DealtrackerFood, Beverage & AgricultureSecond Half 2019

Sustainable consumer demands continue to drive transactions in the Food, Beverage & Agriculture sector

M&A insights in the industry

Second half year 2019

January 2019

Dealtracker Food, Beverage & Agriculture| January 2020

665 699 711 612

539

355 365 363 296 218

11,0x

11,5x

4

6

8

10

12

14

16

18

0

200

400

600

800

2015 2016 2017 2018 2019

Transactions in year

Transactions in Q3 + Q4

Enterprise value / EBITDA Trading

Enterprise value / EBITDA Transaction

Answering sustainability demands drives deal activity in the sector.

Sustainability is a topic that is gaining more and more importance and attention, especially within the Food, Beverage & Agriculture sector. As concerns for healthy food products are increasing, so has the interest in artisanal and authentically made products. An example of a transaction answering this demands is the acquisition of Bister, producer of artisan made mustard, by Nature. The strategy of the Belgian buyer is to create strong and local brands.

Another trend that is driving deals in the sector is about companies restructuring their portfolios in order to answer sustainability demands. An example of this is the agreement of Nestlé to sell a 60% stake in Herta, their meat-processing participation, to Spain’s Casa Tarradellas.

European M&A highlights in Food, Beverage & Agriculture sector

Source: S&P CapitalIQ

M&A highlights in the European Food, Beverage &Agriculture sector.

The number of transactions in the European Food,Beverage & Agriculture sector increased until 2017. In 2018,total European deal volume decreased within the sector.2019 represented a further decrease in the number of dealsshowing us a downward sloping trendline over the past twoyears.

Many factors impacted European deal activity, including theongoing economic uncertainty combined with the risk of aglobal recession, the slowdown in global trade and theconstant uncertainty of Brexit

In total, 218 deals took place in the second half of 2019.That’s over a hundred less compared to the first half year of2019. Apart from that, in terms of number of deals, Franceand the United Kingdom are still the most importantcountries with M&A activity within the Food, Beverage &Agriculture sector.

European Buyers Q3 & Q4 2019

European Targets Q3 & Q4 2019

European Transactions

United Kingdom15%

France16%

Spain10%

Russia4%Germany

7%Netherlands

7%

Italy9%

Norway3%

United States4%

Other25%

United Kingdom19%

France17%

Spain10%Russia

7%

Germany6%

Netherlands8%

Italy10%

Norway2%

Ukraine2%

Other19%

Dealtracker Food, Beverage & Agriculture| January 2020

M&A highlights in Food, Beverage & Agriculture sector in the NetherlandsM&A highlights in Dutch Food, Beverage & Agriculture.

The downward sloping trend of M&A activity in Europe is notconsistent with the Dutch M&A activity. Compared to 2018the deal activity with Dutch companies as targets increasedwith 30% in the sector.

However, in the second half of 2019 there were only 17deals in the Food, Beverage & Agriculture sector. Thistranslates in a decrease of 30% compared to the first half ofthe year.

In 2019, roughly 40% of all deals involving a Dutch targetwere cross-border transactions and 14% of the transactionsincluded financial buyers.

These findings indicate that the Netherlands are still animportant player in the M&A field of the Food, Beverage &Agriculture sector.

Source: S&P CapitalIQ

3

Dutch Transactions

Buyers in the Food, Beverage & Agriculture sector.

Packaged food and meat companies in Europe remain themost dominant buyers in the sector accounting for 60% oftotal deal activity.

Compared to the first half of 2019, distillers and vintnersalmost doubled their buying activity (for example, thetransactions of Moët Hennesy) . We can observe anincrease from 7% to 12% in the total deal activity.

Another key development is that during 2019 Europeanfinancial buyers activity decreases from 22% to 14%.Corresponding to global M&A reports the decrease ofprivate equity activity is in line with the declining trend ofglobal M&A activity.

European Buyer division Q3 & Q4 2019

Packaged Foods and

Meats61%

Soft Drinks5%

Agricultural Products

5%

Brewers3%

Distillers and Vintners

12%

Financial Buyers 14%

3942 41

32

42

19

2224

17 17

0

10

20

30

40

50

2015 2016 2017 2018 20190%

20%

40%

60%

80%

Transactions in year Transactions in Q3 + Q4

% cross-border % financial buyer

Dealtracker Food, Beverage & Agriculture| January 2020

Source: S&P CapitalIQ

4

M&A highlights in Food, Beverage & Agriculture sector

Target Buyer Description

Riedel, before the sale to Standard Investment in 2017, the formar soft drink and juice division of Friesland Campina acquired Hero Benelux. Hero, seller of fresh juices, has the mission to delight consumers by protecting the goodness of nature. According to the CEO of Riedel this transaction suits the strategy to expand in the fresh juices business.

BASF strengthens its biotechnology footprint by entering in the natural flavors and fragrances (F&F) ingredients market. Isobionics is an ingredient company developing, producing and selling a wide range of natural products in the F&F market using its inhouse developed technology. Via this deal BASF intends to advance the technology for biotech-based aroma ingredients. .

Heineken, the world’s second largest beer company took a minority stake in Paris basedFrench beer maker, Gallia 1890. The purpose of this deal to accelerate growth by expanding theirportfolio of purpose-driven brands.

Topking Fingerfood, well known of products like “Vlammetjes” and “KaasTengels” has been acquired by the private equity backed SignatureFoods. Nevertheless it keeps operating under thename Topking Fingerfood. With the acquisitionSignature Foods intends to accelerate the growthand to ensure a bright future for the Topkingbrands.

Sykes Seafood has acquired the Dutch producer and supplier of seafood products, Klaas Puul. The sellers in this deal were the Dutch Seafood Company itself and financial investor H2 Equity Partners. The British acquirer states that they are convinced about the Dutch brand and expects this deal to be a growth accelerator.

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Target Buyer Description

Natura, producer of cold sauces, mayonnaises, vinaigrettes and dressings, acquired Bister, a producer of prepared mustard. With this fully Belgian transaction, Natura would like to become a leading actor in the world of artisan sauces. The strategy of Natura is based on the creation of strong and local brands and serve local clients.

Moët Hennesy, the spirits and wine division of LVMH, acquired a stake in Château d’Esclans, producer of the world’s most expensive rosé wines. Earlier this year Moët Hennesy also boughtChâteau du Galoupet, another rosé wine maker in the southern of France. These two deals underlinethe growing demand and popularity of quality rosé wines.

Nestlé, the owner of Herta sold a majority stake(60%) of the French charcuterie maker to theSpanish family-runned company Casa Tarradellaswith the intention to create a joint venture. As Nestlé is pruning its portfolio and with theirstrategic focus on healthy nutrition and plant-basedofferings, the Swiss concern decided to put Hertaon sale.

The flavoured water brand Revolution Waves founded by former international UK rugby playerCharlie Simpson-Daniel has been acquired by thesoft drinks manufacturer Clearly Drinks. With everypurchase of a bottle flavoured water, 2 penny is donated to catering departments in British schools to support teachers with the task of educatingstudents about the importance of diet and exercise.

Evert EveraartsPartner Corporate FinanceT +31 (0)88 676 97 22E evert.everaarts@nl.gt.com

ContactFor further enquiries and to submit initial expressions of interest, please contact:

Killian ten KroodeSenior Consultant Corporate FinanceT +31 (0)88 676 91 09E killian.ten.kroode@nl.gt.com