Food & Beverage€¦ · Food & Beverage Spring 2016 Market Monitor . 2Food & Beverage MOSS ADAMS...

MOSS ADAMS CAPITAL LLC

Food & Beverage Spring 2016 Market Monitor

2 MOSS ADAMS CAPITAL LLC Food & Beverage

Table of Contents

Industry Update

Public Share Price Performance & Valuations

M&A Activity & Valuations

Moss Adams Overview

4

5

10

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Premier Food Services has been acquired by

SMG

Select Moss Adams Food & Beverage Transactions


Source: Bureau of Labor Statistics, U.S. Department of Commerce, United Nations Food and Agriculture Organization (FAO), World Bank, USDA, Moss Adams Capital research.

• The consumer confidence index measured 98 in January, 5.5% lower than the 2015 high of 104 experienced last January. Consumers generally do not view the volatility in financial markets as having a significant impact on the economy, while Consumer Confidence Survey numbers have been relatively flat in recent months.

• The Food and Agricultural Organization (“FAO”) index, which measures the change in international prices of a basket of food commodities, averaged 150 in January 2016, down 15.9% from January 2015. Abundant supplies, lackluster demand, and an appreciating U.S. dollar are behind the decline in global food prices. The FAO index remains at its lowest point since March 2009 (146).

• Food-at-home CPI (grocery store food items) showed a modest decrease of 1.0% in January 2016 compared to January 2015. Disease and drought led to higher egg, pork, and beef prices in 2015; however, the effects on eggs and pork are beginning to subside. USDA Economic Resource Service expects food prices to rise 2.0% to 3.0% in 2016, approximately the average rate of inflation over the last 20 years.

• Characteristics of F&B companies receiving the highest valuations remain consistent. Acquirers continue to look for companies with:

− A consumer focus on healthy lifestyles (i.e. responsibly sourced, minimal processing or added chemicals, wholesome ingredients, plant-based protein, etc.)

− Potential to enter new markets (i.e. product categories and geographies)

− High growth brand(s) to balance out existing mature portfolios

Commentary

Commodity Costs and Pricing Levels

Macroeconomic Consumer Indicators

2015 F&B M&A Activity Finishes Modestly Short of 2014 Record

FAO Food Price Index y/y Growth

(left-axis)

(Grocer Prices) F&B at Home CPI y/y

Growth (right-axis)

(Mgf'er Prices)Finished Processed F&B PPI y/y Growth

(right-axis)

CPI-PPI Spread(right-axis)

(6%)

(4%)

(2%)

0%

2%

4%

6%

8%

10%

(40%)

(20%)

0%

20%

40%

60%

80%

100%

Feb

-10

Au

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Feb

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Feb

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Feb

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Feb

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Feb

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Au

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Feb

-16

(6%)

(4%)

(2%)

0%

2%

4%

6%

8%

10%

12%

25

35

45

55

65

75

85

95

105

115

Feb

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Feb

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Umemployment Rate(right-axis)

Consumer Confidence (left-axis)

Payroll y/y Growth(right-axis)

Food & Beverage Store Sales y/y

Growth (right-axis)


Source: CapitalIQ.

Note: The indices in the chart above are composed of the public companies included on slide 7-9.

One Year Share Price Performance: Food & Beverage vs. S&P

F&B Companies Outperforming the Overall Market

(30.0%)

(20.0%)

(10.0%)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Feb

-15

Mar

-15

Ap

r-1

5

May

-15

Jun

-15

Jul-

15

Au

g-1

5

Sep

-15

Oct

-15

No

v-1

5

Dec

-15

Jan

-16

Feb

-16

Protein38.0%

Fruit & Vegetable21.4%

Beverage4.1%

Baked & Snack Foods3.6%

Packaged Foods1.7%

Dairy(0.5%)

S&P 500(5.1%)

Confectionary(10.8%)


Source: CapitalIQ.

Public Market Valuations Next 12 Month Sales and EBITDA Growth

• Despite recent concerns in the public equity markets, median Food & Beverage sales growth of 3.4% is expected over the next 12 months, while EBITDA growth of 18.6% is anticipated over the same period

• By comparison, companies in the S&P 500 are projected to realize sales and EBITDA growth of 1.7% and 6.5%, respectively.

• F&B companies’ valuations were more resilient to recent stock market volatility when compared to the S&P 500.

• Median F&B EV/EBITDA valuations decreased 1.3% in the first month of 2016 while the S&P decreased 5.8%.

Note: The indices in the chart above are composed of the public companies included on slide 7-9.

Food & Beverage Valuations Hold Strong Compared to Other Sectors

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

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12.0x

13.0x

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16.0x

Feb

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En

terp

rise

Va

lue

/L

TM

EB

ITD

A

Beverage15.2x

Packaged Foods13.4x

Baked & Snack Foods13.1x

Confectionary12.9x

Dairy12.9x

Fruit & Vegetable10.9x

S&P 50010.0x

Protein8.7x

6.5%

19.4%

33.6%

18.6%

(18.9%)

45.4%

8.5%

3.0%

1.7%

3.4%

1.3%

5.2%

(4.5%)

4.4%

6.4%

0.7%

S&P 500

Packaged Foods

Confectionery

Baked & Snack Foods

Protein

Dairy

Fruit & Vegetable

Beverage

Sales Growth EBITDA Growth


Public Company Valuations

Source: CapitalIQ, company filings.

Note: Not meaningful (NM) if EV/Sales is greater than 10x, or EV/EBITDA is greater than 40x. NA if denominator is 0, for percentages and multiples, or if estimates are not available. NTM figures are based on the median estimate of Wall St. analysts.

($U.S. in millions, except per share data) 2/19/16 TTM Data EV Multiple

Company Name

Share

Price

52 Week

High - Low

Market

Cap

Enterprise

Value Sales EBITDA

EBITDA

Margin Sales EBITDA

TTM

Sales

TTM

EBITDA

NTM

Sales

NTM

EBITDA

Packaged Foods

Nestlé S.A. $71.57 $77.78 - $66.37 $220,764 $238,755 $88,975 $16,875 19.0% 3.4% 3.8% 2.68x 14.1x 2.60x 13.6x

The Kraft Heinz Company 73.52 79.94 - 68.18 89,213 118,574 14,013 3,153 22.5% 92.2% 129.2% 8.46x 37.6x 4.40x 16.4x

Mondelez International, Inc. 39.81 48.58 - 33.97 62,456 76,102 29,636 4,664 15.7% (12.6%) 2.0% 2.57x 16.3x 2.94x 16.0x

General Mills, Inc. 58.72 59.87 - 47.43 34,841 44,201 17,283 3,467 20.1% (3.6%) (2.9%) 2.56x 12.7x 2.65x 13.1x

Kellogg Company 75.52 76.24 - 61.13 26,764 34,282 13,525 1,973 14.6% (1.0%) 27.5% 2.53x 17.4x 2.56x 13.6x

ConAgra Foods, Inc. 41.84 45.49 - 33.45 18,164 26,088 15,820 2,275 14.4% (26.0%) (12.2%) 1.65x 11.5x 2.23x 13.1x

Campbell Soup Company 60.94 61.60 - 44.45 18,893 22,738 8,030 1,480 18.4% 0.2% 17.8% 2.83x 15.4x 2.83x 13.0x

The J. M. Smucker Company 127.75 130.00 - 104.30 15,288 21,014 6,917 1,422 20.6% 12.9% 19.4% 3.04x 14.8x 2.69x 12.4x

McCormick & Company, Incorporated 92.02 92.10 - 71.01 11,695 12,993 4,296 705 16.4% 1.4% 8.2% 3.02x 18.4x 2.98x 17.0x

The Hain Celestial Group, Inc. 36.50 70.65 - 33.12 3,763 4,568 2,801 358 12.8% 9.3% 16.2% 1.63x 12.8x 1.49x 11.0x

Post Holdings, Inc. 67.83 71.39 - 41.11 4,348 8,216 4,823 693 14.4% 5.2% 19.9% 1.70x 11.9x 1.62x 9.9x

Treehouse Foods, Inc. 83.47 90.31 - 66.30 4,707 5,901 3,206 378 11.8% 98.8% 75.5% 1.84x 15.6x 0.93x 8.9x

B&G Foods Inc. 37.41 38.25 - 27.41 2,169 3,102 862 190 22.0% 59.3% 51.2% 3.60x 16.4x 2.26x 10.8x

Farmer Brothers Co. 26.16 32.94 - 20.90 426 392 541 39 7.3% 2.3% 35.1% 0.73x 10.0x 0.71x 7.4x

SunOpta Inc. 5.70 10.80 - 4.33 487 545 1,201 51 4.2% 26.7% 113.5% 0.45x 10.7x 0.36x 5.0x

Median $21,014 $6,917 $1,422 15.7% 3.4% 19.4% 2.56x 14.8x 2.56x 13.0x

Average $41,165 $14,129 $2,515 15.6% 17.9% 33.6% 2.62x 15.7x 2.22x 12.1x

Confectionery

The Hershey Company $91.03 $107.57 - $82.41 $19,735 $21,809 $7,387 $1,702 23.0% 1.3% 2.1% 2.95x 12.8x 2.91x 12.6x

Tootsie Roll Industries Inc. 33.61 34.90 - 29.65 2,071 1,955 538 106 19.8% NA NA 3.63x 18.4x NA NA

Rocky Mountain Chocolate Factory Inc. 10.41 15.60 - 9.30 61 63 41 8 18.5% NA NA 1.55x 8.4x NA NA

Median $1,955 $538 $106 19.8% 1.3% 2.1% 2.95x 12.8x 2.91x 12.6x

Average $7,942 $2,655 $605 20.4% 1.3% 2.1% 2.71x 13.2x 2.91x 12.6x

NTM Est. Growth


Public Company Valuations (cont.)

Source: CapitalIQ, Public company filings.



Company Name

Share

Price

52 Week

High - Low

Market

Cap

Enterprise

Value Sales EBITDA

EBITDA

Margin Sales EBITDA

TTM

Sales

TTM

EBITDA

NTM

Sales

NTM

EBITDA

Baked & Snack Foods

Flowers Foods, Inc. $16.36 $27.31 - $15.64 $3,471 $4,465 $3,779 $434 11.5% 6.0% 11.7% 1.18x 10.3x 1.12x 9.2x

Lancaster Colony Corporation 102.22 119.80 - 86.85 2,798 2,711 1,160 188 16.2% 4.3% 6.8% 2.34x 14.4x 2.24x 13.5x

Snyder's-Lance, Inc. 30.85 39.10 - 27.93 2,189 2,587 1,690 185 10.9% 28.0% 52.5% 1.53x 14.0x 1.20x 9.2x

J&J Snack Foods Corp. 109.92 125.62 - 97.20 2,054 1,943 986 151 15.3% 4.0% 5.6% 1.97x 12.9x 1.90x 12.2x

Diamond Foods, Inc. 36.21 42.13 - 25.75 1,144 1,788 842 109 13.0% 5.2% 25.6% 2.12x 16.3x 2.02x 13.0x

John B Sanfilippo & Son Inc. 64.70 68.40 - 34.57 724 770 936 74 7.9% (3.0%) NA 0.82x 10.4x 0.85x NA

Inventure Foods, Inc. 5.81 12.32 - 4.91 114 221 288 13 4.5% 8.8% 40.9% 0.77x 17.2x 0.71x 12.2x

Median $1,943 $986 $151 11.5% 5.2% 18.6% 1.53x 14.0x 1.20x 12.2x

Average $2,070 $1,383 $165 11.3% 7.6% 23.8% 1.53x 13.7x 1.43x 11.6x

Protein

Hormel Foods Corporation $42.75 $45.72 - $27.08 $22,592 $22,466 $9,161 $1,301 14.2% 5.5% 9.4% 2.45x 17.3x 2.33x 15.8x

Tyson Foods, Inc. 62.97 63.60 - 37.10 24,593 30,124 39,708 3,350 8.4% (6.1%) (1.4%) 0.76x 9.0x 0.81x 9.1x

Pilgrim's Pride Corporation 22.72 28.72 - 17.39 5,790 6,367 8,180 1,206 14.7% (0.6%) (18.9%) 0.78x 5.3x 0.78x 6.5x

Seaboard Corp. 2,866.15 4,640.00 - 2,427.01 3,356 2,735 5,967 302 5.1% NA NA 0.46x 9.1x NA NA

Cal-Maine Foods, Inc. 49.35 63.25 - 35.75 2,393 2,004 1,996 568 28.4% (9.7%) (28.0%) 1.00x 3.5x 1.11x 4.9x

Sanderson Farms, Inc. 85.74 87.73 - 64.13 1,935 1,749 2,803 411 14.6% (4.5%) (29.3%) 0.62x 4.3x 0.65x 6.0x

Median $4,551 $7,074 $887 14.4% (4.5%) (18.9%) 0.77x 7.1x 0.81x 6.5x

Average $10,908 $11,303 $1,190 14.3% (3.1%) (13.7%) 1.01x 8.1x 1.14x 8.5x

NTM Est. Growth


Public Company Valuations (cont.)

Source: CapitalIQ, Public company filings.



Company Name

Share

Price

52 Week

High - Low

Market

Cap

Enterprise

Value Sales EBITDA

EBITDA

Margin Sales EBITDA

TTM

Sales

TTM

EBITDA

NTM

Sales

NTM

EBITDA

Dairy

Danone $67.13 $75.35 - $57.54 $41,155 $50,534 $24,583 $3,969 16.1% 2.3% 4.2% 2.06x 12.7x 2.01x 12.2x

Glanbia plc 20.17 21.80 - 16.16 5,958 6,609 2,970 295 9.9% 7.1% 23.5% 2.22x 22.4x 2.08x 18.2x

Dean Foods Company 20.47 21.17 - 14.56 1,870 2,647 8,122 245 3.0% (2.4%) 67.3% 0.33x 10.8x 0.33x 6.5x

Lifeway Foods Inc. 10.55 22.38 - 9.88 172 172 119 6 5.4% 6.4% 94.1% 1.44x 26.7x 1.36x 13.8x

Median $4,628 $5,546 $270 7.7% 4.4% 45.4% 1.75x 17.6x 1.68x 13.0x

Average $14,990 $8,948 $1,129 8.6% 3.4% 47.3% 1.51x 18.2x 1.44x 12.7x

Fruit & Vegetable

Fresh Del Monte Produce Inc. $40.74 $47.49 - $34.01 $2,129 $2,341 $4,008 $258 6.4% 1.3% (3.6%) 0.58x 9.1x 0.58x 9.4x

Calavo Growers Inc. 53.04 62.13 - 41.40 922 956 857 52 6.1% 11.6% 20.7% 1.12x 18.3x 1.00x 15.1x

Seneca Foods Corp. 29.05 31.63 - 25.85 296 627 1,250 103 8.2% NA NA 0.50x 6.1x NA NA

Median $956 $1,250 $103 6.4% 6.4% 8.5% 0.58x 9.1x 0.79x 12.3x

Average $1,308 $2,038 $138 6.9% 6.4% 8.5% 0.73x 11.2x 0.79x 12.3x

Beverage

The Coca-Cola Company $43.77 $43.91 - $36.56 $190,355 $214,878 $44,294 $12,099 27.3% (4.1%) (0.0%) 4.85x 17.8x 5.06x 17.8x

Pepsico, Inc. 99.58 103.44 - 76.48 143,934 165,171 63,056 12,246 19.4% (0.9%) 1.8% 2.62x 13.5x 2.64x 13.2x

Monster Beverage Corporation 127.58 160.50 - 113.08 25,863 23,078 2,683 958 35.7% 15.7% 26.7% 8.60x 24.1x 7.43x 19.0x

Dr Pepper Snapple Group, Inc. 90.54 95.87 - 72.00 17,007 19,478 6,282 1,534 24.4% 1.5% 4.2% 3.10x 12.7x 3.05x 12.2x

Keurig Green Mountain, Inc. 91.52 131.09 - 39.80 13,682 14,067 4,392 1,030 23.4% 3.7% (0.1%) 3.20x 13.7x 3.09x 13.7x

National Beverage Corp. 36.75 48.01 - 19.98 1,706 1,626 672 93 13.9% NA NA 2.42x 17.5x NA NA

Cott Corporation 11.18 11.61 - 7.16 1,225 2,809 2,944 351 11.9% (0.2%) 6.0% 0.95x 8.0x 0.96x 7.6x

Median $19,478 $4,392 $1,030 23.4% 0.7% 3.0% 3.10x 13.7x 3.07x 13.5x

Average $63,015 $17,760 $4,044 22.3% 2.6% 6.4% 3.68x 15.3x 3.71x 13.9x

NTM Est. Growth


Source: CapitalIQ. 2) Middle market M&A includes transactions with disclosed EBITDA, where EV < $500 million and EV/EBITDA between 3.0x and 15.0x. Note: transactions with disclosed EBITDA represent <5% of all transactions.

1) Middle market M&A includes transactions with undisclosed values, and disclosed values where EV < $500 million.

Overall, 2015 was a record year for M&A with transaction values totaling $4.7 trillion, according to Thomson Reuters

In Q4 2015, U.S. middle market M&A deal volumes declined 15% from Q3 2015, and declined 26% from Q4 2015

U.S. middle market M&A activity in 2014 2015, measured by deal values, remained consistent with prior quarters at $94 billion

EBITDA multiples in middle market transactions in Q4 2015 finished the quarter at 8.3x EBITDA, equal to the 5 year average for this metric and up from Q2 and Q3 2015

Q4 2015 EBITDA margins of reportable transactions increased modestly but remained consistent with the 5 year average --- Reported EBTIDA margins in Q4 2015 were 9%, while the 5 year average is 8%

U.S. MIDDLE MARKET M&A 1 U.S. MIDDLE MARKET M&A VALUATIONS 2

Middle Market M&A Volume Down in Q4 2015; Multiples Up


Source: CapitalIQ, PitchBook, company filings, news releases.

Selected Notable M&A Activity with Disclosed Values $ in millions

Close Transaction EV/ EV/

Date Acquirer/Investor Target Target Description Value Revenue EBITDA

Dec-15 GreenSpace Brands Inc. Central Roast Inc. Snack, dried fruit, and nut food products $7.7 1.24x NM

Dec-15 Cott Corporation AquaTerra Corporation Direct delivery drinking water $45.6 - -

Dec-15 Acorn Holdings B.V. Keurig Green Mountain, Inc. Sells coffeemakers and specialty coffee $14,253.3 3.14x 13.3x

Nov-15 Pinnacle Foods Inc. Boulder Brands, Inc. Health and wellness food solutions $991.4 1.90x 22.1x

Nov-15 Dairy Farmers of America, Inc. DairiConcepts, L.P. Cheese and dairy ingredients $126.1 - -

Nov-15 Glanbia plc thinkThin LLC Protein products and health conscious food $217.0 2.58x -

Nov-15 Treehouse Foods, Inc. Ralcorp Holdings Inc. Manufactures and distributes private brand food $2,700.0 0.75x -

Oct-15 Seneca Foods Corp. Gray & Company, Inc. Fruit and fruit ingredients $36.5 - -

Oct-15 Snyder's-Lance, Inc. Diamond Foods, Inc. Snack and nut food products $1,937.8 2.23x 17.9x

Sep-15 B&G Foods North America, Inc. Green Giant International Frozen and shelf stable vegetables $765.0 - -

Aug-15 Viterra Inc. Twin Rivers Technologies Enterprises Vegetable oil and similar products $143.7 0.51x -

Aug-15 The WhiteWave Foods Company Wallaby Yogurt Company, Inc. Various dairy products $122.3 2.72x -

Jul-15 SunOpta Inc. Sunrise Growers, Inc. Fresh and frozen fruit products $450.0 1.50x -

Jul-15 JBS USA, LLC Cargill Pork, LLC Pork products $1,450.0 0.56x 6.8x

Jun-15 The WhiteWave Foods Company Sequel Natural Ltd. Dietary supplement and health products $550.0 5.50x -

Jun-15 Wm. Bolthouse Farms, Inc. Garden Fresh Salsa Company, Inc. Salsa, hummus, chips, and dips $232.0 2.11x -

May-15 Hormel Foods Corporation Applegate Farms LLC Organic meat products $775.0 - -

May-15 Oceana Group Ltd. Daybrook Fisheries, Inc. Fish meal and fish oil products $384.4 3.19x 9.2x

Apr-15 East Balt, Inc. The New Bakery Company, LLC Bakery products $78.5 - -

Apr-15 Alltech, Inc. Ridley Inc. Animal nutrition and animal food $429.3 0.70x 8.1x

Apr-15 Kagome Co., Ltd. Prefered Brands International, Inc. Pre-made Indian entrees $80.2 - -

Mar-15 H.J. Heinz Holding Corp. Kraft Foods Group, Inc. Packaged food and beverage company $55,032.0 2.95x 22.6x

Mar-15 Del Monte Foods, Inc. Sager Creek Vegetable Company, Inc. Canned vegetable products $75.0 0.30x -

Mar-15 McCormick & Company, Incorporated Brand Aromatics, Inc. Seasonings, flavors, and culinary bases $63.0 2.25x -

Feb-15 9135430 Canada Inc. MRRM Inc. Various rice products $10.6 0.21x 8.1x

Jan-15 The Hershey Company Krave Pure Foods, Inc. Processed meat snacks $240.3 6.87x -

Jan-15 Post Holdings, Inc. MOM Brands Company Breakfast cereal $1,151.7 - -

Jan-15 United Pet Group, Inc. Salix LLC Animal food products $148.0 1.48x -

Jan-15 The Chefs' Warehouse, Inc. Del Monte Meat Company, Inc. Meat supplier $213.0 0.87x 8.2x

Median $232.0 1.90x 9.2x


Source: CapitalIQ, PitchBook, company filings, news releases.

Selected Recent Mergers and Acquisitions $ in millions

Close Transaction EV/ EV/

Date Acquirer/Investor Target Target Description Value Revenue EBITDA

Jan-16 Martin Stein Spoonlickers LLC Frozen yogurt - - -

Jan-16 Unique Pizza & Subs Corp. PopsyCakes Distributing LLC Gourmet cake pops - - -

Jan-16 Brynwood Partners Sunny Delight Beverages Co. Juice-based beverages - - -

Jan-16 Frutarom Industries Ltd. Grow Company, Inc. Manufactures food flavors and coloring agents $20.0 - -

Jan-16 Blount Fine Foods Corp. Food Source, LP Custom frozen food manufacturer and co-packer - - -

Jan-16 Neptune Technologies & Bioressources, Inc. Biodroga Inc. Various healthy-fat products $10.6 0.67x 4.9x

Jan-16 Annie's, Inc. EPIC Provisions LLC Meat-based protein bars and snacks - - -

Jan-16 Teasdale Foods Inc. Bruce Foods Corporation, Mexican Food Business Mexican food products - - -

Dec-15 Birds Eye Holdings, LLC Cocoa Dolce Chocolates, LLC Chocolate products and mixes - - -

Dec-15 Rowe Farming Limited Andrews Farming Inc. Vegetable and melons - - -

Dec-15 Atlantic Aqua Farms, Inc. J.P.'s Shellfish, Stewart Mussel Farm Inc. Seafood and shellfish products - - -

Dec-15 Fresh Hemp Foods Ltd. Hemp Oil Canada Inc. Hemp oil and food products $30.6 2.33x 8.4x

Dec-15 Emmi (USA), Inc. Redwood Hill Farm, LLC Goat dairy farm and creamery - - -

Dec-15 Healthy Food Ingredients, LLC Suntava, Inc. Produces naturally derived ingredients - - -

Nov-15 Agriculture Capital Management Griffith Farms, TreeSource, Suntreat Packing Co. Citrus food products and packaging - - -

Nov-15 Private Investor Wilderness Family Naturals, LLC Natural and organic products - - -

Nov-15 Wholesome Sweeteners, Inc. TruSweets, LLC Produces and sells candy - - -

Nov-15 Atlantic Natural Foods, LLC neat foods, LLC. Soy and gluten free meat substitutes - - -

Nov-15 Peak Rock Capital Berner Food and Beverage Inc. Food, snack, and beverage products - - -

Nov-15 Meadowfresh Dairy Corporation Organic Meadow Inc. Organic co-op farm - - -

Nov-15 Platter's Chocolates Inc. Ko-Ed Candies, Inc. Chocolate confections - - -

Nov-15 Ignyte Lab LLC Spice It Up LLC Produces low salt seasonings - - -

Nov-15 DS Services of America, Inc. Big Rock Springs, Inc. (nka:Sparkletts) Water bottling services and delivery - - -

Nov-15 The Vermont Teddy Bear Company, Inc. Vermont Brownie Company Gourmet dessert company - - -

Nov-15 Dominion Citrus Income Fund Dominion Farm Produce Ltd. Grows and packs various vegetables - - -

Nov-15 QED Connect, Inc. Cruz EATS, Inc. Multi-grain snack bars - - -

Nov-15 Eagle Family Foods Group LLC The J. M. Smucker, U.S Canned Milk Brands Produces canned milk - - -

Nov-15 Favorite Foods, Inc. Mid-Town Beef Co., Inc. Meat and poultry processing - - -

Oct-15 Strategic Rare Earth Metals, Inc. Village Tea Company Distribution Inc. Various tea products and accessories - - -

Oct-15 Nutraceutical International Corporation Dynamic Health Laboratories, Inc. Various healthy juice products $19.0 - -

Oct-15 Bevolution Group Beverage Innovations, Inc., Tropics Mixology Manufactures frozen drinks - - -


acquires November 2015

• U.S. Food & Beverage M&A transaction volume fell moderately short of 2014’s record as sellers continued to capitalize on high valuations, a strong economy, and shifting consumer preferences

• The global nutrition company Glanbia P.L.C. acquired thinkThin LLC, a manufacturer of protein and fiber enriched nutrition snacks, for $217 million.

• thinkThin primarily distributes in the United States and had $84 million of sales (2.58x EV/Revenue) in the 12-month period ending September, with a compound average growth rate of 31% over the last 3 years.

• Group managing director for Glanbia, Siobhan Talbot, stated that “the transaction is firmly aligned with [Glanbia’s] overall growth ambitions and positions us well in the fast growing nutrition bar category.”

• Glanbia is one of the world’s leading producers of quality performance nutrition products, with notable brands such as Optimum Nutrition, BSN, Isopure, ABB Performance among others.

Source: CapitalIQ, company filings, news releases.

Overview of Selected Notable Transactions

North American Middle-Market Food & Beverage M&A Volumes

acquires January 2016

• J.W. Child Associates (Boston-based Private Equity Firm) and the owner of Sunny Delight Beverages Co. (“SDBC”), has agreed to sell to Brynwood Partners for an undisclosed amount, pending regulatory approval.

• Brynwood Partners also owns the Harvest Hill Beverage Company which markets Juicy Juice products, the Hug juice brand, and Daily’s Cocktails brand.

• SDBC was formed by J.W. Childs Associates in 2004 after they acquired the brand from Procter & Gamble. The company now has over $400 million in gross sales and operates four manufacturing facilities in the U.S.

• This is Brynwood VII’s second operating platform in the beverage sector as they will seek synergies with their existing platform in Harvest Hill Beverage Company. According to the CEO of Brynwood Partners, Henk Hartong III, they plan on using SDBC’s 480 employees and strategically placed manufacturing facilities “to provide retail partners with new innovative products in a timely manner.” 246

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Moss Adams Capital LLC

• Full-service investment banking and strategic advisor services

• Dedicated industry specialists

• Focus on privately owned and family-held companies

• Mergers and acquisitions

• Private debt & equity placements

• Mezzanine capital

• Due Diligence preparation & advisory

Moss Adams LLP

• 100+ years old – Founded in 1913

• Largest accounting firm headquartered in the western U.S.

• 2,400 employees in 28 locations

• Fully integrated accounting, tax, and business advisory firm

• Middle-market specialists

• The Moss Adams Advantage: Discrete, highly leverageable transaction resources and services

International Presence

• Major market affiliates throughout the U.S. and more than 100 countries around world

Moss Adams at a Glance: Leadership through Experience and Results


I N D U S T R Y K N O W L E D G E M A T C H E D W I T H A N E X P E R I E N C E D T E A M

• Senior Level Attention

• Commitment to our Clients

• Professional Excellence

• Objective & Independent Advice

• Creating Value for Owners

• Global Presence & Capabilities

Premier accounting and financial services advice for middle-market food & beverage companies.

Expert Teams


• Capital Placement – Equity and Debt

• Merger and acquisition advisory

• Strategic alternatives assessment

• Exclusive sales and divestitures

• Strategic planning

• Management buy-outs

• Recapitalizations

• Fairness opinions

• Restructuring and special situations advisory

Corporate Finance Comprehensive Industry Coverage

Automotive & Dealer Services

Business & Marketing Services

Consumer, Retail & Apparel

Paper, Plastics, & Packaging

Food, Beverage & Agriculture

Healthcare Services & Products

Industrials / Niche Manufacturing

Infrastructure & Construction

Aerospace, Defense &

Government Services

Real Estate, Lodging & Leisure

Technology, Communications,

& Media

Transportation & Logistics

• Completed over 250 transactions

• Access to key decision-makers among institutional investor universe

• Coverage of relevant strategic partners

• Average of 20 years of investment banking experience among senior leaders

Highlights and Accomplishments

Moss Adams Capital Overview

Full Service Middle Market Investment Bank


Moss Adams is a founding member of Praxity, AISBL, a global alliance of independent accounting firms. In addition to its deep, direct international relationships, Praxity provides access and trusted advisory expertise worldwide.

Global Reach

Middle East and Indian Subcontinent Bahrain, India, Israel, Jordan, Kuwait, Lebanon, Oman, Pakistan, Palestinian territories, Qatar, Saudi Arabia, Sri Lanka, Tajikistan, United Arab Emirates

North America Canada, United States

Europe Austria, Azerbaijan, Belgium, Bosnia-Herzgovina, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Jersey, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, Ukraine

Asia Bangladesh, China, Indonesia, Japan, South Korea, Malaysia, Singapore, Taiwan, Thailand, Vietnam

Africa Angola, Benin, Botswana, Cameroon, Cape Verde, Djibouti, Egypt, Ghana, Ivory Coast, Kenya, Lesotho, Madagascar, Mauritius, Morocco, Namibia, Nigeria, Senegal, South Africa, Tunisia

Australasia Australia, New Caledonia, New Zealand

Latin America and Caribbean Argentina, Bermuda, Brazil, Cayman Islands, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Peru, Puerto Rico, Uruguay, Venezuela


Local, National and Global Reach

• Our affiliation with CFxB consists of 150+ Corporate Finance Professionals across the U.S. and in over 25 countries

• more than 25 countries

Global M&A Reach Through Local Relationships

https://ecollab.mazars.com/cfxb/


Harman Wales Managing Director (206) 302-6770 [email protected] Brandon Clewett Director (949) 517-9470 [email protected] Tyler Dale Vice President (949) 221-4030 [email protected]

Contributing Authors: Richard Anderson Managing Director (949) 221-4006 [email protected]

Robert Miranda Vice President (949) 221-4021 [email protected] Scott Porter Vice President (206) 306-6326 [email protected] James Rothenberger Vice President (206) 302-6777 [email protected]

Moss Adams Capital LLC

2040 Main Street Suite 900 Irvine, CA 92614

999 Third Avenue Suite 2800 Seattle, WA 98104

James Parr Analyst (949) 221- 4099 [email protected]

Wiley Kitchell Managing Director (206) 302-6780 [email protected]

Andrew Suen Vice President (949) 517-9428 [email protected] Bradley Erhart Associate (949) 517-9452 [email protected] Daniel Seubert Analyst (206) 302-6775 [email protected]

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