrew Martin
Managing Director
+1.704.553.6615
[email protected]
Rob Andrews
Managing Director
+1.312.609.5489
[email protected]
Nicholas Pavlidis
Managing Director
+1.312.609.4977
[email protected]
Benjamin A. Brown
Managing Director
+1.414.298.7013
[email protected]
Brian P. McDonagh
Managing Director
Co-Head of Global M&A
+1.704.553.6611
[email protected]
Justin T. Albert
Managing Director
+1.303.270.6381
[email protected]
Joel A. Cohen
Managing Director
+1.312.609.4924
[email protected]
Christopher R. Cooper
Managing Director
+1.704.553.6610
[email protected]
Adam W. Czaia
Managing Director
+1.414.298.7358
[email protected]
Stephen B. Guy
Managing Director
+1.414.765.7247
[email protected]
Jason P. Kliewer
Managing Director
+1.813.273.8242
[email protected]
Thomas E. Lange
Managing Director
+1.813.273.8248
[email protected]
Michael Lindemann
Managing Director
+1.414.298.7408
[email protected]
Joseph T. Packee
Managing Director
+1.414.298.7644
[email protected]
Trisha K. Renner
Managing Director
+1.303.270.6347
[email protected]
Jordan Klein
Director
+1.312.609.4978
[email protected]
Christian Colucci
Director
+1.312.609.4475
[email protected]
John Sun
Director
+44.207.667.8224
[email protected]
Yong-Jae Kim
Director
+1.312.609.4939
[email protected]
Joe Pellegrini
Managing Director
+1.704.553.6612
[email protected]
Kurt M. Roth
Managing Director
+1.312.609.4689
[email protected]
Christopher J. Sciortino
Managing Director
+1.312.609.4923
[email protected]
Katie J. Melzer
Director
+1.415.627.3272
[email protected]
Robert Rosenfeld
Director
+1.312.609.4971
[email protected]
Matt Tingler
Director
+1.312.609.4470
[email protected]
Maria Watts
Director
+1.312.609.4743
[email protected]
Real Estate
Steven Goldberg
Managing Director
+1.703.918.7808
[email protected]
James O’Brien
Managing Director
+1.703.918.7814
[email protected]
Jeff Rogatz
Managing Director
+1.703.918.7823
[email protected]
Adam Lefkowitz
Director
+1.703.918.7817
[email protected]
Tom O’Hare
Director
+1.202.303.1811
[email protected]
Ryan Mausehund
Managing Director
+1.650.858.3817
[email protected]
David S. Schechner
Managing Director
+1.617.426.5424
[email protected]
Bill Suddath
Managing Director
+1.404.264.2222
[email protected]
Manish Gupta
Director
+1.414.765.3802
[email protected]
Chad W. Moore, CPA, CFA
Director
+1.312.609.5475
[email protected]
Energy
Richard F. Waid
Vice Chairman
+1.404.264.2210
[email protected]
Curtis Goot
Managing Director
+1.314.445.6540
[email protected]
John R. Lanza
Managing Director
+1.414.298.7669
[email protected]
Frank Murphy
Managing Director
+1.314.445.6532
[email protected]
Nick Alfermann
Director
+1.314.445.6531
[email protected]
Kjell Lundal
Director
+1.314.445.6533
[email protected]
Financial Services
Mark C. Micklem
Managing Director
+1.703.821.5787
[email protected]
Paul Egge
Director
+1.202.303.1816
[email protected]
Financial Sponsors
Debt Advisory
C. Christopher Coetzee
Managing Director
+1.312.609.4913
[email protected]
Howard P. Lanser
Managing Director
+1.312.609.5478
[email protected]
Leslie Cheek IV
Managing Director
+1.617.426.5789
[email protected]
Paul Bail
Managing Director
+44.207.667.8271
[email protected]
Vinay Ghai
Managing Director
+44.207.667.8225
[email protected]
Thomas W. Lacy
Managing Director
+1.414.298.7648
[email protected]
John Moriarty
Managing Director
+1.650.424.3811
[email protected]
Jeffrey M. Seaman
Managing Director
+1.312.609.4687
[email protected]
David M. Wierman
Managing Director
+1.404.264.2211
[email protected]
Mergers & Acquisitions
Christopher C. McMahon
Managing Director
Head of Global M&A
+1.312.609.4983
[email protected]
Brian P. McDonagh
Managing Director
Co-Head of Global M&A
+1.704.553.6611
[email protected]
Owen L. Hart
Managing Director
+1.415.627.3273
[email protected]
Howard P. Lanser
Managing Director
+1.312.609.5478
[email protected]
Satoshi Matsumoto
Managing Director
Director of Japan M&A
+1.312.609.5446
[email protected]
J. David Cumberland, CFA
Director, M&A Research
+1.312.609.5429
[email protected]
Equity Capital Markets
Greg Ingram
Managing Director
+1.415.627.3279
[email protected]
Lance R. Lange
Managing Director
+1.414.765.7079
[email protected]
Europe
London†
David M. Silver
Managing Director
Head of European
Investment Banking
+44.207.667.8216
[email protected]
John A. Fordham
Chairman of Baird
International
+44.207.667.8438
[email protected]
Paul Bail
Managing Director
+44.207.667.8271
[email protected]
Vinay Ghai
Managing Director
+44.207.667.8225
[email protected]
Jonathan Harrison
Managing Director
+44.207.667.8414
[email protected]
Nicholas R. Sealy
Managing Director
+44.207.667.8370
[email protected]
Martin Luen
Director
+44.207.667.8381
[email protected]
Frankfurt
Joachim Beickler
Managing Director
+49.69.13.01.49.51
[email protected]
Michael Wolff
Managing Director
+49.69.13.01.49.49
[email protected]
Sven Harmsen
Director
+49.69.13.01.49.56
[email protected]
Asia
Shanghai
Anthony Siu
Managing Director
Head of Asia Investment
Banking
+86.21.6182.0980
[email protected]
Gary R. Placek
Managing Director
+1.414.765.3611
[email protected]
Ryan Engelhardt
Director
+1.414.298.2637
[email protected]
† Robert W. Baird Limited is authorized and regulated by the Financial Conduct Authority.
24
Appendix – Disclaimers and Other Disclosures
DISCLAIMERS
This is not a complete analysis of every material fact regarding any company, industry or security. The opinions
expressed here reflect our judgment at this date and are subject to change. The information has been obtained from
sources we consider to be reliable, but we cannot guarantee the accuracy.
ADDITIONAL INFORMATION ON COMPANIES MENTIONED HEREIN IS AVAILABLE UPON REQUEST
The Dow Jones Industrial Average, S&P 500, S&P 400 and Russell 2000 are unmanaged common stock indices used to
measure and report performance of various sectors of the stock market; direct investment in indices is not available.
Baird is exempt from the requirement to hold an Australian financial services license. Baird is regulated by the United
States Securities and Exchange Commission, FINRA, and various other self-regulatory organizations and those laws
and regulations may differ from Australian laws. This report has been prepared in accordance with the laws and
regulations governing United States broker-dealers and not Australian laws.
Copyright 2015 Robert W. Baird & Co. Incorporated. No part of this publication may be reproduced or
distributed in any form or by any means without our prior written approval. However, you may download
one copy of the information for your personal, non-commercial viewing only, provided that you do not
remove or alter any trade mark, copyright or other proprietary notice.
OTHER DISCLOSURES
UK disclosure requirements for the purpose of distributing this report into the UK and other countries for
which Robert W Baird Limited holds an ISD passport.
This report is for distribution into the United Kingdom only to persons who fall within Article 19 or Article 49(2) of the
Financial Services and Markets Act 2000 (financial promotion) order 2001 being persons who are investment
professionals and may not be distributed to private clients. Issued in the United Kingdom by Robert W Baird Limited,
which has offices at Finsbury Circus House 15 Finsbury Circus, London, EC2M 7EB, and is a company authorized and
regulated by the Financial Conduct Authority.
Robert W Baird Limited ("RWBL") is exempt from the requirement to hold an Australian financial services license.
RWBL is regulated by the Financial Conduct Authority ("FCA") under UK laws and those laws may differ from
Australian laws. This document has been prepared in accordance with FCA requirements and not Australian laws.
25
www.rwbaird.com
800.RW.BAIRD
Equity Capital Markets and Private Equity Office Locations
Atlanta
One Buckhead Plaza
3060 Peachtree Road
Suite 1815
Atlanta, GA 30305
London*
Finsbury Circus House
15 Finsbury Circus
London EC2M 7EB
UK
Boston
One Post Office Square
Suite 3617
Boston, MA 02109
Milwaukee
777 East Wisconsin Avenue
Milwaukee, WI 53202
St. Louis
8000 Maryland Avenue
Suite 500
St. Louis, MO 63105
Nashville
2525 West End Avenue
Suite 1000
Nashville, TN 37203
Stamford
100 First Stamford Place
3rd Floor
Stamford, CT 06902
New York City
3 Rockefeller Plaza
610 Fifth Avenue
New York, NY 10020
Tampa
3000 Bayport Drive
Suite 760
Tampa, FL 33607
Palo Alto
1661 Page Mill Road
Suite A
Palo Alto, CA 94304
Washington, D.C.
1717 K Street NW
Suite 910
Washington, DC 20006
Boulder
One Boulder Plaza
1301 Canyon Boulevard – Suite 220
Boulder, CO 80302
Charlotte
6000 Fairview Road
Suite 1100
Charlotte, NC 28210
Chicago
227 West Monroe Street
Suite 2100
Chicago, IL 60606
Denver
210 University Boulevard
Suite 700
Denver, CO 80206
Frankfurt*
Neue Mainzer Strasse 28
60311 Frankfurt
Germany
Shanghai*
Rm 42-022, 42/F, Hang Seng Bank Tower
No.1000 Lujiazui Ring Road
Pudong Shanghai 200120, China
San Francisco
50 California Street
Suite 450
San Francisco, CA 94111
555 California Street
Suite 4900
San Francisco, CA 94104
*Baird and its operating affiliates have offices in the United States, Europe and Asia.
Robert W. Baird & Co. Incorporated. Member SIPC.
Robert W. Baird Ltd. and Baird Capital Partners Europe are authorized and regulated in the UK by the Financial Conduct Authority.
©2015 Robert W. Baird & Co. Incorporated.

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