What We’re Seeing

Market Update

The food & beverage M&A market remains active through July with several notable transactions. Driven by recent acquisitions such as Conagra Brands’ purchase of Pinnacle Foods for $10.7 billion, 2018’s food & beverage deal volume has now reached $85 billion, surpassing 2017’s volume of $78 billion. Other notable recent deals include Brynwood Partners’ acquisition of J. M. Smucker’s U.S. baking business for $375 million and Highlander Partners’ acquisition of Queen City Candy.

What We've Been Doing

Closed HW&Co. Transactions

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What We’ve Been Reading

Amazon's Purchase Of Whole Foods Flipped The Meal-Kit Industry Upside Down

"Amazon's reputation for disrupting entire industries has the meal-kit market changing up business models in an effort to hold onto customers. The retailer's mere presence in the market has already fundamentally altered it. Companies are adding celebrity spokesmodels, catering to specialized diets, and promising customers everything from 30-minute meal prep to curbing heart disease. Meal kits, which were once billed as the solution to weekly or biweekly trips to a crowded grocery store, are also now selling in supermarkets and drug stores."

Access the full article here.

Salty Snacks Growing In Popularity Even As Consumers Search For Healthy Alternatives

"The $24.0 billion U.S. salty snacks industry, with a CAGR of ~4.0% between 2012 and 2017, is estimated to surpass $29.0 billion in 2022. As more American consumers replace meals with snacking, sales of salty chips, pretzels, and popcorns have grown. Ready-to-eat popcorn and caramel corn have experienced noticeable growth, as retail sales increased 18.5% from $1.1 billion in 2015 to $1.6 billion in 2017. As a result, the category claimed 8.7% of retail sales of U.S. salty snacks."

Access the full article here.

Plant-Based Food Options Are Sprouting Growth For Retailers

"Amid the various nutrition programs in the current market, plant-based diets are gaining particular prominence. Within this space, an array of plant-based alternatives are posting significant sales growth. As of 2017, 19.5% of food and beverage revenues came from products that met a plant-based diet. As a result of consumer interest, vegan and produce sales growth is outpacing total food and beverage sales. In addition, vegan and produce options increased their revenue share by ~2.0% between 2014 and 2017."

Access the full article here.

 

Vital Signs

Commodity Price Indices4

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Protein Price Indices1,2

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Restaurant And Grocery Store Sales Indices3

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Consumer Food Price Index Inflation1

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Public Equity Market Overview

Key Trading Statistics4

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Public Company Sector Performance (Median One Year Change In Stock Price)4

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Recent Equity Offerings5

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Food And Beverage Industry Stock Performance Index4

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M&A Market Overview

Highlighted Food And Beverage M&A Transactions4

Brynwood Partners Announces To Acquire U.S. Baking Business Of The J. M. Smucker Company

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  • Brynwood Partners agreed to acquire the U.S. baking business of The J.M. Smucker Company for $375 million.
  • The brands acquired include Pillsbury, Hungry Jack, White Lily, Jim Dandy, and Martha White.
  • The iconic portfolio of brands and the company's 650,000 square foot manufacturing facility will provide Brynwood with a solid platform to invest and grow.

 

 

Highlander Partners Acquired Queen City Candy

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  • Highlander Partners acquired Queen City Candy for an undisclosed amount.
  • Based in Greendale, IN, Queen City Candy produces and supplies gummy confection products.
  • Highlander believes significant growth opportunities exist in the gummy confection and vitamin space.

 

 

Conagra Brands Announces To Acquire Pinnacle Foods

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  • Conagra agreed to acquire Pinnacle Foods for $10.7 billion.
  • Based in Parsippany, NJ, Pinnacle Foods operates as a manufacturer, marketer, and distributor of branded food products in North America.
  • The transaction will enhance Conagra Brands' multi-year transformation plan and expand its presence and capabilities in its most strategic categories, including frozen foods and snacks.

 

M&A Market Overview*

Food and Beverage M&A Trends4

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Latest Deals And Announced Private Equity Activity4

Last 10 Deals Announced

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Private Equity Investments & Exits

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* M&A transactions include European and cross-border deals since 2015.

Debt Market Overview

Food And Beverage Loan Activity6

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Recent Debt Offerings7

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M&A Overview*

Median LTM Trading Multiples & Quarterly Food & Beverage M&A4

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Recent Food and Beverage M&A4

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Recent Food And Beverage M&A4

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* M&A transactions include European and cross-border deals since 2015.

Food and Beverage Earnings Release Calendar

Earnings Release Calendar4

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Public Comparables4

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1. U.S. Bureau of Labor Statistics

2. Unweighted Average

3. US Census Bureau

4. Factset

5. Thomson Financial

6. S&P

7. Reuters

The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.​