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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
Ernest Hunter II
Vice President
Houston, TX
713.499.4600
bkdcapitaladvisors.com
243
187
249
274 283 275
309325
335
365344
154
182
F&B Total Deals2008 – 1H 2019
TRANSACTION ACTIVITY
FOOD & BEVERAGE M&A PERSPECTIVES 1H 2019
3
Source: S&P Capital IQ
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
bkdcapitaladvisors.com
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
FOOD & BEVERAGE M&A PERSPECTIVES 1H 2019
4
Source: S&P Capital IQ
bkdcapitaladvisors.com
-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
FOOD & BEVERAGE M&A PERSPECTIVES 1H 2019
5
Source: S&P Capital IQ
bkdcapitaladvisors.com
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
Average Large Cap (Over $10B)
Average Mid Cap ($2B - $10B)
Average Small Cap (Under $2B)
PUBLIC COMPARABLES
FOOD & BEVERAGE M&A PERSPECTIVES 1H 2019
6
Source: S&P Capital IQ
bkdcapitaladvisors.com
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
in millions of dollars
Top 10 Median
Top 10 Average
Average Large Cap (Over $10B)
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
in millions of dollars
Top 10 Median
Top 10 Average
Average Mid Cap ($2B - $10B)
Top 10 CPG Food Comparables by Market Capitalization
Top 10 Natural & Organic Comparables by Market Capitalization
PUBLIC COMPARABLES
FOOD & BEVERAGE M&A PERSPECTIVES 1H 2019
7
Source: S&P Capital IQ
bkdcapitaladvisors.com
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
Average Mid Cap ($2B - $10B)
Average Small Cap (Under $2B)
in millions of dollars
Top 10 Median
Top 10 Average
Average Large Cap (Over $10B)
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)
in millions of dollars
Top 10 Median
Top 10 Average
Average Large Cap (Over $10B)
Average Mid Cap ($2B - $10B)
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.
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structuring & administering
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diligence
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implementation
FOOD & BEVERAGE M&A PERSPECTIVES 1H 2019
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
FOOD & BEVERAGE M&A PERSPECTIVES 1H 2019
9
Ernest Hunter II
Vice President
Houston, TX
713.499.4600
Tony Schneider
Managing Director
Indianapolis, IN
317.383.4000
bkdcapitaladvisors.com