Présentation Powerpoint

NEWSLETTER Food Ingredients

Adding Zest to the Food & Beverage Industry

November1 NEWSLETTER 2019 FOOD & BEVERAGE www.globalma.comwww.globalma.com CONTENTS

1 Key Insights 03

2 Introduction 04 Uses 04 Types of Food Ingredients 05 Food Ingredients Market by 09 End Use

3 Key Market Dynamics 10 Market Drivers and Challenges 10 The Food Ingredients market is at a key Trends 11 phase of evolution, witnessing a pull towards functional ingredients as more F&B manufacturers focus on 4 M&A Overview 12 consumers’ demands for health focused products. Additionally, the B2C Overview 12 ingredients market is also Major Deal Drivers 13 demonstrating growth with more consumers engaging in leisure cooking M&A Activity Overview 14 and being attracted to exotic offerings. Select M&A Transactions - Strategic 14 The industry is making several changes Select M&A Transactions - Financial 18 such as increasing R&D, improving supply chain and joining forces with niche players to gain a competitive edge Peer Trading Analysis 20 over other ingredient manufacturers. 5 Our Global Food and Beverage Team provides extensive sector-specific Global M&A Partners – Food & 25 expertise and close relationships with 6 Beverage Team global buyers and sellers, both within your home territory and throughout the world. Many of our advisory transactions are cross-border.

2 NEWSLETTER FOOD & BEVERAGE www.globalma.com 1

Key Insights

The Food Ingredients industry is an essential component in the Food & Beverage supply chain. Positioned amid raw materials and final products, ingredients provide a wide range of applications, including further product development and improving consumer health across the Food & Beverage landscape. Food ingredients improve product taste, texture and appearance while enhancing shelf life and nutritional value. This $76 billion industry is characterized by high barriers to entry, significant organic growth, and strong margins. Historical growth has primarily been fueled by increasing demand from both consumers and food producers for products derived from specialty ingredients which offer functional and nutritional benefits. The sector has largely outperformed the broader Food & Beverage market over the past decade. We expect these trends will continue to drive growth:

• Favorable Sector-Specific Trends: While ingredient sales span the globe, manufacturers have begun to optimize supply chains and establish regional production, R&D, and sales departments. This allows companies to capitalize on local market knowledge and spur innovation which are critical to their success in new product development, improved applications of existing products, and continuing food ingredient modernization and specialization.

• Food & Beverage Long-Term Outlook: Macro trends impacting the global Agricultural and Food & Beverage sectors are of major significance to Food Ingredients industry performance. Notably, market forces such as a growing middle class; rising disposable income in developing countries; changing consumer lifestyles; increased adoption of healthy, convenient foods; and rising demand for meal replacements and ready-to-eat foods are all sparking demand for growth and innovation in the Food Ingredients industry.

Food ingredients companies are challenged to address growing demand for and increased specialization of food products to include changing tastes and preferences. The most successful companies are proactive and take the necessary measures to address evolving consumer habits, including:

• Adapting product portfolios to satisfy new consumer trends and local regulations, resulting in a shift towards offering more value-added ingredients (versus traditional synthetic ingredients) • Increasing local manufacturing presence and production capacity to meet customer demand • Attracting a skilled workforce, retaining existing talent, and automating production lines • Anticipating consumer needs concerning food properties, safety, traceability, and sustainability

3 NEWSLETTER FOOD & BEVERAGE www.globalma.com 2

Introduction

Food ingredients provide a wide range of applications and are an essential component in the Food & Beverage supply chain. Ingredients not only include substances added to food to achieve a desired effect, they also include food additives which serve specific technical or functional purposes during processing, storage, and packaging. There are two types of food additives: • Direct Food Additives: Direct additives impart specific technological or functional qualities and constitute a large segment of the food additives market. Examples include stabilizers used to help prevent separation of nutrients in fortified milk products and phosphates used as leavening agents in baked goods. • Indirect Food Additives: Indirect additives are not intentionally added to food but may be present in trace amounts as a result of processing, packaging, shipping, or storage. Examples include adhesives or packaging components that are declared as safe materials come in contact with food in lesser amounts. Food ingredients are derived primarily from natural or chemical sources. Natural sources include minerals; plants such as seaweed and kelp; microbiological substances (e.g., probiotics); and even crops or food items that would otherwise be discarded such as corn or citrus fruit rinds, respectively. Artificial ingredients are derived from organic chemicals such as hydrocarbons.

Uses

Food ingredients allow manufacturers to produce a wide variety of foods that are enticing, tasty, nutritious, consistent, and safe. Though used in small quantities, ingredients provide a major contribution to the vast and varied food supply chain, ensuring that foods look and taste the way consumers demand. Major uses for food ingredients include:

To support nutrition To maintain product To prevent spoilage during delivery quality and freshness transport, storage and sale

To extend shelf-life and To make some foods To aid in the processing prevent food waste more affordable and preparation of foods

To make foods more appealing and ensure that familiar foods have consistent qualities

4 NEWSLETTER FOOD & BEVERAGE www.globalma.com Introduction

Types of Food Ingredients

Appearance, freshness, taste and texture are a few of the major contributions of food ingredients. They help to maintain certain desirable qualities associated with various foods by aiding in the processing and preparation of foods. Based on the functions they serve in food processing, food ingredients are classified in the following key categories by The International Food Additives Council (IFAC) - a global association representing food ingredients manufacturers that strives to promote science-based regulation and the global harmonization of food ingredient standards and specifications:

Acid Regulators Acid Regulators are used to control and alter the level of acidity or alkalinity for food processing, taste, and safety. They can also be used as thickening and flavoring agents. Adequate control of pH levels is important to inhibit growth of hazardous bacteria and ensure a longer shelf life of food products. Regulators can be organic or mineral acids, bases, neutralizing agents, or buffering agents. Common examples include citric, acetic, ascorbic, lactic, propionic, and sorbic acids. Usage: Bread, fruit drinks, pie filling, meat and poultry, wine, jams and jellies, processed dairy foods.

The Acidity Regulators market size was worth $5.2 billion in 2018 and is expected to experience significant demand in the future owing to increasing application in beverages, condiments & dressings, sauces, bakery & confectionery and processed food.

Anti-Caking Agents Powdered foods often clump together and change texture after absorbing water. Anti-Caking Agents help to prevent this from taking place by keeping solid food in its free-flowing form. Many Anti-Caking Agents are derived from natural sources, such as silicates - minerals that are among the most common on earth. Calcium silicate is a common anti-caking agent found in table salt, which helps absorb both oil and water to reduce salt particles from clumping together. Other agents include the multi-functional mannitol (also a humectant, sweetener, and texturizer) and microcrystalline cellulose (also a binder, stabilizer, and bulking agent). Usage: Table salt, flour, sugar products, powdered milk, grated cheese, cake mixes, egg mixes.

The Food Anti-Caking Agents market is projected to witness a CAGR of 4.4%, growing from $634.8 million to $822 million during 2014-2020.

5 NEWSLETTER FOOD & BEVERAGE www.globalma.com Introduction

Colors Colors are used to balance and enhance naturally-occurring colors in foods. In addition, they are often used to give colorless food life, making it more appealing and fun for consumers. Two major types of Food Colors include natural colors, often exempt from certification because they are naturally sourced from vegetables and minerals, and synthetic colors which require approval from food safety authorities. Some of the most commonly used colors include anthocyanin, carotenoids, chlorophyll, and turmeric. Usage: Candy, margarine, beverages, cheese, jellies, yogurt, baked goods.

The Food Colors Market is estimated to be $3.9 billion in 2018 and is projected to reach $5.1 billion by 2023, at a CAGR of 5.7% during the forecast period

Food Cultures Food Cultures are safe, live bacteria, yeasts, or molds used in food production and a characteristic food ingredient. They occur naturally in foods or are added to provide acidification, texture, and flavor. They also provide nutritional benefits while helping to extend the shelf life of foods. Fermentation and inhibition of unwanted micro- organisms (protective) are key functions of food cultures. Microbial food cultures include bacterial food cultures, fungi, and yeast and can broadly be divided into probiotics and starter cultures. Usage: Dairy, meat, fish, bread, juice, fermented foods.

Protective cultures are and have always been an integral part of food cultures, projected to grow at a CAGR of 23.6% from $101.1 million in 2018 to $292.1 million by 2023

Emulsifiers/ Stabilizers/ Thickeners

Emulsifiers allow water and oils to remain mixed together in an emulsion. Stabilizers, thickeners, and other gelling agents give foods a firmer texture. Though the latter names are not true emulsifiers, they help to stabilize emulsions. Thickeners enhance the texture of foods while giving low-fat, low- calorie foods the texture of full-fat, full-calorie options. These ingredients help to maintain the appearance of foods and preserve freshness and quality. Common examples of emulsifiers include sodium alginate, agar agar, pectin, carrageenan, tragacanth, and xanthan gum. Usage: Margarine, ice cream, bread, chocolate, processed meats.

The Food Emulsifiers market is estimated to grow from $2.9 billion to $3.7 billion by 2023, at a CAGR of 5% during 2018-2023, mainly driven by the rise in consumption of processed foods

6 NEWSLETTER FOOD & BEVERAGE www.globalma.com Introduction

Firming Agents Firming Agents stimulate a firming action and are added to precipitate residual pectin, thus strengthening the structure of food to prevent collapse during processing. Their major applications are to give a product consistency in texture, shelf life, and strength from improved binding ability.

Common firming agents include aluminum sulphate, calcium chloride, calcium lactate, and potassium aluminum sulphate. Usage: Processed or canned vegetables and fruits, cheese, fish, pickles, relish.

The Firming Agents segment is expected to be the fastest growing segment of the Food Glazing Agents market which was estimated at $2.6 billion in 2015 and is expected to witness a CAGR of 8.4% from 2016-2024

Flavors/Flavor Enhancers Flavors improve the taste of food. Natural and Artificial Flavors are the two main types and are used to enhance a flavor already present in food or impart flavor. The most widely-known flavor enhancer is monosodium glutamate (MSG), which is commonly used in Asian foods. Other examples include glutamic acid, guanylic acid, mono-ammonium glutamate, disodium inosinate, ethyl maltol, glycine, and sodium salt. Usage: Candy, soft drinks, sauces, salad dressing, nutritional and dietary foods, and cereals.

The Flavor Enhancers market is projected to reach $8.2 billion by 2022, at a CAGR of 5.6% from 2017-2022

Foaming/Anti-foaming Agents Foaming Agents help to produce foams in foods by reducing surface tension. They are commonly made from naturally-occurring materials such as licorice root and tree bark (e.g., quillaja extract). Anti-Foaming agents reduce the formation of foam in liquids and are produced from readily available materials like silicates and minerals. Usage in Foaming Agents: Beverages, flavored waters. Usage in Anti-Foaming Agents: Oils, jams and jellies, juice, sauces, liquid eggs.

Key companies in the Foaming/Anti-foaming Agent market, that primarily caters to the desserts, bakery and beverages markets, include Ingredion, Naturex, ABITEC, Gelita, Nature S.A., Rousselot, Adams Food Ingredients, Garuda International, and Desert King International

7 NEWSLETTER FOOD & BEVERAGE www.globalma.com Introduction

Humectants Humectants help to retain or prevent the loss of moisture in foods by controlling or joining water activity. They also aid in increasing shelf life by lowering microbial activity. Sorbitol is a humectant derived from natural sugars in certain fruits, vegetables, and seaweed which has moisture-stabilizing properties. Glycerin is commonly used to control the moisture levels in foods that contain a mix of oil and water. Other well-known humectants include honey, sugar alcohols, glucose syrup, egg yolk, egg white, molasses, and alpha hydroxy acids such as lactic acid. Usage: Dairy, fruits and vegetables, confections, baked goods.

At a CAGR of 7%, the Humectants market is projected to reach $26.3 billion during 2017-2022, dominated by products obtained from synthetic sources

Preservatives Preservatives are used to prevent spoilage and maintain the appearance, taste, and texture of food. They are available in natural, artificial, and chemical forms.

Examples of natural food preservatives include sugars, salts, and vinegars which are used to delay bacteria growth in foods. Examples of chemical preservatives include benzoates, nitrites, sulphites, and sorbates.

Usage: Jellies, cured meat, dried fruit, oils, cereal, dressings, fruits and vegetables, baked goods.

The Food Preservatives market is projected to reach $2.9 billion by 2021, from $2.6 billion in 2016, at a CAGR of ~2%, driven by demand for food products with extended shelf life and higher safety and quality standards

Sweeteners Sweeteners are a low- to no-calorie sugar substitute. They are used in small quantities to intensify or achieve the same level of sweetness as natural sugars. Sweeteners are derived from a variety of sources such as plants (e.g., stevia) and artificial chemicals. Polyols or low-calorie sugar substitutes are gaining popularity, primarily driven by growing demand from health-conscious consumers. Examples include erythritol, hydrogenated starch hydrolysates, isomalt, lactitol, maltitol, mannitol, sorbitol, and xylitol. Usage: Soft drinks, canned foods, jellies and jams, baked goods, candy, dairy products.

The Polyol Sweeteners market was valued at $2.3 billion in 2016. It is projected to grow to a projected value of $3.3 billion at a CAGR of 5.9% from 2017-2022

8 NEWSLETTER FOOD & BEVERAGE www.globalma.com Introduction

Food Ingredients Market by End Use

Ingredients have many uses, ranging from improving the nutritional profile to changing the flavor of foods. Food and beverage companies now purchase ingredients instead of producing them in-house as the manufacture of commodity ingredients is capital intensive and generates low returns.

Food Ingredients Breakdown by End Use Segments Soft Drinks represents the largest ingredients end market, followed by Soft Drinks Sauces, Dressings & Condiments, both 12% 18% Sauces, Dressings & Condiments of which consume the largest volume of 3% ingredients in processing. Meat Products Bakery 4% and Functional Food / Beverages / Dairy 5% Dietary Supplements are projected to Confectionery see higher growth due to increasing 5% 16% demand for nutritional value in food. Chilled Processed Food Increasing complexity in the production Sweet & Savory Snacks 9% of high-quality food products and the Frozen Processed Food growing focus on health and nutrition 15% are driving demand for functional and 13% Dried Processed Food specialty ingredients in various food and Others beverage categories.

Few facts on the application of select food ingredient categories in select end-use segments:

$117 million $2.3 billion 5.4 %

Beverage Stabilizers Savory Solutions 2017-22 CAGR of Baking market size in 2018 Ingredients market Ingredients market

14 % 4.1 %

Estimated share of herbs and 2017-21 retail sales CAGR of spices in the Sauces, cooking ingredients category Dressings and Condiments in the U.S. Sauces, Dressings market in the U.S. in 2019 and Condiments market

9 NEWSLETTER FOOD & BEVERAGE www.globalma.com 3

Key Market Dynamics

Market Drivers and Challenges

Drivers Barriers Urbanization Regulatory Issue

• According to the UN, the global population is projected • Regulatory agencies enforce stringent and lengthy to grow from 7.6 billion in 2017 to 9.7 billion in 2050, approval processes to allow commercial use of with 70% estimated to beurban food ingredients • Urbanization will further propel demand for foods with • Accredited agencies such as the FDA and FAO of the wide-rangingingredients UN continuously monitor use of food additives, particularly in new markets

Rising Disposable Income High Barriers to Entry

• Rising disposable income and greater affordability • R&D investment and the procurement and have increased consumption of processed foods processing of ingredients makes it a capital intensive • Consumers are willing to pay higher pricesfor high- business quality, premium products • Obstacles include low-cost alternatives, increasing research requirements, and intensifying competition

Innovation & Technology Administrative Barriers

• Product innovation and technological advancements • Dearth of sophisticated players with integrated are expected to drive market growth operations in the food value chain • Companies are incurring higher R&D and capital • Insufficient agriculture, processing framework and expenditures ranging from3-8% of sales weak marketing system

Government Initiatives Industry, Academia and Skill Gap

• Governments in the APAC region are focusing on • Lack of internal experts, technology and skilled production and consumption of healthyfood professionals, who could aid research and innovation • Poses challenges with new opportunities and risks • Singapore’s Ministry of Health (MoH) is stepping up related to global quality standards and regulations on disease prevention through awareness campaigns and a $15 million investment to promote healthier ingredients

10 NEWSLETTER FOOD & BEVERAGE www.globalma.com Key Market Dynamics

Trends

The Food Ingredients market is expected to be shaped by the following consumer trends:

Shift from sensory to functional

• Due to increasing health and wellness considerations, there is a shift from sensory to functional ingredients • Consumers are moving away from pre-packaged, artificial foods to natural, organic and simple ingredients, especially in developed countries

Free-from claims

• Clean label, gluten-free, protein enriched products are trending and key to industry growth mainly due to consumers’ increasing focus on a healthy lifestyle

The quest for new flavors and ingredients

• F&B manufacturers are innovating products and expect their ingredient vendors to be in-sync with this innovation process • Ingredient manufacturers need to focus on providing them with differentiated solutions including new and exclusive ingredients

Global cuisines, local ingredients

• As consumers engage with leisure cooking, they seek unique ingredients to fulfill their fascination with global cooking styles • Companies need to ensure that global ingredients or local alternatives giving same results are accessible to consumers as a result of their strong operational and supply chain functions

Premium ingredients

• The flavor, the color and the exoticism of the ingredient makes it an appealing premium food • By catering to this aspect of consumers, ingredient manufacturers can command higher pricing for their premium quality offerings

Natural

• Heavily influenced by consumers, is another well-established trend of all natural and/or organic ingredients that is actively pursued by various ingredient manufacturers, large or small

11 NEWSLETTER FOOD & BEVERAGE www.globalma.com 4

M&A Overview

Overview

The global Food Ingredients market is highly-fragmented and comprised of diversified manufacturers such as Archer Daniels Midland Company and Kerry; large ingredients producers such as International Flavors & Fragrances, Koninklijke DSM, Givaudan, Ingredion, and Sensient; and small- and mid-sized companies with niche product portfolios. Many innovative, small companies are offering unique product lines that include faster formulation products and customized blends (e.g., JMH International, Redbrook Ingredients, and Campus). The shift from commodity to valued-added ingredients is expected to drive M&A with innovative, niche players identified as prime acquisition targets. Developed countries will see transaction activity rise, with technology, skilled labor, regulation, and strict patent protection acting as key drivers of deal volume. Emerging markets are also expected to show some incremental growth in M&A activity due to the rising number of health-conscious consumers. Cash-rich companies with sustainable operating cash flows, notably Givaudan, Symrise, and Frutarom (acquired by IFF in mid-2018 for $7.1 billion), have exhibited an increasing appetite for externalgrowth. Large corporations are looking for new ways to integrate small companies into their organizations, with an observed shift from the traditional M&A integration model (i.e., consolidation, integration, and delivery of immediate synergies) to a model granting the target more autonomy into the group. Food ingredients transaction multiples have increased sharply, driven by strong strategic buyer demand, substantial availability of private equity capital, and low interest rates.

Food companies will focus on sustainable ingredients to meet consumer demand, and innovative use of technology will play a greater role in helping to protect the environment. New approaches will be required, including strategic partnerships involving some unexpected allies. Greater collaboration across private companies, local/national governments and NGOs is also expected. Cargill is seeking products made with sustainable ingredients and using science to address sustainability challenges in agriculture and food production and to increase traceability. - Cargill Communications Director

12 NEWSLETTER FOOD & BEVERAGE www.globalma.com M&A Overview

Major Deal Drivers

Accessing New Markets: Long-term success in the Food Ingredients market is contingent upon having a global presence. For this reason, companies often seek geographic expansion to not only increase their customer base, but also to broaden the scope of product innovation to address different consumer preferences across markets. In 2018, Firmenich expanded its presence in South Africa with the acquisition of Flavourome, an established flavours company in the region. Roha, one of the leading global manufacturers and marketers in the food colour segment, acquired Italy-based Essential SRL in 2017.

Shift Towards Higher Value-Added Products: Commodity ingredients companies are looking to expand into the Specialty Ingredients segment to increase returns and reduce volatility. This move is illustrated by ADM with the $3.1 billion acquisition of Wild Flavours and DowDuPont’s $1.2 billion acquisition of FMC Corporation’s Health & Nutrition business in 2017. Natural, organic and plant-based ingredients companies are targets, underscored by Givaudan’s acquisition of Naturex and Sensient’s acquisition of the Natural Colour Business from GlobeNatural, both in 2018.

Access to New Technology: As innovation in the Ingredients industry is a key driver of growth, small companies with proven track records in innovation are targeted by large corporations, such as Lesaffre taking a majority stake in U.S. bioscience company Enverra. “Our acquisition of Ganeden strengthens our position in the nutritional actives market and enables us to use additional technologies to build our immune health and gut health market platforms,” said Frank Hayes, director of corporate affairs for Kerry Group, referring the acquisition in October 2017.

Consolidation: The Food Ingredients sector remains highly fragmented and is consolidating as companies accelerate acquisition growth strategies to increase market share and position, leverage cross-selling opportunities and expand capacity. Following the DowDuPont merger, the group announced that it will invest $10 billion in its food solutions business. Frutarom, acquired by IFF last year, has implemented an aggressive external growth strategy doubling in size every four years. “During the past five years, our many acquisitions have given us around 10,000 new customers who are now buying many solutions that we could not offer them in the past,” said Ori Yehudai, former CEO of Frutarom.

Larger Companies’ Appetite for Start-Ups: Start-ups are now widely recognized as invaluable sources of innovation, fueling growth and providing pioneering business solutions. Food & Beverage industry partnerships between start-ups and large firms will continue to grow as highlighted recently by Unilever and Cargill. Examples in the Food Ingredients industry include the collaboration of Naturex and Neovia to study and develop new natural and innovative animal nutrition and health solutions and the acquisition of PowderPure by IFF to further expand offerings for clean label solutions.

Increased Private Equity and Venture Capital Investment: Private equity and venture capital funds have been active investors in middle-market Food ingredients companies, with the sector’s organic growth, high margins, and consolidation opportunities being key draws. Since 2012, more than 34 financial investments were made in the Food Ingredients sector. Private equity groups are very supportive of strategies to accelerate external growth and international development. Solina, a French company specializing in taste and visual solutions for the meat industry, has completed more than eight acquisitions in Europe since its first buyout in 2012 backed by IK Investment and then Ardian in 2015.

13 NEWSLETTER FOOD & BEVERAGE www.globalma.com M&A Overview

M&A Activity Overview

The Food Ingredients industry has seen significant consolidation, averaging more than 40 transactions per year between 2000-2007. Transaction activity slowed following the global financial crisis as the industry shifted focus to organic growth and R&D investment, during which time a growing number of small players entered the market. In 2015, M&A activity began to reaccelerate as small, innovative players sought strategic partners with greater access to capital, brand recognition, and geographic reach. Larger Food & Beverage companies have shown an increasing preference for suppliers with international production and supply chains, which has been a catalyst for increased consolidation. Though the activity volume ceased in 2018, International Flavors & Fragrances Inc.’s ~$7 billion acquisition deal of Frutarom Industries contributed to major M&A value. M&A Activity (2015-2019YTD)

50 10 $7.5 B 39

40 8 Deal Deal Value ($B)

30 28 6 21 24

20 19 13 17 4 15 Deal Count(#) Deal 12 $2.3 B 9 10 $2.0 B 2 15 18 $1.8 B 7 $0.6B 9 9 0 0 2015 2016 2017 2018 2019YTD Deals with Deal Values Deals without Deal Values Deal Value ($B)

EBITDA multiples increased from an 8.0x-10.0x average range in 2012-2014 to greater than 14.0x in 2017-2019 for strategic transactions. The expansion in EBITDA multiples is due to the high level of liquidity in the market and an increased buyer appetite for this asset class.

Select M&A Transactions - Strategic

Select Strategic M&A Transactions (2017-2019YTD)

EV Ann. Date Target Company Target Description Country Bidder Company Country ($M)

Inno-Cosmic Sdn Bhd; Nation Distributor of instant beverage raw 20-Sep-19 Malaysia Connell USA USA - Maple Sdn Bhd materials

Vamo produkten voor de Bakkerij Producer of specialized concentrates and 18-Sep-19 Netherlands Sonneveld Group B.V. Norway - B.V. ingredient mixes for the bakery market Producer of bakery ingredients including 3-Sep-19 Broer Bakkerijgrondstoffen B.V. patisserie pastes, powders, almond paste, Netherlands Sonneveld Group B.V. Norway 6.7 persipan, and marzipan Engaged in providing cooking recipes and Antonio Viani Importe 1-Jul-19 Kochhaus GmbH Germany Germany - supplier of food ingredients GmbH Thaifoods Group Public 17-Jun-19 Food Blessing Co., Ltd. Maker of sauce and seasoning products Thailand Thailand 9.0 Company Limited Company that specializes in savory solutions International Flavors & 3-Jun-19 Wiberg Corporation, Inc. like seasoning blends, spices and functional Canada USA - Fragrances Inc. ingredients for the food industry

14 NEWSLETTER FOOD & BEVERAGE www.globalma.com M&A Overview

Select Strategic M&A Transactions (2017-2019YTD)

EV Ann. Date Target Company Target Description Country Bidder Company Country ($M) Engaged in global distribution of food 3-Jun-19 Prinova Group LLC ingredients to the food and nutrition USA Nagase & Co., Ltd. Japan 621.0 industries Engaged in production and distribution of 23-May-19 Sky Valley Foods LLC organic food dressings, condiments and USA Litehouse, Inc. USA - sauces Manufacturer of fine flavors, fragrances, 20-May-19 Golden Frog Vietnam Givaudan SA Switzerland - and essential oils

30-Apr-19 VKL Seasoning Pvt. Ltd Manufacturer of seasonings and flavors India Firmenich SA Switzerland -

Engaged in manufacturing of liquid food products including salad dressings, sauces, 2-Apr-19 Van Law Food Products, Inc. USA Stir Foods, LLC USA - marinades, syrups, beverage bases and flavorings

Provides natural citrus flavor ingredients for Archer Daniels Midland 15-Mar-19 Erich Ziegler GmbH Germany USA - flavor, food, and beverage Company Engaged in the business of providing pickles, brining fruits, vegetables, and 11-Mar-19 Valbona SpA Italy Polli SpA Italy - manufacturing salad dressings, vegetable relishes, sauces, and seasonings Jonjee Hi-tech Industrial Company engaged in production of 5-Mar-19 Guangdong Chubang Food China and Commercial Holding China 251.8 condiment Co., Ltd. 20-Feb-19 Watson Inc. Non-dairy food ingredient business USA Glanbia Nutritionals, Inc. Ireland 89.0

4-Feb-19 Yantai Andre Pectin Co. Ltd. Producer of specialty food ingredient China Royal DSM N.V. Netherlands -

Engaged in the processing and supplying American Dehydrated Foods, premium poultry ingredients to pet-food Inc.; International Dehydrated manufacturers; manufacturer of digestible 31-Jan-19 USA Symrise AG Germany 900.0 Foods, Inc.; IsoNova protein and natural chicken flavor Technologies LLC ingredients for food formulators and chefs; producer of pet food using egg protein

Distributor of flavors, shelf life extenders 17-Jan-19 Euroconsultant Sp. z o and other products predominantly for the Poland Azelis S.A. Belgium - meat segment

Producer of olive oils, flavored vinegars and 11-Jan-19 A L'Olivier France The Daregal Group France - salad dressings

Manufacturer of pharmaceutical excipients 12-Dec-18 Crest Cellulose Private Ltd. India Roquette Freres S.A. France - and food ingredients

Developer, producer and supplier of 1-Nov-18 Flavormatic Industries Inc. essential oils, powdered and liquid flavors, USA Flavor Producers Inc USA - flavored juice blends and cloud emulsions.

Engaged in discovering, developing, and commercializing flavor ingredients and 17-Sep-18 Senomyx Inc. natural high intensity sweeteners for the USA Firmenich SA Switzerland 69.0 packaged food, beverage, and ingredient supply industries

Company specializing in the production of ingredients and additives for various 14-Sep-18 Nutramax Brazil Disproquima Spain - sectors. Nutramax specializes in replacing sugar, sodium, reducing calories in food and beverages, and functional ingredients.

Guangzhou Baihua Flavors and Sugar producer; manufacturer of seasoning Lonkey Industrial Co., Ltd. 12-Sep-18 Fragrances Co., Ltd.; Guangzhou China China - fragrance and forage fragrance Guangzhou Huatang Co., Ltd.

Manufacturer and supplier of food 13-Jul-18 Harold T. Griffin Inc. Canada Caldic B.V. Netherlands - ingredients and blending solutions

15 NEWSLETTER FOOD & BEVERAGE www.globalma.com M&A Overview

Select Strategic M&A Transactions (2017-2019YTD)

EV Ann. Date Target Company Target Description Country Bidder Company Country ($M) Develops and manufactures flavors and International Flavors & 7-May-18 Frutarom Industries, Ltd. ingredients used in the F&B, pharma, Israel USA 7,035.9 Fragrances Inc. nutraceutical and cosmetic industries

Supplies a range of dairy products, sugars, United United 13-Apr-18 Garrett Ingredients Ltd stabilisers, emulsifiers, dextrose, and Kent Foods, Ltd. 2.6 Kingdom Kingdom glucose

Manufacturer of organic seasonings and 30-Mar-18 Carolina Ingredients, LLC USA Mitsubishi Corporation Japan - food ingredients Manufacturer of natural ingredients for 26-Mar-18 Naturex SA food, dietary supplement and nutraceutical, France Givaudan SA Switzerland 1,811.9 pharmaceutical and cosmetic industries

8-Feb-18 GlobeNatural Natural food and ingredient company Peru Sensient Technologies USA 8.7

Provides stabilizers to health and food 1-Feb-18 Acatris Holding BV Netherlands Caldic B.V. Netherlands - ingredients companies

Manufacturer of specialty rice and soy- 30-Jan-18 California Natural Products Inc. based ingredients for blue-chip consumer USA Gehl Foods, LLC USA - food brands

Citratus develops and manufactures 17-Jan-2018 Citratus Fragrances Brazil Symrise Germany - fragrances, flavors and essencial oils

Produces ready-to-use food ingredients 10-Jan-18 Estrategia en Alimentos SA and preparations for the milling, baking Mexico Eurogerm SA France - and pastry industry

Engaged in producing organic flavors for the 21-Dec-17 Natural Flavors Inc. USA Firmenich SA Switzerland - food and beverage industry

Bremil Industria De Produtos Manufacturer and supplier of food additives 20-Dec-17 Brazil Frutarom Industries, Ltd. Israel 73.0 Alimenticios Ltda. and flavorings solutions

Manufactures fructose and glucose syrups, National Company for Maize 15-Nov-17 starches and modified starches for Egypt Cairo Three A Group Egypt 82.0 Products pharmaceutical and food industry

Provider of nutraceutical and functional 6-Nov-17 NutraGenesis LLC USA Innophos Holdings, Inc. USA 27.3 ingredients for dietary supplements

Engaged in manufacture and supply of spices, marinades, flavorings, starter 25-Oct-17 Arne B. Corneliussen AS Norway Orkla Food Ingredients AS Norway - cultures and other functional ingredients, and providing packaging solutions

Mighty International Co.,Ltd.; 18-Oct-17 Manufacturer of food ingredients Thailand Frutarom Industries, Ltd. Israel - Maharaj Food Co. Ltd.

Developer and manufacturer of ingredients 9-Oct-17 Probelte Biotecnologia S.L. Spain Euromed S.A USA - used in natural dietary supplements

Provider of dyes, pigments, flavors and 6-Oct-17 Colarome inc. Canada Capol GmbH Germany - extracts for the natural ingredient sector

Mae Terra Produtos Naturais e United 2-Oct-17 Producers of organic food ingredients Brazil Unilever Plc - Organicos Kingdom Supplier, distributor, blender and re- 28-Sep-17 Seidler Chemical Co, Inc packager of specialty chemicals and USA Maroon Group LLC USA - ingredients

27-Sept-17 Kohinoor Specialty Foods India Supplier and distributor of Indian spices India McCormick & Company USA -

Engaged in formulation, mixing and 8-Sep-17 Grama Aliment S.L. commercialization of preparations, Spain Solina Group SAS France - ingredients, spices and additives

Engaged in production and sale of pulses, 6-Sep-17 Geovita Functional Ingredients Italy Ebro Foods SA Spain 45.3 grains and other healthy ingredients

22-Aug-17 Muehlehof Gewuerze AG Flavor and food ingredient producer Switzerland Frutarom Industries, Ltd. Israel 7.0

United 15-Aug-17 Flavours and Essences Limited Producer of flavors and natural colors Frutarom Industries, Ltd. Israel 19.5 16 NEWSLETTER FOOD & BEVERAGE Kingdom www.globalma.com M&A Overview

Select Strategic M&A Transactions (2017-2019YTD)

EV Ann. Date Target Company Target Description Country Bidder Company Country ($M) Specialty chemicals and ingredient 4-Aug-17 The E.T. Horn Company USA IMCD N.V. Netherlands - distributor

Provider of dietary supplement ingredient 1-Aug-17 Novel Ingredient Services, LLC USA Innophos Holdings, Inc. USA 125.0 solutions

Imports, manufactures and markets United 25-Jul-17 Chemcolour Industries Ltd New Zealand Azelis S.A. - specialty chemicals and food ingredients Kingdom

American brand of prepared mustards, French’s Food Companies and 18-Jul-17 condiments, fried onions, and other food USA McCormick & Company USA 4,200 Tigers Milk items Operates with the manufacture of natural 14 Jul 2017 and artificial flavors, aimed at the Citromax Essências Brazil Frutarom Brazil - beverages, biscuits, breads, cakes, dairy, confectionery, among others, sectors Specializes in dairy ingredients, foods, 11-Jul-17 Vika B.V. stocks, vegetable extracts among other Netherlands Givaudan SA Switzerland - specialty ingredients

3-Jul-17 Flavor Ingredient Holdings, LLC Produces and sells food flavorings USA T.Hasegawa Co, Ltd. Japan -

Producer of ingredients and distillery 27-Jun-17 Illinois Corn Processing, LLC USA Pacific Ethanol Inc. USA 61.0 products

Rover Indústria e Comércio de Focuses on the production of fruit 23 Jun 2017 Brazil Döhler Germany - Produtos Alimentícios preparations, toppings and fillings

Producer of wheat-based glucose, starch Archer Daniels Midland 6-Jun-17 Chamtor SA France USA - and proteins Company

Offers a large range of products, such as 31 May 2017 Itacel Brazil Roquette France - binders, fillers, and disintegrates

Engaged in development, production and 4-Apr-17 Rene Laurent SAS France Frutarom Industries, Ltd. Israel 21.3 marketing of flavors and natural extracts

Produces, markets, and distributes United 3-Apr-17 Orchard Valley Foods Limited confections, edible decorations, and powder Orkla Food Ingredients AS Norway - Kingdom food ingredients

27-Mar-17 Supremia Grup S.R.L. Producer and supplier of food ingredients Romania Solina Group SAS France -

Rathi Food Industries; Empire Spices & Foods 1-Mar-17 Manufacturer of spices India India 7.1 Rambandhu Masalewale Limited

Engaged in the manufacturing and Tianning Flavour & Fragrance Ireland 21-Feb-17 exporting of fragrances, food additive and China Kerry Group plc - (Jiangsu) Co., Ltd. (Republic) other chemical products

Produces beverage, sweet & savory flavors Ireland 21-Feb-17 Taste Master Pty. Ltd. Australia Kerry Group plc - for snack and meat & culinary industries (Republic)

Develops and supplies natural and artificial 9-Feb-17 Unique Flavors South Africa Frutarom Industries, Ltd. Israel 6.7 flavors within Africa

Manufactures and distributes marinade 25-Jan-17 Cajun Injector USA McCormick & Company USA - injectors, seasonings, and fry mixes

Engaged in producing natural and organic 17-Jan-17 Activ International SA flavors and extracts, natural colors and Switzerland Givaudan SA Switzerland - specialty grill flavors

Supplier of special ingredients, premixes 3-Jan-17 Palsgaard Candon S.A. Brazil Palsgaard A/S Denmark - and bakery emulsifiers to the food industry

EV/Revenue EV/EBITDA

Mean 1.6x 15.4x

Median 1.7x 14.9x

17 NEWSLETTER FOOD & BEVERAGE www.globalma.com M&A Overview

Top Strategic Buyers by Deal Value (2015-2019YTD)

Marquee strategic transactions include the $7.1 billion acquisition of Frutarom Industries by IFF and two acquisitions by Givaudan totaling over $2.1 billion, both in 2018.

M&A Activity (2015-2019YTD)

7,500 7,278

6,000

4,500

3,000 2,152 1,500 900

689 582 581 461 381 372 344 Deal Value ($M)Value Deal 0 International Givaudan SA Symrise AG Monster The Carlyle Nagase & Co., Eurazeo SA Charterhouse Frutarom Pacific Equity Flavors & Beverage Group Ltd. Capital Industries, Partners Pty Fragrances Corporation Partners X LP Ltd. Ltd. Inc.

Private equity and venture capital investors are attracted to the growth and margin profiles of Food ingredients companies, and with the high level of industry fragmentation, see significant opportunity to fund organic growth and buy- and-build strategies. This trend is further indicated by robust transaction volume, strong valuation multiples, and substantial growth of smaller companies. This is portrayed by Beijing Yongyu Investment Management’s $1.2 billion acquisition of Baolingbao Biology in the China market.

Select M&A Transactions - Financial

Select Financial M&A Transactions (2017-2019YTD)

EV Ann. Date Target Company Target Description Country Bidder Company Country ($m)

Leading international producer of essential One Rock Capital Partners, 21-Oct-19 Innophos Holdings, Inc USA USA 932 ingredients LLC

General Atlantic Service 15-Aug-19 Motif Ingredients Food ingredients company USA USA - Company, L.P. ; CPT Capital

Producer of spices, flavoring extracts and Falfurrias Capital Partners, 21-Jun-19 The C.F. Sauer Company Inc. USA USA - other food products LP

17-Apr-19 Maya Kaimal Fine Indian Foods Producer of Indian sauces and condiments USA North Castle Partners, LLC USA -

MBG Mittelstaendische Beteiligungsgesellschaft Engaged in the development and Baden-Wuerttemberg distribution of activatable flavor and GmbH; High-Tech 24-Jan-19 4GENE GmbH Germany Germany - fragrance precursors for cosmetics, food Gruenderfonds and industrial fragrance warning systems Management GmbH; VC Fonds BW; Goldmann International GmbH

Pays De La Loire Developpement, SCR; Le 10-Jan-19 AlgoSource Food ingredients and supplements producer France Fonds Litto Invest SCR; France - Pays de la Loire Participations SAS

18 NEWSLETTER FOOD & BEVERAGE www.globalma.com M&A Overview

Select Financial M&A Transactions (2017-2019YTD)

EV Ann. Date Target Company Target Description Country Bidder Company Country ($m) Engaged in the manufacture of natural flavors and colors for applications in the 17-Oct-18 Aromata Group s.r.l. Italy Ambienta Sgr SpA Italy - food and beverage, pharma, nutraceutical, and cosmetics industries

A worldwide leader in biotechnological AEB Bioquímica Latino United 18 Sep 2018 ingredients and related services for wine, Brazil Apax Partners - Americana Kingdom food and beverage.

EQT Partners AB; Public Distributor of specialty chemicals and food 19-Jun-18 Azelis S.A. Belgium Sector Pension Investment Sweden - ingredients Board

Engaged in the processing, manufacturing Beijing Yongyu Investment 8-Feb-18 Baolingbao Biology Co., Ltd. and sales of oligosaccharide, high fructose China China 1,165.4 Management Co., Ltd. syrup and tetrahydroxy butane

16-Jan-18 Chicago Custom Foods LLC Manufacturer and marketer of seasoning USA Highlander Partners, L.P. USA -

27-Nov-17 Hunjin Green Meal Co., Ltd. Distributor of food additives and ingredients South Korea Anchor Equity Partners South Korea 100.5

Developer and manufacturer of custom 2-Oct-17 Parker Products Inc USA The Riverside Company USA - specialty ingredients for F&B companies

Manufacturer and distributor of bakery Pamplona Capital United 17-Jul-17 BakeMark USA LLC USA - ingredients, products and supplies Management LLP Kingdom

Manufacturer and distributor of flavors and 3-Jul-17 Iberchem S.A. fragrances for household, personal care, Spain Eurazeo SA France 461.3 perfumery and food sectors

Provider of ingredients and base food 9-Jun-17 Irca S.p.A. products for pastry-making, baking and ice- Italy The Carlyle Group USA - cream retailing

Engaged in sourcing and marketing 4-Apr-17 Agridient B.V. ingredients used in industries such as food, Netherlands Nimbus BV Netherlands - pharmaceutical and pet food

Producer of specialty ingredients for food, 2-Feb-17 Niacet Corporation feed, and pharmaceutical applications such USA SK Capital Partners USA - as propionates and acetates

Manufacturer and distributor of bakery United 31-Jan-17 Allied Mills Pty Limited Australia Pacific Equity Partners 344.3 premixes, flour and semi-finished products Kingdom

Manufacturer and distributor of nutritional OmniActive Health Technologies Everstone Capital Advisors 2-Jan-17 and active natural ingredients to healthcare, India India - Limited Pvt. Ltd. food and personal care industries

EV/Revenue EV/EBITDA

Mean 2.4x 17.9x

Median 2.2x 14.5x

19 NEWSLETTER FOOD & BEVERAGE www.globalma.com 5

Peer Trading Analysis

The overall Food Ingredients market is trading at an average EBITDA multiple of 15.3x, significantly influenced by higher multiples in the specialty-driven ingredients markets. Specialty-driven ingredients registered an EV/EBITDA multiple of 18.6x compared to 10.4x for commodity-driven ingredients.

Margin (%) EV/ EBITDA EBIT Sales (x) EBITDA (x) EBIT (x) Company Name Market Cap ($M) EV ($M) LTM LTM LTM LTM LTM Specialty Driven Ingredients Givaudan SA 26,423 30,166 19.2% 14.6% 4.9x 25.8x 34.0x McCormick & Company, Incorporated 21,323 25,831 20.8% 18.1% 4.8x 22.9x 26.2x Kerry Group plc 22,618 24,944 14.0% 11.4% 3.2x 22.6x 27.6x Otsuka Holdings Co., Ltd. 22,341 22,196 11.9% 7.0% 1.8x 15.0x 25.6x International Flavors & Fragrances Inc. 14,011 18,340 21.8% 15.6% 3.6x 16.6x 23.1x Symrise AG 12,777 14,120 20.0% 13.6% 3.8x 19.0x 27.8x Chr. Hansen Holding A/S 10,291 11,099 34.0% 29.6% 8.7x 25.6x 29.4x AAK AB (publ.) 4,712 5,129 9.4% 7.5% 1.8x 19.1x 24.0x Angel Yeast Co., Ltd 3,574 3,962 20.6% 14.3% 3.9x 18.7x 27.0x Sensient Technologies Corporation 2,702 3,325 17.8% 13.6% 2.5x 14.0x 18.4x MGP Ingredients, Inc. 759 802 15.7% 12.7% 2.1x 13.6x 16.8x Eurogerm SA 151 144 10.3% 8.0% 1.1x 10.7x 13.8x Mean 17.9% 13.8% 3.5x 18.6x 24.5x

Median 17.8% 13.6% 3.4x 18.9x 25.9x

Commodity Driven Ingredients DuPont de Nemours, Inc. 40,339 70,110 18.9% 12.2% 0.8x 4.3x 6.7x Archer-Daniels-Midland Company 34,462 33,112 3.9% 2.4% 0.5x 13.1x 21.5x Associated British Foods plc 4,437 23,766 12.2% 8.4% 1.2x 9.9x 14.4x Koninklijke DSM N.V. 9,301 22,938 16.2% 10.5% 2.3x 14.3x 22.1x Bunge Limited 10,127 15,632 3.7% 2.0% 0.4x 10.0x 18.5x Ingredion Incorporated 196,915 7,448 16.1% 12.4% 1.3x 8.1x 10.5x Tate & Lyle plc 551 4,886 17.0% 10.9% 1.4x 8.2x 12.8x Corbion N.V. 15,062 2,227 13.9% 8.7% 2.1x 15.1x 24.3x Mean 12.8% 8.4% 1.3x 10.4x 16.3x

Median 15.0% 9.6% 1.3x 9.9x 16.5x

Overall Mean 15.9% 11.7% 2.6x 15.3x 21.2x

Overall Median 16.1% 11.8% 2.1x 14.6x 22.6x

Source: Capital IQ as of 13 November 2019

20 NEWSLETTER FOOD & BEVERAGE www.globalma.com Peer Trading Analysis

Peer Average vs. S&P Food & Beverage Index

• The Food Ingredients market has underperformed as against the broader Food & Beverage industry with year-over- year growth of (4.5%), below the S&P Food & Beverage Select Industry Index (equities classified in the GICS Food & Beverage sub-industry of the S&P Total Market Index). • MGP Ingredients saw its stock price appreciate 242.8% during the last five years, increasing from $13.0 in Nov 2014 to $44.6 in Nov 2019. However, the company has seen a fall of (34.4%) in share price in last one year as the sales of aged whiskey has lagged as per the company’s expectation. • McCormick & Company, which specializes in manufacturing, marketing, and distribution of spices, seasoning mixes, condiments, and other flavorful products to the food industry, witnessed a 119.1% increase in share price during the last five years, primarily attributed to acquisitive growth (2 transactions completed in five years). • Specialty-driven ingredients have shown higher share price growth compared to their commodity-driven ingredients peers. In addition, the specialty food ingredients sector has outperformed the broader F&B industry, driven by continued innovation, new market entrants, increased consolidation, and growing private equity and venture capital investment. (% change) 5Y 3Y 1Y 6 Months Specialty Driven Ingredients AAK AB (publ.) 103.5% 84.4% 25.8% 10.4% Angel Yeast Co., Ltd 245.9% 74.2% 41.2% 11.1% Eurogerm SA 87.8% 45.5% (14.5%) (7.1%) Kerry Group plc 89.1% 89.3% 20.1% 11.8% McCormick & Company, Incorporated 119.1% 75.3% 6.7% 2.4% Chr. Hansen Holding A/S 88.9% 45.8% (20.1%) (26.5%) International Flavors & Fragrances Inc. 31.1% 10.8% (10.0%) (3.6%) MGP Ingredients, Inc. 242.8% 6.5% (34.4%) (33.2%) Givaudan SA 70.9% 60.9% 19.9% 13.2% Sensient Technologies Corporation 5.6% (15.1%) (3.3%) (9.8%) Symrise AG 67.5% 58.1% 15.5% (0.5%) Otsuka Holdings Co., Ltd. 20.1% (8.1%) (16.4%) 16.5% Commodity Driven Ingredients Associated British Foods plc (33.6%) (3.6%) (8.1%) (3.7%) Archer-Daniels-Midland Company (14.2%) 4.3% (9.8%) 2.6% Ingredion Incorporated 5.7% (27.4%) (19.2%) (1.2%) Tate & Lyle plc (7.6%) 8.8% 1.8% (7.9%) Corbion N.V. 84.4% 49.1% 8.8% 2.7% DuPont de Nemours, Inc. (51.8%) (55.2%) (59.0%) (23.6%) Bunge Limited (36.9%) (13.2%) (11.8%) 3.8% Koninklijke DSM N.V. 102.7% 113.0% 43.5% 15.9% Peer Average 6.1% 8.7% (4.5%) 1.3% S&P Food and Beverage 31.1% 17.6% 0.8% (0.2%)

Source: Capital IQ as of 13 November 2019

21 NEWSLETTER FOOD & BEVERAGE www.globalma.com Peer Trading Analysis

Peer Average vs. S&P Food & Beverage

250.0

200.0

150.0

100.0 (Indexedto 100) 50.0

0.0 Nov-14 Sep-15 Jul-16 May-17 Mar-18 Jan-19 Nov-19

Specialty Driven Peer Average¹ Commodity Driven Ingredients Peer Average² S&P Food & Beverage Select Industry Index

Source: Capital IQ as of 13 November 2019

Note 1: Specialty-driven Ingredients: AAK, Angel Yeast, Eurogerm, Kerry Group, McCormick & Company, Chr. Hansen Holding, International Flavors & Fragrances, MGP Ingredients, Givaudan, Sensient Technologies, Symrise and Otsuka.

Note 2: Commodity-driven Ingredients: Associated British Foods, Archer Daniels Midland, Ingredion, Tate & Lyle, Corbion, Dow DuPont, Bunge and Koninklijke DSM NV.

Historical EV/NTM EBITDA Analysis

18.0x

16.0x

14.0x

12.0x

10.0x (EV/NTM (EV/NTM EBITDA) 8.0x

6.0x Nov-14 Sep-15 Jul-16 May-17 Mar-18 Jan-19 Nov-19

Average -Specialty Driven Ingredients¹ Average -Commodity Driven Ingredients ²

Source: Capital IQ as of 13 November 2019

Note 2: Commodity-driven Ingredients: Associated British Foods, Archer Daniels Midland, Ingredion, Tate & Lyle, Corbion, Dow DuPont, Bunge and Koninklijke DSM NV.

22 NEWSLETTER FOOD & BEVERAGE www.globalma.com Peer Trading Analysis

Historical EV/LTM EBITDA Analysis

23.0x

20.0x

17.0x

14.0x

11.0x (EV/LTM (EV/LTM EBITDA)

8.0x

5.0x Nov-14 Sep-15 Jul-16 May-17 Mar-18 Jan-19 Nov-19

Average - Specialty Driven Ingredients¹ Average Commodity Driven Ingredients²

Source: Capital IQ as of 13 November 2019

Note 2: Commodity-driven Ingredients: Associated British Foods, Archer Daniels Midland, Ingredion, Tate & Lyle, Corbion, Dow DuPont, Bunge and Koninklijke DSM NV.

Total EV/NTM EBITDA vs. EV/LTM EBITDA Comparison

19.0x

17.0x

15.0x

13.0x

11.0x

9.0x

(EV/(NTM/LTM)EBITDA) 7.0x

5.0x Nov-14 Sep-15 Jul-16 May-17 Mar-18 Jan-19 Nov-19 Total EV/NTM EBITDA Average Total EV/LTM EBITDA Average

Source: Capital IQ as of 13 November 2019

Note 2: Commodity-driven Ingredients: Associated British Foods, Archer Daniels Midland, Ingredion, Tate & Lyle, Corbion, Dow DuPont, Bunge and Koninklijke DSM NV.

23 NEWSLETTER FOOD & BEVERAGE www.globalma.com Peer Trading Analysis

Historical EV/LTM EBITDA Analysis

25.0%

20.0%

15.0%

10.0%

5.0%

0.0% 2016 2017 2018 2019E 2020E (5.0%) Specialty Revenue Growth¹ Commodity Revenue Growth²

Specialty EBITDA Margin Commodity EBITDA Margin

Source: Capital IQ as of 13 November 2019

Note 2: Commodity-driven Ingredients: Associated British Foods, Archer Daniels Midland, Ingredion, Tate & Lyle, Corbion, Dow DuPont, Bunge and Koninklijke DSM NV.

24 NEWSLETTER FOOD & BEVERAGE www.globalma.com Overview of GMAP 6 Food and Beverage Team EUROPE

Michael Petit* Heike Jandl Ivars Pinkulis Managing Director Managing Director Partner +33 6 30 80 71 66 +43 1 99 00 220-0 +371 67212324 [email protected] [email protected] [email protected] FRANCE AUSTRIA LATVIA Philipp Elsen Pal Farkas Paul McGlone Director Partner Director +49 211168 0228 +36 1 275 1116 +0161 393 1983 [email protected] [email protected] [email protected] GERMANY HUNGARY UNITED KINGDOM Ronald van Rijn Frederic de Boer Partner Partner +31 (0) 6 533 409 75 +41 44 755 59 99 [email protected] [email protected] NETHERLANDS SWITZERLAND

AMERICAS Daniel Gomez* Esteban Olivera Alex Cerri Director Managing Partner Partner +1 312 658 4789 +54 11 2150 7185 +55 11 3165 5804 [email protected] [email protected] [email protected] UNITED STATES ARGENTINA BRAZIL Ian Macdonell Ignacio Rodríguez Luis Ortiz Managing Director Vice President Partner +1 416 362 1953 +5622 580 6000 +52 555520 3144 [email protected] [email protected] [email protected] CANADA CHILE MEXICO Mónica Com Partner +511 203 9800 [email protected] PERU

ASIA Bingyu Chen Jacob Won Deepak Ladha Partner Partner Managing Director +86 106 520 2002 +82 2 3478 9802 +91 98203 48614 [email protected] [email protected] [email protected] CHINA SOUTH KOREA INDIA

Note: * Denotes Co-heads of the Food & Beverage team

25 NEWSLETTER FOOD & BEVERAGE www.globalma.com Overview of GMAP Food and Beverage Team Select Ingredient Transactions

About Us

Established in 1999, Global M&A Partners is one of the major international M&A networks comprised of independent investment banking firms partnering to provide international scope and local market expertise to our clients. We operate in more than 30 countries across 4 continents and have completed over 1,500 transactions since 2010 typically ranging from €20 to €500 million. Our Food & Beverage team is comprised of seasoned M&A professionals from more than 18 partner countries with extensive knowledge of the dynamics and innovative changes occurring globally and locally in the Food & Beverage industry (e.g., changing consumer preferences, rapid food innovation, shifting supply chain, etc.). Our M&A activity in the Food & Beverage sector is robust and includes many cross-border transactions, driven by international growth, strategic tuck-ins, and consolidation. Given our sector experience, transaction expertise, and unparalleled access to local decision makers, we can work together to offer customized M&A solutions and premium valuations for our clients.

26 NEWSLETTER FOOD & BEVERAGE www.globalma.com