FOOD & BEVERAGE MERGER & ACQUISITION PERSPECTIVES …...The food & beverage market continues to...

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FOOD & BEVERAGE MERGER & ACQUISITION PERSPECTIVES

1H 2019

bkdcapitaladvisors.com

OVERVIEW & OUTLOOK

The food & beverage market continues to evolve at a rapid pace as

consumers increase demand for satisfying & better-for-you

products. From an M&A perspective, the food and beverage sector

has been highly active as new entrants seek growth capital and

mature CPG conglomerates seek to diversify their portfolio of

legacy brands with high-growth, specialty assets. Notable food

transactions in the last twelve months include PepsiCo’s acquisition

of Bare Foods, a baked fruit and veggie chip manufacturer, and

Health Warrior, a plant-based superfood snack bar manufacturer;

Hershey’s acquisition of Pirate Brands, maker of Pirate's Booty, for

$240 million; and Mondalez International’s acquisition of Perfect

Bar, a protein bar manufacturer. In the beverage category,

investment activity in specialty coffee products has been highly

active, supported by a broad base of domestic and international

acquirers. Notable transactions in the last twelve months include

TSG Consumer’s investment in Dutch Bros, a 300-unit coffee

retailer; Coca-Cola’s $5.1 billion acquisition of 4,000-unit coffee

retailer Costa Coffee and Jollibee’s acquisition of Coffee Bean &

Tea Leaf for $350 million.

FOOD & BEVERAGE M&A PERSPECTIVES 1H 2019

2

CONTENTS

Transaction Activity

Public Comparables

BKD Services

About BKD Capital Advisors

ABOUT BKDCA

Founded in 1994, BKD Capital

Advisors helps companies and

stockholders go beyond their

numbers by creating value

through investment banking

solutions that include mergers,

acquisitions, sales,

recapitalizations, management

buyouts and financings.

F&B CONTACTS

Source: S&P Capital IQ

Tony Schneider

Managing Director

Indianapolis, IN

317.383.4000

[email protected]

Ernest Hunter II

Vice President

Houston, TX

713.499.4600

[email protected]


243

187

249

274 283 275

309325

335

365344

154

182

F&B Total Deals2008 – 1H 2019

mailto:[email protected]


TRANSACTION ACTIVITY


3


Most Active Strategic Buyers FY 2018 – 1H 2019

Investment

DateTarget

Vintage Wine Estates

3/19/19 Laetitia Vineyard & Winery, Inc.

3/05/19 Alloy Wine Works, LLC

11/05/18 Qupe Wine Cellars

1/14/18 Tamarack Cellars

Constellation Brands

5/02/19 Nelson’s Green Brier Distillery, LLC

7/10/18 Four Corners Brewing Co LLC

1/05/18 Copper & Kings American Brandy Co.

1/05/18 Real McCoy Spirits, Corp.

Kettle Cuisine, LLC

4/15/19 Stockpot Soup Facility of The Campbell Soup Co.

4/8/19 The Harris Soup Company, Inc.

9/24/18 Frozen Soup Business of NORPAC Foods

Keurig Dr. Pepper Inc.

9/27/18 Core Nutrition, LLC

7/13/18 Big Red, Inc.

1/29/18 Dr Pepper Snapple Group, Inc.

Most Active Private Equity BuyersFY 2018 – 1H 2019

Investment

DateTarget

Wind Point Partners

3/29/19 Van Law Food Products

3/21/19 Turkey Creek Snacks

9/5/18 Sabra Dipping (Salsa)

6/1/18 Pestell Group

Peak Rock Capital

3/19/19 Turkey Hill Business of The Kroger Co.

10/24/18 Pretzels, Inc.

10/09/18 Louisiana Fish Fry Products LTD

08/09/18

Pizza Crust Business of Tyson Foods, Inc. (TNT

Crust, Inc.)

Alpine Pacific Capital

06/07/2018 Farmington Fresh Cuts

04/04/18 Fresh Innovations California, LLC

Highlander Partners

07/06/18 Queen City Candy, Inc.

01/16/18 Kernel Season’s LLC

Kainos Capital

12/22/18 good2grow LLC

01/12/18 Culinarte Marketing Group LLC


13

23

10

24

27

14

15

16

20

44

Dairy & Protein

Non-Alcoholic Beverages

Produce, Ingredients & Co-Packers

CPG Foods

Alcoholic Beverages

Number of Deals by Segment

1H 2019 1H 2018

11%

89%

1H 2019 Deals by Buyer Type

Private

Equity

Strategic

15.8x

12.9x

14.1x

11.5x

15.1x

17.5x

AlcoholicBeverages

Non-AlcoholicBeverages

CPG Foods

Natural &Organic

Dairy &Proteins

Produce,Ingredients

& Co-Packers

LTM EV/EBITDA

13.3x

13.6x

13.9x

13.7x

11.5x

13.0x

NTM EV/EBITDA

PUBLIC COMPARABLES


4



-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

F&B Segments vs. S&P 500Price Change

Alcoholic Beverages Dairy & Proteins Non-Alcoholic Beverages

Produce, Ingredients & Co-Packers CPG Foods Natural & Organic

S&P 500

9.0x

11.0x

13.0x

15.0x

17.0x

Food & Beverage Segments vs. S&P 500EV/EBITDA

Alcoholic BeveragesS&P 500Non-Alcoholic BeveragesDairy & ProteinsCPG FoodsProduce, Ingredients & Co-PackersNatural & Organic

PUBLIC COMPARABLES


5



Company Ticker

Recent

Price

8/15/2019

Shares

Outstanding

TTM

Revenue

TTM

EBITDA

Enterprise

Value

Market

Cap

EBITDA

Margin

EV to

Sales

EV to

EBITDA

Anheuser-Busch InBev SA/NV ABI $93.84 1,959 54,084$ 22,521$ 293,516$ 183,863$ 41.64% 5.43 13.03

Diageo plc DGE 41.38 2,367 15,588 5,375 114,199 97,925 34.48% 7.33 21.25

Ambev ABEV 4.68 15,727 12,923 5,165 71,596 73,591 39.96% 5.54 13.86

Constellation Brands, Inc. STZ 194.4 191 8,166 3,007 51,240 37,025 36.82% 6.27 17.04

Brown-Forman Corporation BF.B 57.02 478 3,324 1,179 29,172 27,039 35.47% 8.78 24.74

Molson Coors Brewing Company TAP 50.86 216 10,605 2,217 20,610 11,043 20.91% 1.94 9.30

The Boston Beer Company, Inc. SAM 408.55 12 1,102 195 4,973 4,894 17.73% 4.51 25.45

MGP Ingredients, Inc. MGPI 47.91 17 380 59 862 816 15.60% 2.27 14.56

Craft Brew Alliance, Inc. BREW 13.12 20 204 9 329 255 4.16% 1.61 38.66

Willamette Valley Vineyards, Inc. WVVI 6.77 5 24 5 57 34 22.55% 2.43 10.79

4.97 15.80

4.61 18.87

5.88 16.54

4.51 25.45

2.10 21.34

Average Large Cap (Over $10B)

Average Mid Cap ($2B - $10B)

Average Small Cap (Under $2B)

Top 10 Alcoholic Beverage Comparables by Market Capitalizationin millions of dollars

Top 10 Median

Top 10 Average

Top 10 Alcoholic Beverage Comparables by Market Capitalization

Top 10 Non-Alcoholic Beverage Comparables by Market Capitalization

Company Ticker

Recent Price

8/15/2019

Shares

Outstanding

TTM

Revenue

TTM

EBITDA

Enterprise

Value

Market

Cap

EBITDA

Margin

EV to

Sales

EV to

EBITDA

The Coca-Cola Company KO $53.87 4,276 $32,828 $10,736 265,559$ $230,350 32.70% 8.09 24.74

PepsiCo, Inc. PEP 130.72 1,398 65,342 12,818 211,926 182,769 19.62% 3.24 16.53

Monster Beverage Corporation MNST 56.95 545 3,990 1,423 29,808 31,031 35.66% 7.47 20.95

Fomento Económico Mexicano FEMSA UBD 8.63 3,578 24,793 3,137 36,769 28,753 12.65% 1.48 11.72

Coca-Cola FEMSA, S.A.B. de C.V. KOF 57.82 210 9,572 1,811 15,255 12,147 18.92% 1.59 8.42

TreeHouse Foods, Inc. THS 50.07 56 5,427 482 5,302 2,814 8.87% 0.98 11.01

The Hain Celestial Group, Inc. HAIN 21.09 104 2,364 170 2,921 2,197 7.18% 1.24 17.20

National Beverage Corp. FIZZ 41.38 47 1,014 195 1,769 1,930 19.27% 1.74 9.05

Primo Water Corporation PRMW 12.25 39 302 48 674 475 15.76% 2.23 14.16

Reed's, Inc. REED 2.10 34 38 (11) 79 71 -28.91% 2.05 -7.09

1.90 12.94

3.01 12.67

2.95 13.73

1.49 13.13

1.62 8.22

in millions of dollars

Top 10 Median

Top 10 Average




PUBLIC COMPARABLES


6



Company Ticker

Recent Price

8/15/2019

Shares

Outstanding TTM Revenue

TTM

EBITDA

Enterprise

Value

Market

Cap

EBITDA

Margin

EV to

Sales

EV to

EBITDA

Mondelez International, Inc. MDLZ $53.78 1,442 $25,661 $4,843 96,753$ $77,559 18.87% 3.77 19.98

General Mills, Inc. GIS 54.33 604 16,865 3,619 47,693 32,788 21.46% 2.83 13.18

McCormick & Company, Incorporated MKC 169.00 133 5,426 1,104 26,933 22,395 20.35% 4.96 24.39

Hormel Foods Corporation HRL 41.39 534 9,589 1,347 21,704 22,096 14.04% 2.26 16.12

Kellogg Company K 63.52 341 13,769 2,370 31,635 21,637 17.21% 2.30 13.35

Conagra Brands, Inc. CAG 28.85 487 9,538 1,955 24,558 14,039 20.50% 2.57 12.56

Campbell Soup Company CPB 42.16 301 10,071 1,954 21,784 12,697 19.40% 2.16 11.15

Post Holdings, Inc. POST 95.78 73 5,868 1,179 13,300 6,998 20.08% 2.27 11.28

Flowers Foods, Inc. FLO 22.60 212 4,044 409 6,079 4,780 10.11% 1.50 14.87

Lancaster Colony Corporation LANC 154.83 28 1,292 212 4,071 4,259 16.37% 3.15 19.24

J&J Snack Foods Corp. JJSF 192.19 19 1,175 165 3,425 3,621 14.02% 2.91 20.78

Cal-Maine Foods, Inc. CALM 41.81 49 1,361 103 1,722 2,036 7.54% 1.27 16.77

B&G Foods, Inc. BGS 19.08 65 1,665 291 3,075 1,247 17.50% 1.85 10.56

Farmer Bros. Co. FARM 13.18 17 603 33 336 225 5.44% 0.56 10.25

Rocky Mountain Chocolate Factory RMCF 9.06 6 35 5 52 54 14.45% 1.51 10.44

2.26 14.11

2.27 15.58

2.98 15.82

2.22 16.591.09 13.89

Average Mid Cap ($2B - $10B)Average Small Cap (Under $2B)

Top 10 CPG Food Comparables by Market Capitalization


Top 10 Median

Top 10 Average


Company Ticker

Recent Price

8/15/2019

Shares

Outstanding

TTM

Revenue

TTM

EBITDA

Enterprise

Value

Market

Cap

EBITDA

Margin

EV to

Sales

EV to

EBITDA

Darling Ingredients Inc. DAR $18.64 165 $3,328 $403 $4,844 $3,071 12.12% 1.46 12.01

The Hain Celestial Group, Inc. HAIN 21.09 104 2,364 170 2,921 2,197 7.18% 1.24 17.20

Sprouts Farmers Market, Inc. SFM 17.74 118 5,428 341 3,725 2,095 6.28% 0.69 10.92

Calavo Growers, Inc. CVGW 88.40 18 1,121 78 1,580 1,556 6.92% 1.41 20.36

United Natural Foods, Inc. UNFI 6.92 53 17,572 383 3,556 365 2.18% 0.20 9.28

Limoneira Company LMNR 18.59 18 139 8 437 330 5.48% 3.15 57.49

Natural Grocers by Vitamin Cottage, Inc. NGVC 8.93 23 894 47 249 201 5.27% 0.28 5.29

SunOpta Inc. SOY 2.19 88 1,227 34 834 193 2.75% 0.68 24.74

RiceBran Technologies RIBT 2.39 34 21 (10) 79 82 -46.12% 3.82 -8.27

Reed's, Inc. REED 2.10 34 38 (11) 79 71 -28.91% 2.05 -7.09

1.32 11.46

1.50 14.19

1.13 13.38

1.66 14.54Average Small Cap (Under $2B)

Top 10 Natural & Organic Comparables by Market Capitalization


Top 10 Median

Top 10 Average


Top 10 CPG Food Comparables by Market Capitalization

Top 10 Natural & Organic Comparables by Market Capitalization

PUBLIC COMPARABLES


7



Top 10 Dairy & Protein Comparables by Market Capitalization

Company Ticker

Recent

Price

8/15/2019

Shares

Outstanding

TTM

Revenue

TTM

EBITDA

Enterpris

e Value

Market

Cap

EBITDA

Margin

EV to

Sales

EV to

EBITDA

McCormick & Company, Incorporated MKC $169.00 133 $5,426 $1,104 26,933$ $22,395 20.35% 4.96 24.39

Pilgrim's Pride Corporation PPC 28.42 249 10,922 804 9,190 7,085 7.36% 0.84 11.43

Ingredion Incorporated INGR 75.21 67 5,730 922 6,939 5,019 16.09% 1.21 7.53

Darling Ingredients Inc. DAR 18.64 165 3,328 403 4,844 3,071 12.12% 1.46 12.01

Sensient Technologies Corporation SXT 64.44 42 1,354 247 3,395 2,727 18.26% 2.51 13.73

Calavo Growers, Inc. CVGW 88.40 18 1,121 78 1,580 1,556 6.92% 1.41 20.36

Fresh Del Monte Produce Inc. FDP 25.46 48 4,509 193 2,118 1,231 4.29% 0.47 10.96

John B. Sanfilippo & Son, Inc. JBSS 80.31 11 871 67 980 915 7.68% 1.12 14.64

Limoneira Company LMNR 18.59 18 139 8 437 330 5.48% 3.15 57.49

Bridgford Foods Corporation BRID 36.23 9 182 13 335 329 6.94% 1.85 26.61

Landec Corporation LNDC 10.43 29 558 22 456 304 3.87% 0.82 21.11

SunOpta Inc. SOY 2.19 88 1,227 34 834 193 2.75% 0.68 24.74

S&W Seed Company SANW 2.50 33 73 (3) 144 83 -3.71% 1.97 -53.15

Amira Nature Foods Ltd. ANFI 0.57 47 314 (20) 246 27 -6.37% 0.79 -12.32

Coffee Holding Co., Inc. JVA 3.90 6 91 2 26 22 2.21% 0.28 12.85

1.31 17.50

1.71 20.42

4.96 24.39

1.50 11.17

1.25 12.33




Top 10 Median

Top 10 Average


Top 10 Produce, Ingredients & Co-Packer Comparables by Market Capitalization

Company Ticker

Recent

Price

8/15/2019

Shares

Outstanding

TTM

Revenue

TTM

EBITDA

Enterprise

Value

Market

Cap

EBITDA

Margin

EV to

Sales

EV to

EBITDA

Danone SA BN $87.45 648 $27,538 $5,233 72,579$ $56,651 19.00% 2.64 13.87

Tyson Foods, Inc. TSN 87.86 365 41,520 4,114 44,433 32,041 9.91% 1.07 10.80

Hormel Foods Corporation HRL 41.39 534 9,589 1,347 21,704 22,096 14.04% 2.26 16.12

Post Holdings, Inc. POST 28.42 249 10,922 804 9,190 7,085 7.36% 0.84 11.43

Pilgrim's Pride Corporation PPC 95.78 73 5,868 1,179 13,300 6,998 20.08% 2.27 11.28

Seaboard Corporation SEB 3,834.50 1 6,678 230 4,384 4,468 3.44% 0.66 19.06

Nomad Foods Limited NOMD 20.60 195 2,555 412 5,787 4,007 16.13% 2.27 14.04

Sanderson Farms, Inc. SAFM 141.70 22 3,239 108 3,142 3,139 3.35% 0.97 28.99

Cal-Maine Foods, Inc. CALM 70.30 37 2,553 195 3,552 2,631 7.65% 1.39 18.20

Prestige Brands Holdings, Inc. PBH 41.81 49 1,361 103 1,722 2,036 7.54% 1.27 16.77

1.33 15.08

1.56 16.06

1.99 13.60

1.38 17.11

1.16 25.46Average Small Cap (Under $2B)


Top 10 Median

Top 10 Average



BKD SERVICES

Abundant services.Sheer precision.BKD, LLP offers a full range of services and industry-focused expertise to provide you with insightful

solutions and help you stay a cut above the competition.

FINANCIAL

ASSURANCE• Audit, review & compilations

• Benchmarking

• Internal audit

• Internal control studies

• SEC filings

• SOX 404 compliance

CONSULTING• Accounting outsourcing

• Bankruptcy consulting

• Budgeting & financial planning

• Cost accounting

• Employee benefit plan

structuring & administering

• ESOP feasibility analysis

• Forecasts & projections

FEDERAL & STATE TAX PLANNING & COMPLIANCE• Compensation planning

• Corporate tax planning

• Inventory tax planning

• R&D tax credit enhancements

• Real estate cost segregation

studies

• Restructuring planning

• State & local tax planning

FORENSICS & VALUATION CONSULTING• Bankruptcy services

• Business valuations

• Fraud prevention

• Litigation support

INTERNATIONAL TAX STRATEGIES• DISC

• Expatriate assignment

services

• Foreign tax credit planning

• Global structuring support

• Indirect global taxes

• Transfer pricing

INVESTMENT & FINANCIAL PLANNING• Estate & gift planning

• Family tax planning

• Investment management

• Personal wealth planning

• Retirement planning

TRANSACTION SERVICES• Federal, state & local tax

diligence

• Financial diligence

• Operations diligence

• Technology diligence

GROWTH & ADVISORY

INVESTMENT BANKING• Mergers & acquisitions

• Company sales & divestitures

• Debt & equity recapitalizations

• Management buyouts

• Affiliations

• Succession planning

• Strategic options analysis

ECONOMIC DEVELOPMENT• Expansion projects

• Grants & public incentives

INTERNATIONAL MARKET• Development

• Exporting

• Direct investment

• Licensing

• Acquisitions

OPERATIONS MANAGEMENT

PERFORMANCE ENHANCEMENT ADVICE & KNOW-HOW (PEAK) METHODOLOGY• Business process improvement

• Decision costing

• Inventory optimization

• Lean manufacturing

• Profit improvement

TECHNOLOGY

APPLICATIONS SOFTWARE• Best-Abra

• MAS 90, 200 & 500

• Microsoft CRM

• Microsoft Dynamics AX

• Microsoft Dynamics GP

IT SERVICES• IT assessments & planning

• IT control reviews

• Project management assistance

• Security solutions & penetration

testing

STRATEGIC TECHNOLOGY• E-business planning

• IT assessments & planning

• Systems selection &

implementation


8bkdcapitaladvisors.com

Technology, Media & Telecom

Consumer Services & Products

Construction & Engineering

Financial Services

Health Care

Manufacturing & Distribution

Business Services

Energy

INDUSTRY FOCUS

ABOUT US

BKDCA, a wholly owned subsidiary of BKD, LLP, helps companies and

stockholders go beyond their numbers by creating value through investment

banking solutions that include mergers, acquisitions, sales, recapitalizations,

management buyouts and financings.

Founded in 1994, BKDCA is staffed with experienced investment bankers and

financial analysts. In addition, the firm draws on the resources of BKD with its

network of accountants, auditors, tax professionals, business consultants and

industry-specific consultants.

The professionals of BKDCA have more than 200 years of combined

experience helping company owners plan for and execute their growth and

exit strategies. From managing the sale of a company to negotiating the

acquisition of a competitor or raising debt and equity capital to improve

financial and operational flexibility, BKDCA can help you to develop a specific

course of action for achieving your desired results.

BKDCA is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.

BKD/BKDCA OfficeBKD Office

CONTACT US – F&B TEAM


9

Ernest Hunter II

Vice President

Houston, TX

713.499.4600

[email protected]

Tony Schneider

Managing Director

Indianapolis, IN

317.383.4000

[email protected]




FOOD & BEVERAGE MERGER & ACQUISITION PERSPECTIVES …...The food & beverage market continues to...

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