What We're Seeing

Market Update

The food & beverage M&A market remains active through May with several notable transactions including robust strategic buyer activity. IFF announced an acquisition of flavors and ingredients maker Frutarom for $7.1 billion, Nestle agreed to acquire Starbuck’s consumer and foodservice business for $7.2 billion, Mondelēz International announced an acquisition of Tate’s Bake Shop for $500 million, and Charlesbank Capital Partners acquired Hearthside Food Solutions for $2.4 billion.

What We've Been Doing

Closed HW&Co Transactions

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What We've Been Reading

Modern Consumers Prefer Organics, Meal Kits and Local Stores When Grocery Shopping

In a recent study, Valassis found that 33 percent of consumers make an effort to buy only (or mostly) organic and natural products. This percentage increases substantially among parents (48 percent) and millennials (50 percent), despite the often higher prices. Additionally, 10 percent of parents and 14 percent of millennial parents now have meal kits delivered to their homes once a week to help grapple with their increasingly busy schedules.

Access the full article here.

IRI Survey Finds 2018 Off To Slow Start, But Predictions For Year Are Favorable

A recent IRI Consumer Connect survey suggests that consumers’ financial outlook has remained virtually unchanged during the past year. This conservative mindset has contributed to the CPG industry getting off to a slow start in 2018, but predictions for the remainder of the year are favorable. Key indicators point to GDP growth surpassing 5 percent for the first time in five years, and the unemployment rate is expected to end the year at 3.8 percent.

Access the full article here.

Frozen Food Catches Fire As Volumes Rise For First Time In 5 Years

Sales of frozen foods are increasing. Volume this year is growing for the first time since 2013. Consumers are looking for easy meal solutions — frozen breakfast waffles and frozen pasta entrées are two popular examples. Millennial households spent 9% more per shopping trip for frozen foods last year than other groups.

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

IFF Plans to Acquire Frutarom

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Enterprise Value: $7.1 billion

Revenue Multiple: 5.0x

EBITDA Multiple: 26.4x

Announced: May 07, 2018

  • International Flavors & Fragrances agreed to buy flavors and ingredients maker Frutarom for $7.1 billion.
  • Frutarom is located in Israel and manufactures flavorings, seasonings, fragrance compounds and other chemicals.
  • By combining with Frutarom, IFF is accelerating its Vision 2020 strategy to create a global leader in taste, scent and nutrition.

Mondelēz AgreesTo Acquire Tate’s Bake Shop

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Enterprise Value: $500 million

Revenue Multiple: NA

EBITDA Multiple: NA

Announced: May 06, 2018

  • Mondelēz International announced an agreement to acquire Tate’s Bake Shop for approximately $500 million.
  • Tate’s is a fast growing, premium cookie and baked goods brand known for its signature thin-and-crispy cookies made with simple, authentic, high-quality ingredients.
  • Tate’s complements Mondelēz’s portfolio of snack brands and is an entry point into the fast growing premium cookie segment.

Charlesbank Capital Partners And Partners Group To Acquire Hearthside Food Solutions

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Enterprise Value: $2.4 billion

Revenue Multiple: NA

EBITDA Multiple: NA

Announced: April 17, 2018

  • Charlesbank Capital Partners and Partners Group agreed to acquire Hearthside Food Solutions.
  • Based in Downers Grove, IL, Hearthside produces a broad range of high-quality nutrition bars, cookies, cereals and other baked foods and snacks.
  • Charlesbank is focused on promoting organic growth, executing select add-on acquisitions to further expand the business into adjacent industries and geographies, and optimizing existing manufacturing processes.

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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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