Embed Size (px)
Citation preview
QUARTERLY UPDATE Q4 2018
FOOD & BEVERAGE
Page 2
INDUSTRY OVERVIEWM&A TRANSACTIONS & PERFORMANCE
34.8
24.7
59.1
6.4
63.8
2.6
8.9
37.0
4.4
4.0
18.5
72.3
7.9
14.3
28.7
17.1
16.1
23.8
12.3
9.5
194
130
254
196 190
114
260
216 197
119
255 208
206
145
271
186
164 156
183 197
-
50
100
150
200
250
300
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Tran
sact
ion
Volu
me
(Num
ber o
f Dea
ls)
Tran
sact
ion
Valu
e ($
Bill
ions
)
NORTH AMERICANFOOD & BEVERAGE M&A TRANSACTIONS
Transaction Value Transaction Volume
Source: Capital IQ. Data as of December 31, 2018.
• Merger and acquisition (M&A) activity in the North American food and beverage industry remained relatively strong in the fourth quarter of 2018. Overall transaction volume increased from 183 in third quarter 2018 to 197 in fourth quarter 2018, while total disclosed transaction value fell from $12.3 billion to $9.5 billion in the same period. The decrease in transaction value over the comparative quarter is primarily attributable to the acquisition of Supervalu Inc. by United Natural Foods, Inc. for $2.9 billion in third quarter 2018.
• M&A activity in the food and beverage industry was largely driven by private strategic buyers in fourth quarter 2018. Private equity firms account for less than 7 percent of total transaction volume in the quarter. Public strategic companies accounted for approximately 24 percent of the transaction volume over the same period. The remaining acquisitions were made by private companies for strategic purposes, comprising just under 70 percent of the total transaction volume in fourth quarter 2018.
• The deal volume seen throughout 2018 in the food and beverage industry is forecast to continue into 2019. Many private food and beverage companies are choosing exit strategies over investment into new and current product line development, resulting in acquisition opportunities for capital-latent companies. Opportunities exist for companies to acquire prime assets in niche markets such as natural, organic and plant-based alternative foods to strengthen their foothold in the market.
• In Canada, M&A activity in the food and beverage industry increased from 20 transactions in third quarter 2018 to 22 transactions in fourth quarter 2018, while disclosed transaction value decreased from $1.5 billion in third quarter 2018 to $1.3 billion in fourth quarter 2018. Canadian M&A activity in fourth quarter 2018 was supported by restaurant-focused deals. The number of restaurant-focused transactions increased from one deal in third quarter 2018 to seven deals in fourth quarter 2018. A few large consolidators made restaurant acquisitions in fourth quarter 2018, including Swander Pace Capital, MYT Food Group and Recipe Unlimited.
M&A MARKET UPDATE FOR Q4 2018
2014 2015 2016 2017 2018
Page 3
MACRO ECONOMIC INDICATORS
Source: IBISWorld Industry Reports.F indicates forecast.
The key external drivers that affect the food and beverage industry in Canada include; per capita disposable income, consumer spending, consumer price index for food and the consumer confidence index. Growth in the food and beverage industry is expected to be fueled by rising incomes and increased consumer spending, with many consumers seeking premium goods such as natural and organic products.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Thou
sand
s ($)
PER CAPITA DISPOSABLE INCOME
-
20
40
60
80
100
120
140
160
180
Inde
x
CONSUMER PRICE INDEX FOR FOOD
0
200
400
600
800
1000
1200
1400
Billi
ons (
$)
CONSUMER SPENDING
-
20
40
60
80
100
120
140
Inde
x
CONSUMER CONFIDENCE INDEX
Page 4
SELECT RECENT M&A TRANSACTIONS
Source: Capital IQ.All figures are in $USD millions.
• Fuji Oil Holdings Inc. produces and sells a variety of foods across three major categories: oils and fats; confectionary and bakery ingredients; and soy. The company is headquartered in Osaka, Japan.
• Blommer Chocolate Company is an integrated chocolate and cocoa manufacturing company that serves confectionery, baking, dairy, pharmaceutical, and cosmetic industries around the world. The company is headquartered in Atlanta, Georgia.
• The Jordan Company, L.P. is a private equity firm specializing in buying and helping build established middle market companies with enterprise values from $100 million to $2+ billion, across a range of industries.
• Bojangles', Inc. develops, operates and franchises limited service restaurants in the U.S. Its restaurants offer made-from-scratch biscuit breakfast sandwiches, hand-breaded bone-in chicken, fixin’s and iced tea. The company is headquartered in Charlotte, North Carolina.
• Zensho Holdings Co., Ltd. manages food service chain restaurants in Japan and internationally. The company also develops sales systems and food processing systems. The company is headquartered in Tokyo, Japan.
• Advanced Fresh Concepts Corp. develops and supplies sushi products to supermarkets in the U.S. and Canada and owns and operates sushi bars. The company is headquartered in Rancho Dominguez, California.
• Craft Brew Alliance, Inc. brews and sells craft beers and ciders in the US and internationally. The company also operates five brewpubs and is headquartered in Portland, Oregon.
• Cisco Brewers, Inc. produces and markets alcoholic beverages. The company’s products include beer, wine, spirit, vodka, rum and gin as well as branded merchandise. The company is headquartered in Nantucket, Massachusetts.
Announced Nov 19, 2018
TEV $750 million
TEV/EBITDA 13.4x
TEV/Revenue 0.8x
Announced Nov 6, 2018
TEV $772.1 million
TEV/EBITDA 11.12x
TEV/Revenue 1.36x
Announced Oct 16, 2018
TEV $257 million
TEV/EBITDA Not disclosed
TEV/Revenue Not disclosed
Announced Oct 10, 2018
TEV $23 million
TEV/EBITDA Not disclosed
TEV/Revenue Not disclosed
acquired
acquired
acquired
acquired
Page 5
PUBLIC COMPARABLE ANALYSISTRADING MULTIPLES & OPERATING STATISTICS
Source: Capital IQ. Data as of December 31, 2018.LTM refers to last twelve months. NTM refers to next twelve months.
(Figures In $USD Millions, except percentages and ratios)
LTM Operating Figures NTM Consensus Estimates Valuation
CompanyMarket
CapitalizationEnterprise
Value RevenueRevenue Growth EBITDA
EBITDA Margin
Revenue Growth
EBITDA Margin
NTM EV/EBITDA
LTM EV/EBITDA
LTM EV/REV
Processed FoodsNestlé S.A. $248,412 $279,030 $91,104 1.7% $18,092 19.9% 4.9% 21.0% 13.9x 15.4x 3.1xTyson Foods, Inc. $19,525 $29,135 $40,052 4.7% $4,148 10.4% 2.9% 10.1% 7.0x 7.0x .7xCampbell Soup Company $9,931 $19,581 $9,218 17.4% $1,966 21.3% 5.3% 19.8% 10.2x 10.0x 2.1xB&G Foods, Inc. $1,906 $3,955 $1,731 8.6% $323 18.7% (4.6%) 19.7% 12.2x 12.3x 2.3xMedian $14,728 $24,358 $24,635 6.6% $3,057 19.3% 3.9% 19.7% 11.2x 11.1x 2.2xMean $69,944 $82,925 $35,526 8.1% $6,132 17.5% 2.1% 17.6% 10.8x 11.2x 2.0x
Natural FoodsThe Hain Celestial Group, Inc. $1,650 $2,317 $2,429 7.9% $199 8.2% 1.8% 10.8% 8.7x 11.7x 1.0xSprouts Farmers Market, Inc. $3,000 $3,546 $5,082 12.8% $340 6.7% 11.1% 6.4% 9.8x 10.4x .7xUnited Natural Foods, Inc. $543 $4,455 $10,637 12.5% $333 3.1% 127.3% 3.0% 6.1x 13.4x .4xMedian $1,650 $3,546 $5,082 12.5% $333 6.7% 11.1% 6.4% 8.7x 11.7x .7xMean $1,731 $3,439 $6,050 11.1% $290 6.0% 46.7% 6.7% 8.2x 11.8x .7x
SnacksGeneral Mills $23,237 $38,835 $16,278 4.6% $3,447 21.2% 4.9% 20.8% 11.0x 11.3x 2.4xThe Hershey Company $22,487 $26,384 $7,743 2.6% $1,905 24.6% 2.0% 24.7% 13.5x 13.8x 3.4xJ & J Snack Foods Corp. $2,714 $2,583 $1,138 5.0% $157 13.8% 3.0% 14.5% 15.2x 16.4x 2.3xMedian $22,487 $26,384 $7,743 4.6% $1,905 21.2% 3.0% 20.8% 13.5x 13.8x 2.4xMean $16,146 $22,601 $8,386 4.1% $1,837 19.9% 3.3% 20.0% 13.2x 13.8x 2.7x
Alcoholic BeveragesAnheuser-Busch InBev SA/NV $129,269 $244,484 $54,969 (1.9%) $21,854 39.8% 0.8% 40.7% 10.8x 11.2x 4.4xHeineken N.V. $50,451 $66,861 $22,323 6.1% $5,295 23.7% 18.1% 23.5% 10.8x 12.6x 3.0xBrown-Forman Corporation $22,667 $25,020 $3,287 4.7% $1,105 33.6% 4.3% 34.5% 21.2x 22.6x 7.6xMolson Coors Brewing Company $12,132 $22,180 $10,931 2.0% $2,418 22.1% (0.4%) 22.9% 8.9x 9.2x 2.0x
Median $36,559 $45,941 $16,627 3.3% $3,856 28.7% 2.6% 29.0% 10.8x 11.9x 3.7xMean $53,630 $89,636 $22,877 2.7% $7,668 29.8% 5.7% 30.4% 12.9x 13.9x 4.3x
Non-Alcoholic BeveragesThe Coca-Cola Company $201,546 $229,518 $32,310 (13.4%) $11,236 34.8% 0.1% 35.6% 19.9x 20.4x 7.1xPepsiCo, Inc. $155,950 $177,272 $64,663 1.8% $12,714 19.7% 1.7% 20.3% 13.2x 13.9x 2.7xStarbucks Corporation $79,895 $80,457 $24,720 10.4% $5,116 20.7% 5.6% 21.9% 14.1x 15.7x 3.3xMonster Beverage Corporation $27,217 $26,045 $3,693 11.5% $1,327 35.9% 9.9% 35.8% 17.9x 19.6x 7.1x
Median $117,922 $128,864 $28,515 1.8% $8,176 20.7% 3.7% 28.7% 16.0x 15.7x 3.3xMean $116,152 $128,323 $31,346 -0.4% $7,598 25.0% 4.3% 28.4% 16.3x 16.7x 4.4x
Fruit and VegetableLamb Weston Holdings, Inc. $10,773 $13,057 $3,608 11.2% $772 21.4% 2.2% 24.0% 14.8x 16.9x 3.6xFresh Del Monte Produce Inc. $1,368 $2,042 $4,402 7.7% $187 4.3% 7.7% N/A N/A 10.9x .5xSeneca Foods Corporation $276 $655 $1,311 7.3% $26 1.9% N/A N/A N/A 25.7x .5xMedian $1,368 $2,042 $3,608 7.7% $187 4.3% 4.9% 24.0% 14.8x 16.9x .5xMean $4,139 $5,251 $3,107 8.8% $328 9.2% 4.9% 24.0% 14.8x 17.8x 1.5x
Fast FoodMcDonald's Corporation $136,891 $166,240 $21,202 (9.8%) $10,008 47.2% (2.1%) 51.5% 15.6x 16.6x 7.8xYum! Brands, Inc. $28,707 $38,190 $5,707 (7.8%) $1,854 32.5% (3.8%) 36.7% 19.0x 20.6x 6.7xRestaurant Brands International Inc. $13,133 $26,286 $5,207 16.9% $2,153 41.3% 6.0% 41.8% 11.4x 12.2x 5.0x
Chipotle Mexican Grill, Inc. $11,998 $11,327 $4,750 7.9% $548 11.5% 7.6% 11.8% 18.8x 20.7x 2.4xMedian $20,920 $32,238 $5,457 0.1% $2,003 36.9% 1.9% 39.2% 17.2x 18.6x 5.9xMean $47,682 $60,511 $9,217 1.8% $3,640 33.1% 1.9% 35.4% 16.2x 17.5x 5.5x
Food RetailCostco Wholesale Corporation $89,732 $88,571 $144,836 9.1% $5,911 4.1% 7.0% 4.2% 13.7x 15.0x .6x
The Kroger Co. $21,938 $36,485 $124,102 4.1% $4,939 4.0% (0.8%) 4.4% 6.7x 7.4x .3xMedian $55,835 $62,528 $134,469 6.6% $5,425 4.0% 3.1% 4.3% 10.2x 11.2x .5xMean $55,835 $62,528 $134,469 6.6% $5,425 4.0% 3.1% 4.3% 10.2x 11.2x .5x
Page 6
PUBLIC COMPARABLE ANALYSISGROWTH, MARGINS & MULTIPLES
6.6%
0.1%
7.7%
1.8%
3.3%
4.6%
12.5%
6.6%
0% 5% 10%
Food Retail
Fast Food
Fruit and Vegetable
Non-Alcoholic Beverages
Alcoholic Beverages
Snacks
Natural Foods
Processed Foods
LTM REVENUE GROWTH
Source: Capital IQ. Data as of December 31, 2018.“LTM refers to last twelve months. NTM refers to next twelve months.Valuation details provided on page 5.
5.3%
3.1%
1.9%
4.9%
4.3%
2.6%
3.0%
11.1%
3.9%
0% 5% 10%
Food Retail
Fast Food
Fruit and Vegetable
Non-Alcoholic Beverages
Alcoholic Beverages
Snacks
Natural Foods
Processed Foods
NTM REVENUE GROWTH4.2%
11.2x
18.6x
16.9x
16.7x
11.9x
13.8x
11.7x
11.1x
.0x 5.0x 10.0x 15.0x 20.0x
Food Retail
Fast Food
Fruit and Vegetable
Non-Alcoholic Beverages
Alcoholic Beverages
Snacks
Natural Foods
Processed Foods
LTM EV/EBITDA14.0x
10.2x
17.2x
14.8x
16.3x
10.8x
13.5x
8.7x
11.2x
.0x 5.0x 10.0x 15.0x 20.0x
Food Retail
Fast Food
Fruit and Vegetable
Non-Alcoholic Beverages
Alcoholic Beverages
Snacks
Natural Foods
Processed Foods
NTM EV/EBITDA 12.8x
4.0%
36.9%
4.3%
25.0%
28.7%
21.2%
6.4%
19.3%
0% 10% 20% 30% 40%
Food Retail
Fast Food
Fruit and Vegetable
Non-Alcoholic Beverages
Alcoholic Beverages
Snacks
Natural Foods
Processed Foods
LTM EBITDA MARGIN
4.3%
39.2%
24.0%
28.4%
29.0%
20.8%
6.4%
19.7%
0% 10% 20% 30% 40% 50%
Food Retail
Fast Food
Fruit and Vegetable
Non-Alcoholic Beverages
Alcoholic Beverages
Snacks
Natural Foods
Processed Foods
NTM EBITDA MARGIN18.2% 21.5%
Page 7
PUBLIC COMPARABLE ANALYSISPERFORMANCE ANALYSIS
Source: Capital IQ. Data as of December 31, 2018.Further details provided on page 5.
(40.6%)
(0.5%)
(11.9%)
(1.0%)
(4.3%)(1.2%)
0.6%
(12.2%)
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
FOOD & BEVERAGE PEER GROUP STOCK PERFORMANCE
Natural Foods Fruits and Vegetables Alcoholic Beverages Snacks
Processed Foods Fast Food Non-Alcoholic Beverages Food Retail
11.8x
15.2x
11.5x
12.1x
8.0x
9.0x
10.0x
11.0x
12.0x
13.0x
14.0x
15.0x
16.0x
17.0x
18.0x
Natural Foods Fruits and Vegetables
Alcoholic Beverages Snacks
13.1x
16.4x16.2x
11.5x
8.0x
9.0x
10.0x
11.0x
12.0x
13.0x
14.0x
15.0x
16.0x
17.0x
18.0x
Processed Foods Fast Food
Non-Alcoholic Beverages Food Retail
FOOD & BEVERAGE PEER GROUP EV/EBITDA MULTIPLES
Page 8
MNPCF – LEADERSHIP TEAM
DUE DILIGENCE LEADERSHIP
TRANSACTION LEADERSHIP
Aleem BandaliManaging Director
Dale AntonsenManaging Director
John CaggianielloManaging Director
[email protected] 416.513.4177
Brett FranklinPresident
Mike ReynoldsManaging Director
Johnny EarlManaging Director
[email protected] 604.637.1514
Dan PorterManaging Director
Stephen ShawManaging Director
Jason BurgessManaging Director
Mark RegehrManaging Director
Craig MaloneyManaging Director
Patrick KhouzamManaging Director
Page 9
MNPCF – RECENT TRANSACTIONS
NATIONAL
