What We’re Seeing

Market Update1

The M&A landscape in the food & beverage industry in July remains active, with several notable transactions. Atlas Holdings to acquire Flagstone Foods for $90.0 million, Performance Food Group to acquire Reinhart Foodservice for $2.0 billion, and L Catterton to acquire Del Frisco’s Restaurant Group for $824.2 million.

What We’ve Been Doing

Closed Harris Williams Transactions

screen_shot_2019-07-24_at_1.46.38_pm.png

HW Advises Vital Farms on Its Investment from Manna Tree

Business Overview

  • Vital Farms (the “Company”) is a leading provider of ethically produced, pasture-raised protein and dairy products
  • As a Certified B Corp, Vital Farms offers ethically produced foods to consumers, raising the standards for animal welfare
  • Starting with 20 hens in 2007, Vital Farms now works with more than 150 independent, family owned egg farms in nine states becoming the leading supplier of pasture-raised eggs in the country
  • The Company has expanded its product offerings to include pasture-raised, grass-fed American-made butter, pasture-raised hard-boiled eggs, and pasture-raised liquid eggs
  • Vital Farms continues to raise the standards for taste and nutrition while also increasing supply chain transparency and promoting  the welfare of happy, healthy hens and cows
  • The Company was excited to partner with Manna Tree, a like-minded private equity asset manager that focuses on investing in growing companies that are improving the health of the food supply chain

screen_shot_2019-07-24_at_1.48.55_pm.png

Key Value Drivers

  • Strong brand momentum – allows premium positioning and unrivaled consumer loyalty
  • Attractive market segment – pasture-raised and organic eggs driving outsized growth in the space
  • Proven brand extendibility
  • Compelling growth profile with significant white space
  • Strong farm supplier network and support structure ensures greater animal treatment and consistent quality
  • Recent investment in a state-of-the-art processing facility
  • Best-in-class operations and leadership team

screen_shot_2019-07-24_at_1.50.16_pm.png

Vital Signs

Commodity Price Indices1

screen_shot_2019-07-24_at_1.52.48_pm.png

Protein Price Indices2,3

screen_shot_2019-07-24_at_1.53.35_pm.png

Restaurant and Grocery Store Sales Indices4

screen_shot_2019-07-24_at_1.56.08_pm.png

Consumer Food Price Index Inflation2

screen_shot_2019-07-24_at_1.57.03_pm.png

Key Trading Statistics1

screen_shot_2019-07-24_at_1.57.51_pm.png

Public Equity Market Overview

Public Company Sector Performance (Median One year change in stock price)1

screen_shot_2019-07-24_at_2.00.04_pm.png

Recent Equity Offerings5

screen_shot_2019-07-24_at_2.00.48_pm.png

Food and Beverage Industry Stock Performance Index4

screen_shot_2019-07-24_at_2.02.57_pm.png

M&A Market Overview

Highlighted Food and Beverage M&A Transactions1

Atlas Holdings to Acquire Flagstone Foods

screen_shot_2019-07-24_at_2.04.18_pm.png

  • Atlas Holdings announced it has entered into an agreement to acquire Flagstone Foods, a snack company of TreeHouse Foods, Inc.
  • Flagstone Foods manufactures and distributes private label healthy snacks in North America
  • The transaction is in line with TreeHouse’s mission to refocus its business and focus on its core brands

 

Performance Food Group to Acquire Reinhart Foodservice

screen_shot_2019-07-24_at_2.05.31_pm.png

  • Performance Food Group (“PFG”) announced it has entered into an agreement to acquire Reinhart Foodservice
  • Based in Rosemont, IL, Reinhart Foodservice operates as a foodservice distributor in the United States with 26 distribution centers
  • The acquisition will enhance PFG’s distribution services and presence, improving network efficiency, and help PFG achieve its long-term growth goals

 

L Catterton to Acquire Del Frisco’s Restaurant Group

screen_shot_2019-07-24_at_2.06.51_pm.png

  • L Catterton announced it has entered into an agreement to acquire Del Frisco’s Restaurant Group
  • Based in Irving, TX, Del Frisco's Restaurant Group is a collection of 78 restaurants across 17 states and Washington, D.C
  • L Catterton has invested in several restaurant concepts and will seek to leverage this expertise to drive growth for Del Frisco’s

M&A Market Overview*

Food and Beverage M&A Trends1screen_shot_2019-07-24_at_2.10.51_pm.png

Latest Deals and Announced Private Equity Activity1

screen_shot_2019-07-24_at_2.12.27_pm.png

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

Debt Market Overview

Food and Beverage Loan Activity6

screen_shot_2019-07-24_at_2.14.05_pm.png

Recent Debt Offerings7

screen_shot_2019-07-24_at_2.15.11_pm.png

M&A Overview*

Median LTM Trading Multiples & Quarterly Food & Beverage M&A1

screen_shot_2019-07-24_at_2.16.33_pm.png

Recent Food and Beverage M&A1

screen_shot_2019-07-24_at_2.17.25_pm.png

picture1_325.png

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

Food and Beverage Earnings Release Calendar

Earnings Release Calendar1

screen_shot_2019-07-24_at_2.19.37_pm.png

Public Comparables4

screen_shot_2019-07-24_at_2.21.58_pm.png

screen_shot_2019-07-24_at_2.22.19_pm.png

screen_shot_2019-07-24_at_2.22.47_pm.png

screen_shot_2019-07-24_at_2.24.06_pm.png

screen_shot_2019-07-24_at_2.24.37_pm.png

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.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: hwgermany@harriswilliams.com). Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. awaited). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.