Update on the Packaged Food - Seale & Associates...Packaged food sales value recovered in 2015 after...
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Update on the Packaged Food & Beverage Markets in Mexico Business Insights May 2016
Transcript of Update on the Packaged Food - Seale & Associates...Packaged food sales value recovered in 2015 after...
Update on the Packaged Food
& Beverage Markets in Mexico
Business Insights
May 2016
Coca Cola, 27%
Danone, 7%
PepsiCo, 7%
Other, 60%
Grupo Bimbo12%
PepsiCo6%
Grupo Lala5%
Nestle4%
Sigma Alimentos3%
Alpura3%
Herdez2%
Unilever2%
Others63%
The soft drinks industry is comprised by bottlers of carbonates, water, juice,
among other categories. Carbonates is the leading category in this industry
with a 58% market share, nevertheless, it is facing strong pressure due to
more health conscious consumers and tax increases on the category.
$724 $762
$802 $821 $841 $863 $885 $909
2013 2014 2015 2016F 2017F 2018F 2019F 2020F
Packaged food sales value recovered in 2015 after a deceleration in 2014
caused by an increase in price, which included the IEPS tax on high-calorie
food. Packaged food is expected to recover over the next 5 years due to
sociodemographic and economic changes such as a growing middle class,
double-income households and urbanization and consumer spending.
Packaged Food Industry Performance in Mexico
Source: Euromonitor
Mexico’s authorities recently revealed that GDP grew 2.5% in 2015. In a year full of economic and financial turmoil mainly influenced by China’s decreased
growth and considerable drop in oil and commodity prices, the fact that Mexico managed to grow at this pace indicates the country holds solid
macroeconomic fundamentals especially when compared to similar emerging markets economies such as other Latin American peers. Also, with Brazil in
deep economic trouble, Mexico should see its position among emerging countries rise in Latin America which should reflect in an increase in foreign and
local investments due a to a solid economy, political stability and positive middle to long term growth prospects.
The consumer market in Mexico has responded well to the actual economic challenging environment by remaining budget cautions. There is a positive
outlook for the Mexican consumer, despite a modest deceleration in consumer spending in early 2016 as rising inflation affects consumer spending. Strong
labor market dynamics, favorable demographics and low price pressures support this strong outlook. In particular, consumer spending growth will boot the
emergence of an upper-middle class, creating robust premiumization opportunities.
Mexican Economy Overview
The packaged food industry is comprised by producers of baked goods,
dairy products, processed meats, confectionary products, among other
categories. In 2015, baked goods and dairy products represented slightly
more than half of the market share in this industry.
Beverage Industry Performance in Mexico
Mexico Packaged Food Industry by Category Mexico Beverage Industry by Category
Leading Players in the Packaged Food Industry in Mexico Leading Players in the Beverage Industry in Mexico
Historical & Forecast Sales
Baked Goods30%
Dairy22%
Confectionery8%
Processed Meats & Seafoods
6%
Condiments6%
Biscuits & Snack Bars
6%
Sw eet & Sour Snacks6%
Oils & Fats4%
Other12%
Sales by Category 2015 Sales: MXN $802 billion
Sales by Company 2015 Sales: MXN $802 billion
The packaged food industry is led by a combination of domestic players
(Bimbo, Lala, Sigma, Alpura, Herdez) and foreign multinationals (Pepsico,
Nestle, Unilever). Bimbo is the leader in the category with 12% of the market
share in 2015.
$490 $534
$559 $574 $591 $609 $629 $650
2013 2014 2015 2016F 2017F 2018F 2019F 2020F
Sales by Category 2015 Sales: MXN $559 billion
Sales by Brand2015 Sales: MXN $559 billion
The beverage industry is led by Coca Cola with almost one third of the
market share. Coca Cola is bottled in Mexico by two major bottling
companies (Arca Continental and Coca Cola FEMSA) and other regional
bottling companies.
Soft drinks companies in 2015 fought to maintain their sales by changing
formulas, launching additional “light” products with sugar substitutes,
modifying packaging and fortifying their beverages to attract more health-
conscious consumers. As a result, the categories most heavily affected by
the IEPS tax on high calorie drinks, such as carbonates and juice, were able
to recover in 2015.Historical & Forecast Sales
Bottled Water22%
Juice11%
Other6%
Sports and Energy Drinks3%
Carbonates58%
2011 2012 2013 2014 2015EV /
EBITDA
EV /
Sales
Industrias Bachoco S.A.B. de C.V. MEX $51.76 $2,683 12.9% $2,588 $1,943 4.7x 10.6x 4.9x 5.2x 4.2x 5.6x 0.7x
Grupo Bafar S.A.B. de C.V. MEX $1.98 $564 10.1% $622 $762 10.1x 11.0x 15.6x 14.9x 13.5x 13.8x 1.4x
Grupo Bimbo, S.A.B. de C.V. MEX $2.79 $12,722 11.5% $13,133 $17,117 10.2x 11.9x 13.3x 12.0x 12.0x 12.0x 1.4x
Gruma S.A.B. de CV MEX $15.76 $3,383 15.6% $6,822 $7,488 5.8x 6.8x 8.0x 10.3x 12.7x 14.6x 2.3x
Grupo Herdez, S.A.B. de C.V. MEX $2.21 $949 17.7% $954 $1,681 7.0x 8.9x 12.7x 11.7x 9.6x 8.9x 1.8x
Grupo Industrial Maseca, SAB de CV MEX $1.29 $921 18.5% $1,188 $1,172 7.4x 7.0x 7.7x 7.2x 7.0x 7.1x 1.3x
Mean 7.5x 9.4x 10.4x 10.2x 9.8x 10.3x 1.5x
Median 7.2x 9.8x 10.4x 11.0x 10.8x 10.4x 1.4x
Company Company Country
Annual Avg. EV / EBITDA 05/04/2016Price
05/04/2016
Revenue
US$ MM
EBITDA
Margin
Mkt. Cap
US$ MM
Enterprise
Value
2011 2012 2013 2014 2015EV /
EBITDA
EV /
Sales
Arca Continental, S.A.B. de C.V. MEX $6.60 $4,438 21.9% $11,053 $13,837 13.3x 14.0x 13.5x 11.7x 12.0x 14.4x 3.2x
Organización Cultiba, S.A.B. de C.V. MEX $1.31 $2,159 9.5% $937 $1,523 NM NM 14.0x 10.9x 15.2x 8.1x 0.7x
Coca-Cola FEMSA S.A.B de C.V. MEX $81.19 $8,844 19.2% $16,830 $20,007 9.3x 12.6x 14.3x 11.2x 11.1x 11.8x 2.3x
Grupo Lala, S.A.B. de C.V. MEX $2.59 $2,797 14.1% $6,397 $5,892 0.0x 0.0x 14.8x 12.9x 13.3x 15.3x 2.2x
Mean 7.5x 8.9x 14.1x 11.7x 12.9x 12.4x 2.1x
Median 9.3x 12.6x 14.2x 11.4x 12.6x 13.1x 2.2x
Company Company Country
Annual Avg. EV / EBITDA 05/04/2016Price
05/04/2016
Revenue
US$ MM
EBITDA
Margin
Mkt. Cap
US$ MM
Enterprise
Value
3.0x
8.0x
13.0x
18.0x
Arca Continental, S.A.B. de C.V. Coca-Cola FEMSA S.A.B de C.V. Grupo Lala, S.A.B. de C.V.
3.0x
6.0x
9.0x
12.0x
15.0x
18.0x
Industr ias Bachoco S.A.B. de C.V. Grupo Bafar S.A.B. de C.V. Grupo Bimbo, S.A.B. de C.V.
Gruma S.A.B. de CV Grupo Herdez, S.A.B. de C.V. Grupo Industrial Maseca, SAB de CV
Public Companies Analysis – Packaged Food & Beverage in Mexico
Public Companies Analysis
The following section presents key financial and market value information for public companies in the packaged food and beverage industries trading in the
Mexico Stock Exchange (“BMV”). This report also includes information for public leading companies in packaged food and beverage industries trading in
different stock exchanges across the world.
Source: Capital IQ
NM = Not Meaningful
Public Comparable Companies – Mexico Food Products Companies
Historic TEV / EBITDA Multiples – Mexico Beverage Companies
Public Comparable Companies – Mexico Beverage Companies
Historic TEV / EBITDA Multiples - Mexico Food Products Companies
Average: 9.63x
Average: 12.76x
2011 2012 2013 2014 2015EV /
EBITDA
EV /
Sales
Nestlé S.A. CHE $74.18 $88,975 19.0% $228,793 $247,385 10.1x 11.7x 12.2x 13.1x 10.1x 13.3x 2.7x
Associated British Foods plc GBR $48.07 $17,570 11.5% $37,888 $38,467 8.0x 8.9x 10.5x 14.7x 16.2x 17.9x 2.1x
Campbell Soup Company USA $64.40 $7,997 20.3% $19,909 $23,471 8.5x 9.1x 10.9x 12.1x 12.3x 14.4x 2.9x
ConAgra Foods, Inc. USA $45.09 $15,836 14.5% $19,575 $27,499 7.5x 9.0x 12.4x 9.9x 12.6x 11.5x 1.7x
General Mills, Inc. USA $64.28 $16,934 20.4% $38,208 $47,395 9.7x 10.4x 11.1x 11.7x 13.1x 13.4x 2.8x
Hormel Foods Corporation USA $42.24 $9,161 14.1% $22,384 $22,262 8.4x 8.6x 11.8x 12.6x 13.7x 16.8x 2.4x
Kellogg Company USA $76.81 $13,525 14.9% $27,055 $34,573 10.2x 10.6x 13.9x 8.6x 16.9x 17.1x 2.6x
McCormick & Company, Incorporated USA $99.09 $4,316 16.6% $12,588 $13,935 11.3x 13.0x 14.7x 14.0x 15.8x 18.6x 3.2x
Mondelez International, Inc. USA $41.03 $28,329 16.0% $63,889 $77,535 10.6x 10.3x 13.2x 14.0x 16.4x 16.6x 2.6x
The Hain Celestial Group, Inc. USA $41.62 $2,888 13.0% $4,291 $5,096 13.4x 16.8x 17.9x 19.9x 21.8x 14.2x 1.8x
The Hershey Company USA $91.34 $7,278 22.9% $19,777 $21,900 11.2x 12.3x 14.7x 14.6x 13.8x 12.8x 3.0x
The J. M. Smucker Company USA $126.01 $7,451 20.7% $15,081 $20,225 8.6x 9.5x 10.5x 10.3x 14.4x 13.1x 2.7x
Unilever PLC GBR $45.10 $57,857 16.0% $128,026 $141,197 10.2x 10.7x 12.0x 11.9x 13.1x 15.8x 2.5x
Mean 9.9x 11.0x 13.0x 13.2x 14.8x 15.2x 2.5x
Median 10.1x 10.4x 12.4x 13.1x 13.8x 14.4x 2.6x
Company Company Country
Annual Avg. EV / EBITDA 05/04/2016Price
05/04/2016
Revenue
US$ MM
EBITDA
Margin
Mkt. Cap
US$ MM
Enterprise
Value
2011 2012 2013 2014 2015EV /
EBITDA
EV /
Sales
Fonterra Co-Operative Group Ltd. NZL $3.99 $11,604 9.0% $6,393 $11,487 NM 10.2x 10.1x 13.2x 16.0x 10.0x 0.9x
Dean Foods Company USA $17.17 $8,122 4.9% $1,575 $2,357 8.1x 8.3x 6.4x 8.0x 9.8x 5.9x 0.3x
Parmalat SpA ITA $2.75 $6,997 7.1% $5,055 $4,741 7.2x 4.0x 7.3x 8.5x 8.5x 9.0x 0.6x
Dairy Crest Group plc GBR $8.65 $1,995 5.2% $1,213 $1,572 6.0x 5.5x 6.9x 9.3x 12.8x 16.2x 0.8x
Danone FRA $69.65 $24,341 16.7% $42,517 $51,739 11.1x 10.7x 10.9x 11.5x 13.2x 11.9x 2.0x
Saputo Inc. CAD $30.82 $7,763 10.1% $12,099 $13,383 11.3x 10.8x 12.4x 13.6x 13.7x 16.1x 1.6x
Mean 8.7x 8.3x 9.0x 10.7x 12.3x 11.5x 1.1x
Median 8.1x 9.3x 8.7x 10.4x 13.0x 10.9x 0.9x
Company Company Country
Annual Avg. EV / EBITDA 05/04/2016Price
05/04/2016
Revenue
US$ MM
EBITDA
Margin
Mkt. Cap
US$ MM
Enterprise
Value
2011 2012 2013 2014 2015EV /
EBITDA
EV /
Sales
Embotelladora Andina S.A. CHL $3.19 $2,650 16.2% $2,842 $3,754 8.8x 11.1x 12.6x 9.7x 8.3x 8.4x 1.3x
Pepsico, Inc. USA $103.10 $62,701 19.2% $150,659 $171,896 10.1x 10.2x 12.0x 12.4x 13.3x 14.0x 2.7x
Dr Pepper Snapple Group, Inc. USA $91.28 $6,282 24.2% $17,086 $19,550 8.5x 8.9x 9.1x 10.1x 12.5x 12.9x 3.1x
The Coca-Cola Company USA $46.53 $43,865 27.4% $201,417 $226,152 13.6x 13.4x 13.9x 14.5x 15.1x 17.8x 5.1x
National Beverage Corp. USA $44.13 $690 14.0% $2,054 $1,963 8.4x 8.5x 9.7x 12.1x 14.3x 20.3x 2.8x
Mean 9.9x 10.4x 11.5x 11.8x 12.7x 14.7x 3.0x
Median 8.8x 10.2x 12.0x 12.1x 13.3x 14.0x 2.8x
Company Company Country
Annual Avg. EV / EBITDA 05/04/2016Price
05/04/2016
Revenue
US$ MM
EBITDA
Margin
Mkt. Cap
US$ MM
Enterprise
Value
2011 2012 2013 2014 2015EV /
EBITDA
EV /
Sales
Snyder's-Lance, Inc. USA $31.47 $1,656 11.2% $3,011 $3,381 14.2x 13.6x 13.8x 13.1x 15.3x 18.3x 2.0x
J&J Snack Foods Corp. USA $105.03 $991 15.4% $1,963 $1,852 7.4x 8.6x 10.7x 12.2x 13.5x 12.3x 1.9x
John B Sanfilippo & Son Inc. USA $69.77 $942 7.2% $781 $827 6.2x 5.3x 5.5x 7.0x 10.1x 11.2x 0.9x
Inventure Foods, Inc. USA $5.54 $275 2.8% $108 $223 8.6x 11.7x 12.8x 15.9x 13.8x NM 0.8x
Golden Enterprises Inc. USA $5.52 $135 6.5% $62 $66 5.4x 6.1x 7.4x 9.9x 7.8x 8.0x 0.5x
Alkis H. Hadjikyriacos (Frou-Frou Biscuits) Public Ltd. CYP $0.00 $29 17.0% $26 $34 3.2x 5.2x 5.8x 7.1x 6.5x 6.5x 1.1x
Mean 7.5x 8.4x 9.3x 10.9x 11.2x 11.3x 1.2x
Median 6.8x 7.3x 9.0x 11.1x 11.8x 11.2x 1.0x
Mkt. Cap
US$ MM
Enterprise
Value
Annual Avg. EV / EBITDA 05/04/2016
Company Company CountryPrice
05/04/2016
Revenue
US$ MM
EBITDA
Margin
International Public Companies Analysis – Dairy Products
International Public Companies Analysis – Soft Drinks
International Public Companies Analysis – Snacks
International Public Companies Analysis – Branded Food Products
Source: Capital IQ
NM = Not Meaningful
Date Target Country Description BuyerSize
(US$mm)
EV/
EBITDA
EV/
Revenue
Apr-16 General Mills Frozen Bakery Business ARG Bakery business unit Grupo Bimbo, S.A.B. de C.V. N/D N/A N/A
Jan-16 Productos Lácteos La Perfecta S.A. NCA Milk & dairy products Grupo Lala, S.A.B. de C.V. N/A N/A N/A
Sep-15 Corporación Lindley S.A. PER Beverage bottler Arca Continental, S.A.B de C.V. $760.0 N/A 3.0x
Jan-15 Distribuidora de Lácteos Algil, S.A de C.V. MEX Dairy products Parmalat SpA $105.0 N/A N/A
Jul-14 Tyson de Mexico, S. de R.L. de C.V. MEX Chicken products Pilgrim's Pride Corporation $400.0 N/A N/A
May-14 Canada Bread Company, Ltd. CAD Baked goods Grupo Bimbo, S.A.B. de C.V. $1,671.0 8.4x 1.0x
Nov-13 Campofrio Food Group, S.A. ESP Packaged food products Sigma Alimentos & Shuanghi IHL $1,341.5 9.0x 0.6x
Aug-13 Spaipa S.A. - Indústria Brasileira de Bebidas BRA Beverage bottler Coca-Cola FEMSA S.A.B de C.V. $1,855.0 N/A 2.0x
Jun-13 Companhia Fluminense de Refrigerantes, S.A. BRA Beverage and beer bottler Coca-Cola FEMSA S.A.B de C.V. $448.0 N/A 1.9x
May-13 Comercial Norteamericana, S.A. de C.V. MEX Packaged beef products Sigma Alimentos, S.A. de C.V. $120.0 N/A 1.0x
May-13 Palma MEX Confectionery Arca Continental, S.A.B de C.V. N/A N/A N/A
May-13 Savien Frussweet MEX Artificial sweeteners Gomez Cueatara N/A N/A N/A
May-13 Grupo Nutrisa, S.A.B. de C.V. (67% stake) MEX Natural and organic food products Grupo Herdez, S.A.B. $158.1 16.2x 2.5x
May-13 Grupo Yoli, S.A. de C.V. MEX Beverage bottler Coca-Cola FEMSA S.A.B de C.V. $748.6 N/A N/A
Dec-12 Coca-Cola Bottlers Philippines, Inc. PHI Beverage bottler Coca-Cola FEMSA S.A.B de C.V. $688.5 N/A N/A
Dec-12 Wise Foods, Inc. USA Snacks Arca Continental, S.A.B de C.V. N/A N/A N/A
Oct-12 Gruma S.A.B. de C.V. MEX Corn and wheat torrillas Fernando Chico Pardo $510.0 7.4x 0.7x
Oct-12 Café del Pacifico MEX Coffee maker Femsa Comercio, S.A. de C.V. N/A N/A N/A
Jul-12 Harinera La Espiga, S.A. De C.V. MEX Wheat flour Bunge Limited $102.0 N/A N/A
Dec-11 Grupo Fomento Queretano, Beverage Division MEX Beverage bottler Coca-Cola FEMSA S.A.B de C.V. $480.1 N/A N/A
Dec-11 Sara Lee Corp., Fresh Bakery in ESP & POR ESP Bakery business unit Grupo Bimbo, S.A.B. de C.V. $157.4 N/A 0.4x
Sep-11 Grupo CIMSA MEX Beverage bottler Coca-Cola FEMSA S.A.B de C.V. $856.5 N/A N/A
Jun-11 Consorcio La Pureza De Bebidas S.A. de C.V. MEX Beverage bottler Coca-Cola FEMSA S.A.B de C.V. $827.3 N/A N/A
Jan-11 Grupo Continental S.A.B. de C.V. MEX Beverage bottler Embotelladoras Arca, S.A. de C.V. $2,298.0 9.4x 1.8x
Mean 10.1x 1.5x
Median 9.0x 1.4x
Date Target Country Description BuyerSize
(US$mm)
EV/
EBITDA
EV/
Revenue
*Dec-15 Keurig Green Mountain, Inc. USA Coffee products Acorn Holdings B.V. $14,253.3 13.3x 3.1x
Nov-15 Findus Sverige AB SWD Frozen food products Nomad Foods Limited (NYSE:NOMD) $994.6 14.9x 1.1x
Oct-15 Diamond Foods, Inc. USA Snack products Snyder's-Lance, Inc. (NasdaqGS:LNCE) $1,937.8 17.9x 2.2x
Jul-15 Kraft Foods Group, Inc. USA Branded food products H.J. Heinz $45,000.0 22.6x 3.0x
May-15 MOM Brands, Co. USA Breakfast cereal products Post Holdings, Inc. $1,126.2 7.9x N/A
Aug-14 The Hillshire Brands, Co. USA Branded food products Tyson Foods, Inc. $8,932.0 15.8x 2.1x
Jun-14 Conopco, Inc. USA Pasta sauce brands Mizkan Holdings Co., Ltd. $2,150.0 N/A 3.6x
Jun-13 H. J. Heinz, Co. USA Branded food products Berkshire Hathaway, 3G Capital $28,686.5 13.6x 2.4x
Jan-13 Ralcorp Holdings, Inc. USA Branded food products ConAgra Foods, Inc. $7,152.0 12.0x 1.6x
May-12 The Wimble Co. USA Biscuits and snacks Kellogg Co. $2,695.0 11.1x 1.9x
Jul-11 Hsu Fu Chi International, Ltd. CHN Candy products Nestlé, S.A. $1,771.0 16.8x 3.2x
Jul-11 Parmalat SpA (54.3% stake) ITA Dairy products & fruit beveragesSociété pour le Financement de
l'Industrie L.$3,590.5 10.8x 0.7x
Mar-11 Del Monte Corporation USA Branded food products KKR & Co. L.P.; Vestar Capital Partners $5,482.0 9.0x 1.5x
Mean 13.8x 2.3x
Median 13.4x 2.2x
*Announced
Source: Capital IQ
N/A = Not Applicable
M&A Activity in the Food & Beverage Industry in Mexico
Public Transaction Analysis
The following section presents relevant transactions of national and international companies in the packaged food and beverage markets around the globe.
Relevant Transactions - Mexican Companies
Relevant Transactions – Rest of the World
Seale was an advisor on the transaction
M&A Successful Case - Mexican Packaged Food Company
Grupo Bimbo, S.A.B. de C.V. (BMV:BIMBO A)Mexico City, Mexico
www.grupobimbo.com
Successful Case Overview:
Grupo Bimbo’s is the leading bread company in the world. Its global growth strategy has been supported by a series of international acquisitions during the
last 20 years. The largest transactions in the period include the acquisition of Weston Foods, a North America based baked products business, for US$2.4b.
Daniel Servitje, Chief Executive Officer of Grupo Bimbo mentioned the following about the transaction “This transaction is the most important one in Grupo
Bimbo’s history and one of the largest in the bread industry. Size alone, however, is not our main objective. Rather, our vision is to become the best baking
company, and we further that goal today by demonstrating a commitment and dedication to serving our consumers and customers in the most effective way
possible”
M&A Successful Case - Mexican Soft Drinks Companies
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Mexico City, Mexico
www.coca-colafemsa.com
2008 2009 2010 2011 2014 2015 2016
Weston Foods for
USD US$2.3b,
baked products in
North America
75% stake in Nutrella
Alimentos for US$150m,
baked products company
in Brazil
Fresh bakery
business from Sara
Lee for US$157m in
Spain and Portugal
Canada Bread
Company for
US$1.6b, a bread
company in Canada
Italian Home
Bakery, a Canada
baked products
company
Arca Continental, S.A.B. de C.V. (BMV:AC*)
Monterrey, Nuevo Leon
www.arcacontal.com
2011 2012 2013
Beverage division
of Grupo Tampico
for US$827m*
*Seale & Associates advised on this transaction
Timeline of Representative Acquisitions
Timeline of Recent Representative of Bottlers Mergers and Acquisitions
2007 2011
Merger of ARCA
with Grupo
Continental, a
US$2.3b
transaction
2015
Majority stake of
Lindley, Coca Cola
Bottler in Peru
2012
Successful Case Overview:
Arca Continental is the second-largest Coca-Cola bottler in Latin America
and one of the largest in the world. Arca Continental emerged from the
merger between ARCA and Grupo Continental in 2011.The transaction has
been the largest in the Mexican bottling industry and became a catalyst for a
strong consolidation trend in the coca cola bottling system in Mexico. The
company has also grown their snacks division through a series of
acquisitions across the Americas.
Senor
Snacks, a
snacks
company in
the U.S.
Successful Case Overview:
Coca-Cola FEMSA, is the leading Coca Cola franchised bottler in the world.
The company has grown impressively through acquisitions in Mexico and
Latin America. From 2011 to 2013, the company merged with 4 independent
Mexican bottlers (Grupo Tampico, Grupo CIMSA, Grupo FOQUE and Grupo
Yoli) consolidating is position as the largest Coca-Cola bottler in Mexico.
The size of the 4 transactions together amounted to approximately US$3.0b.
Timeline of Representative Mergers and Acquisitions
Assets of Dulces
Vero, a Mexican
candy company
Panrico for €190m, a
baked products
company in Spain
and Portugal
Grupo Fomento
Queretano for
US$580m*
Grupo CIMSA
for US$844m
Grupo Yoli for
US$699m
Companhia
Fluminense de
Refrigerantes
US$448m in Brazil
Spaipa for
US$1.8b in
Brazil
Coca-Cola Bottlers
Philippines (51%) for
US$689M
Wise Foods, a
snack company in
the U.S.*
Bokados, a
snacks
company in
the U.S.
2016
La Fronterita,
sugar production
assets for
US$41m in
Argentina
La Fronterita
2014
Majority stake of
Holding Tonicorp
S.A., a dairy
products company
in Ecuador
Inalecsa, a
bakery products
company in
Ecuador
Transaction Analysis
The following business cases present Seale & Associates’ recent and relevant transactions experience in the food & beverage industry in Mexico.
Cafe del Pacifico, S.A.P.I. de C.V.
Situation: Seale & Associates was retained by the family owners of Caffenio, a leading Mexican roaster
and producer of coffee and coffee related products to advise on the structuring of a transaction with
OXXO, their top client by sales and volume. Both the company and the client had strong concerns about
the highly dependent nature of their relationship.
Seale & Associates’ Approach: Seale professionals ran a comprehensive analysis of the situation and
determined an crafted an ideal transaction structure that addressed the concerns of both parties.
Outcome: The process resulted in the sale of a minority participation and an execution of long term
supply agreement with OXXO. After the transaction, Caffenio has grown significantly driven by a stronger
relationship with OXXO.
“We asked Seale to help us design and execute a joint
venture with a major customer. They designed a
custom transaction structure that perfectly addressed
our needs and the needs of our major customer. They
earned our trust and the trust of our partner – and both
parties could not be happier about the outcome.” -
Jose Antonio Diaz, President and CEO Cafe Del
Pacifico, S.A. de C.V.
Target: Café Del Pacífico, S.A. de C.V (“Caffenio”)
Transaction Type: Joint Venture advisory
Industries: Food and Beverage
Geography: Hermosillo, Mexico
Target: Grupo Fomento Queretano
Transaction Type: Sell-side advisory
Industries: Consumer Products, Food & Beverage
Geography: Queretaro, Mexico
Size: US$580 million
Situation: Seale & Associates was retained by the family owners of Grupo Fomento Queretano, one of
the oldest family-owned Coca-Cola bottlers in Mexico, to analyze strategic alternatives for their business
in the context of a changing industry landscape.
Seale & Associates’ Approach: Seale professionals presented the family with a range of strategic
alternatives and outcome scenarios for a sale or merger with three industry consolidators, and analyzed
in the context of shareholder value, timing, and control objectives. After the family decided that a merger
with Coca-Cola FEMSA was the preferred alternative, Seale ran a disciplined and expedited preferred
buyer process to achieve shareholder’s value, timing and control objectives.
Outcome: Seale’s approach resulted in shareholder consensus on the preferred alternative and a
successful merger with Coca-Cola FEMSA. As a result of the merger, Grupo Fomento Queretano’s
shareholders received 45.1 million newly issued KOF series L shares for a total aggregate enterprise
transaction value of approximately Ps. 7.6 billion (US$580 million), including the assumption of debt.
“From the very beginning of the planning process
before our merger with Coca-Cola FEMSA, Seale
listened and provided straightforward answers to each
and every one of our family member’s questions and
concerns and outlined the full range of options. Their
professionals provided invaluable guidance and
support as they helped us to navigate the merger
negotiations. We knew we could count on their trusted
advice to make certain we made the best decisions for
our company, our employees, and our family.” -
Federico Ruiz Rubio, former Board member and
shareholder, Grupo Fomento Queretano
Grupo Fomento Queretano, S.A.P.I. de C.V.
Arca Continental, S.A.B. de C.V. (BMV:AC)
“When we needed to acquire a platform of snack food
business in the United States (ultimately closing on
Wise Foods), we knew we could count on Seale’s no-
nonsense approach to make sure it happened quickly
and professionally. The Wise Foods deal was not only
the fastest deal we ever completed – it remains one of
the best.” - Francisco Garza Egloff, Chief Executive
Officer, Arca Continental, S.A.B. de C.V.
Situation: Seale & Associates was retained by Arca Continental with the mandate to help them diversify
their business portfolio by strengthening their snack foods arm in order to maximize their growth
opportunities.
Seale & Associates’ Approach: Seale professionals ran a thorough universe screening of snack food
companies that would align with Arca Continental’s strategy. Seale identified a list of potential targets and
initiated a qualification in order to identify the best fit for Arca Continental’s strategy and business profile
preference.
Outcome: The process outcome became Arca Continental’s largest snack foods acquisition, Wise Foods,
Inc. The business has resulted in another successful milestone in the expansion strategy of Arca
Continental.
Target: Wise Foods, Inc.
Transaction Type: Buy-side advisory
Industries: Salty Snacks and Soft Drinks
Geography: Northeastern USA
M&A Successful Business Cases
Representative Food & Beverage Industry Engagements
Washington, D.C. Mexico City, Mexico Monterrey, Mexico
Other Representative Mexico Engagements
Sell Side
has been acquired by
Sell Side
Grupo Galaz, S.A de C.V.
has been acquired by
Sell Side
Sell Side
has been acquired by
has partnered with
a subsidiary of
Acquisition
Advisory Services
Advisory Services Sell Side
has merged with
a business of
Corporate Finance Advisory
Corporate Finance
Advisory
has sold
to
Sanitaryware business units
and
Buy Side
has acquired
Wise Foods, Inc.
Sell Side
has merged
its Beverage
Division with
Sell Side
has merged
its Beverage
Division with
Advisory Services
Acquisition
Advisory Services
Sell Side
Sale of Parma
Ham Business
Sell Side
Tampico Altamira
has sold
to
Sell Side
a business unit of
has sold
Cosmocel Química
to
Sell Side
has sold
to
Sell Side
Mexico Contact Information
James A. Seale
President
Brett M. Carmel
Senior Managing Director
Felipe Bueno Viesca
Managing Director
Adrian E. Llerena
Managing Director
Sergio Garcia del Bosque
Managing Director
Adan Sierra
Vice President
Carlos Hernandez
Vice President
Francisco Viornery
Vice President
Oscar Tapia
Analyst
Alejandro Montemayor
Analyst
Since 1999, Seale & Associates has been the trusted advisor to highly
respected public and private companies from around the world, with a
track record of success in a diverse range of industries. Seale is an elite
boutique global investment banking firm with extensive experience in
mergers and acquisitions (M&A), corporate finance advisory, and
enterprise level strategy consulting. Our experienced team of
professionals are committed to serving clients with excellence and
integrity, while offering innovative ideas and solutions to address
complex dealings. All securities related transactions are cleared through
Seale Capital, Inc., a registered broker dealer and member of FINRA
and SIPC.
Washington, D.C. Mexico City, Mexico Monterrey, Mexico
For more information please visit: www.sealeassociates.com
Office Information
950 N. Glebe Road
Suite 950
Arlington, Virginia 22203
Phone: +1 (703) 294 6770
Paseo de la Reforma 115
Col. Lomas de Chapultepec
Mexico City, 11000
Phone: +52 (55) 8000 7463
* Multiple engagements
Advisor to Leading Companies Worldwide
Please contact us if you would like further information about
M&A trends and/or specific transaction multiples for your
industry.
