Year-End Review
Food for Thought
rich industry knowledge, and deep relationships to deliver successful advisory and Overview, Analysis, and Trends William Blair’s investment banking group combines signi�icant transaction experience, in the Food and Food Retailing Industries �inancing solutions to our global base of corporate clients. We serve both publicly traded suiteand privately of services held allows companies, us to be executing a long-term mergers partner and to acquisitions, our clients as growth they grow �inancing, and special situations and restructuring, and general advisory projects. This comprehensive About William Blair Investment Banking evolve. In 2012, the investment banking group completed 76 merger-and-acquisition transactions worth more than $13.8 billion in value, involving parties in 21 countries and �ive continents, and was an underwriter on over 20% of all U.S. initial public offerings. William Blair
Table of Contents
William Blair’s Industry Update – Calendar 2013 ...... 1 Selected Monthly M&A Activity – December ...... 2 Noteworthy M&A Activity – LTM ...... 6 Historical M&A Trends in the Food and Food Retailing Industries ...... 9 Volume Trends ...... 9 Participant Trends ...... 10 Valuation Trends ...... 11 Public Company Trading Statistics ...... 12 Food Production Companies ...... 12 Food Ingredients Companies ...... 13 Beverage Production Companies ...... 13 Food Retail Companies ...... 14 Convenience Store Companies ...... 14 Same-Store Growth – Food & Convenience Retail ...... 15 U.S. Public Equity Financing Summary – LTM ...... 16 IPOs ...... 16 Follow-Ons ...... 16 Selected Upcoming Industry Events ...... 17 General Market Update...... 19 Quarterly Market Update – All Industries ...... 23 Domestic M&A Market Summary ...... 20 U.S. Activity Trends ...... 20 U.S. Valuation Trends...... 21 U.S. Equity Capital Markets Summary ...... 22 Debt Capital Markets Summary ...... 23 William Blair Food & Beverage and Food Convenience & Retail Investment Banking ...... 24 Recent William Blair Consumer & Retail Transactions ...... 26 William Blair Consumer & Retail Coverage ...... 27 Notes ...... 28 Disclosures ...... 29
Food For Thought Table of Contents
William Blair
William Blair’s Industry Update – Calendar 2013
Calendar 2013 was one of the most active years for deal activity in the food retail industry since the early 2000s. Market exits, consolidations, and initial public offerings have reinvigorated many segments of the $1 trillion industry, drawing interest from both public and private investors.
In the capital markets, public food and convenience retailers performed strongly, with William Blair’s food retail group up 66.6% for 2013. The median LTM EBITDA multiple across our group is 7.4 times, indicating that public food retailers are in better financial health. A few standouts led the pack: Natural Grocers by Vitamin Cottage was up 122% for the year, reflecting very strong performance across new and existing markets, and SUPERVALU finished up 195%, as its sale of the Albertson’s, Acme, Jewel-Osco, and Shaw’s banners to New Albertson’s strengthened SUPERVALU’s balance sheet and returned the company to its wholesale roots. In the new-issuance market, 2013 hosted the IPOs of Fairway and Sprouts Farmers Market, two high-growth companies in the specialty/natural/organic sector of food retail. The Sprouts IPO in July was very well received by the market (its stock is up 110% since the IPO), and the company broke the lock-up provision in November with a $629 million follow-on offering consisting of 100% secondary shares sold by its private equity backer, Apollo Global Management. Fairway’s IPO in April was similarly received, although softening performance during the third quarter put pressure on the stock and its price has dropped below that of its IPO. Both retailers have truly differentiated offerings, impressive unit models, and significant expansion potential, so growth prospects remain bright. Looking to 2014, one anticipated IPO is Southeastern Grocers, the holding company for BI-LO and Winn Dixie. This company’s performance post-recession has illustrated effective merger integration between the two banners and the success that certain traditional grocers have achieved in the face of considerable competition from Wal-Mart.
M&A activity was equally robust in 2013. Five notable transactions altered the food retail landscape: 1) the $3.3 billion acquisition by New Albertson’s of the Albertson’s, Acme, Jewel-Osco, and Shaw’s banners from SUPERVALU; 2) the $2.4 billion acquisition of Harris Teeter by Kroger; 3) the $775 million merger of Spartan Stores and Nash Finch; 4) the $365 million acquisition of Arden Group (parent of Gelson’s) by TPG Capital; and 5) the $265 million acquisition of the Sweetbay, Harveys, and Reid’s banners by Southeastern Grocers from Delhaize. An additional event, albeit not culminating in a broad M&A event, was the decision by Safeway to close the Dominick’s banner and its 72 locations, ending the 95-year history of Dominick’s in the Chicago market. As of mid-January, roughly 20 of the 72 locations have been acquired or assumed by other food retailers, with Roundy’s picking up 11 locations for its upscale Mariano’s banner. This event has had and will continue to have a meaningful impact on the competitive landscape for the Chicago food retail market.
We expect 2014 to continue to experience heavy activity in both the equity and M&A markets, although we believe M&A activity will be dominated by market exits and smaller consolidations that were prevalent in 2013. The shift by upstart food retailers into specialty/natural/organic will continue to affect the broader food retail space and challenge traditional operators to follow suit.
Mike Siska Managing Director, Consumer and Retail +1 312 364 5393 [email protected]
Food For Thought William Blair’s Industry Update – Calendar 2013 1
William Blair
Selected Monthly M&A Activity – December
Food & Beverage Producer Transactions
($ in millions)
Date Target (Unit Sold)/ Target Enterprise Enterprise Value/LTM Announced Target Business Description Nation Buyer Value Sales EBITDA 12/30/13 Chongqing Beer Group Assets Management China Carlsberg $255.2 - - Owner and operator of breweries in China 12/30/13 Biotral Norway Seaweed Energy Solutions - - - Producer of seaweed 12/30/13 New England Tea & Coffee United States Reily Foods - - - Roaster and marketer of flavored coffees and teas 12/30/13 Mondelez International United States Back to Nature Foods - - - (Snackwell's Cookie and Snacks Business) (Brynwood Partners) Manufacturer and marketer of snack products 12/30/13 Hemglass (The operations in Sweden and Denmark ) Sweden Varsego Sverige - - - Producer of ice creams 12/29/13 Hjem-Is Europa Denmark Viking-Is - - - Distributor and manufacturer of ice cream 12/27/13 Sunny Apple Bulgaria CSIF - - - Producer and distributor of apples 12/27/13 DeMet's Candy United States Yildiz Holding $221.0 - - Producer of candy and snack products 12/27/13 Mehana Brewing United States DeMare Enterprises - - - Brewer of beer 12/27/13 Sugardaddy's Sumptuous Sweeties United States Private Investor (Lisa and - - - Manufacturer of sweets Dan Anglim) 12/26/13 Vinacafe Bien Hoa (24%) Vietnam Gaoling Fund $159.9 1.58x 11.0x Manufacturer of coffee and cereals 12/26/13 Login Beverage (80%) South Korea Lotte Chilsung Beverage Co $38.2 - - Manufacturer of mineral water 12/25/13 Osaka Daiichi Rice Deal (21%) Japan Itochu Corp $8.2 - - Wholesaler of rice and other foods 12/24/13 Jamnica (Fruit Juice Business) Croatia Stanic D.O.O. $61.5 - - Juicy, TO, Juicy Fruits, Juicy Kids and Juicy Vita brands 12/24/13 Dalian Xinzhonghai Seafood Products China Zhangzidao Group Co $45.8 - - Manufacturer and distributor of seafood products 12/24/13 Basmati Rice Germany Amira Nature Foods - - - Producer of rice 12/23/13 Comércio E Indústria De Massas Alimentícias Brazil Seara Alimentos $109.6 - - Massa Leve Manufacturer of pasta and frozen food products 12/23/13 Evol Foods United States Boulder Brands $48.0 - - Maker of made-from-scratch natural and organic frozen meals and snacks 12/23/13 Goodman Fielder (Biscuits business) Australia Nestle $15.2 - - Manufacturer of food ingredients 12/23/13 Bebidas del Paraguay Paraguay Compania Cervecerias - - - Producer of soft drinks Unidas 12/23/13 Siggi's United States Emmi - - - Maker of Icelandic-style thick yogurt 12/21/13 United Wineries Holdings Spain Federico Paternina - - - Producer and marketer of wine 12/20/13 Frutos De Cuyo, Dulciora and Productos Naturales Argentina La Campagnola - - - Producer and distributor of jams Note: Includes change-of-control transactions globally (unless otherwise indicated), announced as of December 31, 2013 Sources: Dealogic and Capital IQ
Food For Thought 2 Selected Monthly M&A Activity – December
William Blair
Food & Beverage Producer Transactions (cont.)
($ in millions)
Date Target (Unit Sold)/ Target Enterprise Enterprise Value/LTM Announced Target Business Description Nation Buyer Value Sales EBITDA 12/20/13 Kiwi Pacific Foods (50%) New Zealand Veritas Investments $5.6 - - Manufacturer of meat patties 12/19/13 United Dairy Products Australia Chinarise Capital - - - Supplier of milk and dairy ingredients
12/19/13 Shanghai Jinsihou Food China Hershey Netherlands $584.0 - - Manufacturer and marketer of sweets and chocolates 12/19/13 Francoise Sciard Jabiol France Groupe Industriel Marcel - - - Owner and operator of wineries Dassault
12/18/13 HAGESÜD INTERSPICE GEWÜRZWERKE Germany Israel Chemicals - - - Producer and marketer of spices and spice mix preparations for end-users 12/18/13 Premium Wine Group and Lieb Cellars United States Premium Beverage Group - - - Producer of wine 12/17/13 Allens United States Seneca Foods Corp. $148.0 - - Processer and supplier of canned and frozen vegetables 12/17/13 Birkel Teigwaren Germany Newlat $39.9 - - Producer of pasta, noodles and sauces 12/17/13 PrimaBaguz Malaysia Ekuiti Nasional Bhd - $12.4 - - Provider of halal processed meat to caterers Ekuinas 12/17/13 Jiaxing Songcun Foodstuff China Haixin Foods Co $12.3 - - Manufacturer of frozen food 12/17/13 Ebro Foods Germany Newlat (TMT Finance) - - - Manufacturer of pasta 12/16/13 Mayanot Eden Israel Edtom $32.2 - - Producer and marketer of bottled water in Israel 12/13/13 Splash Water United States DS Waters of America - - - Provider of bottled spring and purified drinking water 12/12/13 Hofmann Menue-Manufaktur Germany Partners Group Holding - - - Manufacturer of frozen meals 12/12/13 Heli Food Czech Republic Yazico Investments; - - - Manufacturer of ready meals, soups and sauces Axentia Financial Consultants 12/11/13 Petrokholod (48%) Russian Private Investor (Kakabadze - - - Producer of ice cream Federation Badri Davidovich) 12/10/13 Driftwood Dairy Holding Corporation United States Vietnam Dairy Products Joint $10.0 0.10x - Producer and marketer of dairy products Stock Company 12/10/13 Tedi Icecek Sanayi ve Ticaret (50%) Turkey Tat Gida Sanayi $49.3 - - Producer of soft drinks 12/10/13 Tat Tohumculuk (51%) Turkey Kagome Co $24.6 - - Producer and seller of tomatoes and vegetable seeds 12/10/13 CraftBev International (Celis Beer Brands) United States Total Beverage Solution - - - Brewer of beer (Vino.com) 12/10/13 Subaru Shokuhin Japan Yoshikei Fukui Co - - - Food service contractor and manufacturer of packed food 12/09/13 Industrias Bachoco (10%) Mexico GBM Grupo Bursatil $1,588.8 0.51x 5.7x Producer and distributor of poultry Mexicano 12/09/13 Dymatize Enterprises United States Post Holdings $397.5 - - Manufacturer of nutritional and sports supplements 12/09/13 Golden Boy Foods Canada Post Holdings $300.8 - - Manufacturer of peanut butter and related food products Note: Includes change-of-control transactions globally (unless otherwise indicated), announced as of December 31, 2013 Sources: Dealogic and Capital IQ
Food For Thought Selected Monthly M&A Activity – December 3
William Blair
Food & Beverage Producer Transactions (cont.)
($ in millions)
Date Target (Unit Sold)/ Target Enterprise Enterprise Value/LTM Announced Target Business Description Nation Buyer Value Sales EBITDA 12/09/13 Capital Foods (44%) India Invus Group $67.8 - - Manufacturer of sauces and noodles
12/09/13 Alrifai Nutisal Sweden Cloetta $63.0 - - Producer of nuts
12/08/13 International Pediatric Nutrition (50%) Saudi Arabia Almarai Co $8.0 - - Producer of infant nutrition products
12/07/13 Wexford Creamery Ireland Glanbia Ingredients Ireland - - - Manufacturer of cheese, cream and milk
12/06/13 Sammontana (Bakery Production of Le Tre Marie) Italy Galbusera - - - Bakery products production business
12/06/13 NATORI (7%) Japan NATORI Co $124.7 0.36x 7.6x Manufacturer and distributor of food items, mainly snacks
12/06/13 Northern Beef Packers United States White Oak Global Advisors $44.3 - - Provider of meat processing services
12/05/13 Viñedos del Contino Spain CVNE Excellars $34.2 - - Producer and marketer of wine
12/05/13 CITIC Guoan Wine (Fukang Subsidiary) China Xinjiang Production & $17.9 0.69x - Grower of grapes for wine industry Construction Corp
12/04/13 Austral Fisheries Australia Maruha Nichiro Holdings $58.4 92.51x - Producer of seafood
12/04/13 Confiserie Lyron & Successeurs SARL - Negus France Menard - - - Manufacturer and seller of confectionery products
12/04/13 Global Gardens Group Canada Everfront Ventures Corp - - - Processer of vegetable based dairy substitute products
12/04/13 Les Crudettes France Laiterie Saint Denis de - - - Producer of pre-packaged salads and fruits l'Hotel - LSDH
12/03/13 Höglandsprodukter Sweden HKScan - - - Producer and processer of meat products
12/03/13 Henningsen Nederland Netherlands Ariake Europe $23.1 - - Manufacturer of dehydrated meat products
12/03/13 Cirio de Rica Italy Generale Conserve - - - Manufacturer of food products
12/02/13 CJ Beijing Bakery China CJ Foodville Corp. $6.6 0.47x - Producer of baked goods and processed food items
12/02/13 Joe & the Juice Denmark Valedo Partners - - - Manufacturer of juice
12/02/13 Zumos Palma Spain Toksoz Holding - - - Producer of juices and pulp
12/01/13 Yorukler Dis Ticaret Turkey Abraaj Capital - - - Manufacturer of cheese
Note: Includes change-of-control transactions globally (unless otherwise indicated), announced as of December 31, 2013 Sources: Dealogic and Capital IQ
Food For Thought 4 Selected Monthly M&A Activity – December
William Blair
Food & Convenience Retail Transactions
($ in millions)
Date Target (Unit Sold)/ Target Enterprise Enterprise Value/LTM Announced Target Business Description Nation Buyer Value Sales EBITDA 12/25/13 Tokyo Store Japan ALBIS Co. - - - Owner and operator of a chain of food supermarket stores
12/24/13 Yoneya Shoji Co Japan Yamazawa Co $11.8 - - Supermarkets operator
12/22/13 KVmartco United States Northgate Gonzalez - - - (2 Long Beach, CA supermarket stores) Owner and operator of a chain of grocery stores in Southern California
12/20/13 Arden Group United States TPG Capital $364.0 0.80x 9.9x Operator of supermarkets in Southern California
12/20/13 Fuzitoku Bussan (67%) Japan Mitsui & Co - - - Wholesaler of general line groceries
12/19/13 Tesco (22 Stores in Czech Republic) Czech Republic Hruska - - - Operator of a chain of grocery stores
12/17/13 Trent Hypermarket (50%) India Tesco $220.0 - - Operator of hypermarkets
12/17/13 Becker Milk Co Canada Firm Capital Corp $35.4 8.95x 15.6x Owner and operator of convenience stores
12/13/13 Eco's Co. Japan Takuma $174.9 0.17x 5.4x Operator and manager of a chain of supermarkets
12/10/13 Supermarkets (57 supermarkets) Spain Fragadis - - - Operator of supermarkets
12/05/13 San Roque Supermarkets Philippines Puregold Price Club - - - Owner and operator of supermarkets
12/03/13 Chubu-Syokuyo (80%) Japan Kokubu & Co; - - - Wholesaler of groceries for restaurants Tokan Co (Aichi)
12/02/13 Safeway (11 Dominick's stores) United States Roundy's $36.0 - - Operator of conventional supermarkets
12/02/13 Mie Nokyo Shokuhin Japan A-Coop Kinki Co - - - Operator of supermarkets
Note: Includes change-of-control transactions globally (unless otherwise indicated), announced as of December 31, 2013 Sources: Dealogic and Capital IQ
Food For Thought Selected Monthly M&A Activity – December 5
William Blair
Noteworthy M&A Activity – LTM
Food & Beverage Producer Transactions
($ in millions)
Date Target (Unit Sold)/ Target Enterprise Enterprise Value/LTM Announced Target Business Description Nation Buyer Value Sales EBITDA 12/19/13 Shanghai Jinsihou Food China Hershey Netherlands $584.0 - - Manufacturer and marketer of sweets and chocolates 12/09/13 Industrias Bachoco (10%) Mexico GBM Grupo Bursatil $1,588.8 0.51x 5.7x Producer and distributor of poultry Mexicano 11/21/13 TSB Sugar Holdings (22.3%) South Africa RCL Foods $393.8 - - Producers of sugar 11/14/13 Campofrio Food Group Spain Sigma Alimentos $1,583.9 0.61x 8.5x International producer of meat products 11/14/13 Roxas Holdings Philippines First Pacific $358.1 14.08x 64.8x Manufacturer of sugar 11/07/13 Grieg Seafood (26%) Norway Marine Harvest $642.0 1.80x 13.1x Provider of seafood 11/01/13 Bega Cheese (6%) Australia Fonterra Cooperative Group $795.3 0.83x 19.1x Manufacturer of dairy products 10/19/13 People’s Food China New Oceana $892.7 0.34x NMF Manufacturer and processor of meat products 10/11/13 Del Monte Foods Co. (Consumer Products Business) United States Del Monte Pacific $1,675.0 - - Manufacturer of canned foods 10/07/13 Warrnambool Cheese & Butter Australia Saputo $493.6 1.06x NMF Producer and seller of dairy products in Australia and internationally 10/01/13 Campbell Soup Company (European Simple Meals France CVC Capital Partners $540.4 - - Business) Several national brands of soups and simple meals throughout Europe and their accompanying manufacturing plants 09/27/13 Afgri South Africa AgriGroupe Holdings $504.2 0.59x 7.5x Operator in the agriculture business 09/16/13 Dakota Growers Pasta Company United States Post Holdings $370.0 - - Producer and seller of pasta products and egg noodles 09/12/13 Warrnambool Cheese & Butter Factory Australia Bega Cheese $367.3 0.80x 16.9x Manufacturer of dairy products 09/09/13 GlaxoSmithKline (Ribena & Lucozade Brands) Japan Suntory Holdings $2,110.4 2.64x - Manufacturer of soft drinks under Ribena and Lucozade brands 08/12/13 Unilever (Wish-Bone Salad Dressings Business) United States Pinnacle Foods $580.0 - - Producer of salad dressing 08/12/13 Campbell Soup Company (European Business) Belgium CVC Capital Partners $542.0 1.02x - Producer of food in Europe 08/08/13 Associated Brands Canada Treehouse Foods $180.6 0.94x - Manufacturer of dry packaged foods 08/05/13 Joe White Maltings Australia Cargill $301.8 1.26x - Supplier of malt and related products 08/09/13 YoCrunch United States Danone - - - Producer of yogurt 07/24/13 Vigor Alimentos Brazil FB Participações $985.9 1.55x 50.7x Producer of primarily milk, dairy, and spread products Note: Includes change-of-control transactions globally (unless otherwise indicated), announced as of December 31, 2013 Sources: Dealogic and Capital IQ
Food For Thought 6 Noteworthy M&A Activity – LTM
William Blair
Food & Beverage Producer Transactions (cont.)
($ in millions)
Date Target (Unit Sold)/ Target Enterprise Enterprise Value/LTM Announced Target Business Description Nation Buyer Value Sales EBITDA 07/23/13 Sichuan Chengdu Shuijingfang Group China Diageo $761.3 - - Producer of liquor 07/18/13 Tresmontes Lucchetti Chile Grupo Nutresa $731.3 - - Processor of food including pasta, flour, soups, and snacks 07/11/13 Hartwall Finland Royal Unibrew $602.4 - - Producer of beer and soft drinks 07/10/13 Companhia de Bebidas Ipiranga Brazil Embotelladora Andina $538.2 - - Manufacturer and distributor of Coca-Cola products 06/10/13 Robert’s American Gourmet United States B&G Foods $195.0 - - Maker of natural gourmet snack lines 05/23/13 Plum Organics United States Campbell Soup - - - Producer of frozen organic baby food products 05/15/13 Overhill Farms United States Bellisio Foods $86.9 0.44x 13.1x Producer of frozen foods 05/13/13 Happy Family United States Danone - - - Producer of baby and toddler meals 05/09/13 CTI Foods United States Thomas H Lee Partners / - - - Producer of meats Goldman Sachs Group 05/09/13 Hearthside Food Solutions (Organic and Natural United States Attune Foods (Post $158.0 - - Cereal, Granola and Snacks Business) Holdings) Manufacturer of cereal, granola, and snacks 04/05/13 Copeinca Norway Cermaq $779.5 2.54x 8.6x Producer of fish products and fishmeal 03/25/13 CSM (Bakery Supplies Business) United States Rhone Capital $1,050.0 0.40x - Producer of bakery supplies in North America and Europe 02/26/13 Copeinca Peru Pacific Andes International $743.9 2.35x 9.1x Manufacturer of fishmeal and fish oil 02/14/13 HJ Heinz United States Berkshire Hathaway / 3G $27,975.7 2.41x 16.7x Manufacturer of processed food products Capital 02/18/13 San Miguel Brewery Philippines San Miguel Corp. / Kirin $46.4 4.63x 14.9x Manufacturer of beer Holdings 01/28/13 Silverado Vineyards United States Laird Family Estate - - - Winery 01/11/13 Hostess Brands (Wonder, Nature’s Pride, Merita, Home United States Flowers Foods $360.0 - - Pride, Beefsteak, Butternut bread brands) Baker and marketer of cakes and sweet snacks Note: Includes change-of-control transactions globally (unless otherwise indicated), announced as of December 31, 2013 Sources: Dealogic and Capital IQ
Food For Thought Noteworthy M&A Activity – LTM 7
William Blair
Food & Convenience Retail Transactions
($ in millions)
Date Target (Unit Sold)/ Target Enterprise Enterprise Value/LTM Announced Target Business Description Nation Buyer Value Sales EBITDA 12/20/13 Arden Group United States TPG Capital $364.0 0.80x 9.9x Operator of supermarkets in Southern California 11/22/13 Wal-Mart Chile (25%) Chile Inversiones Australes Tres $7,515.1 1.30x 21.6x Operator of supermarkets in Chile (Wal-Mart Stores)
09/13/13 BI-LO Holding (7 BI-LO-Branded Stores in North and United States Publix Super Markets $59.0 - - South Carolina) Operator of a chain of grocery stores
09/12/13 Piggly Wiggly Carolina Company (22 Piggly Wiggly United States BI-LO Holding $35.0 - - Stores in South Carolina and Georgia) Operator of a chain of grocery stores
07/22/13 Nash Finch United States Spartan Stores $774.5 0.16x 6.9x Distributor of food products
07/09/13 Harris Teeter Supermarkets United States The Kroger Co. $2,447.8 0.53x 7.3x Operator of supermarkets
05/28/13 Supermarkets (Sweetbay, Harveys, and Reid’s) United States BI-LO Holding $265.0 0.16x - Operator of supermarkets
01/10/13 SUPERVALU (New Albertsons) United States Albertsons $3,300.0 0.19x - Operator of grocery stores
Note: Includes change-of-control transactions globally (unless otherwise indicated), announced as of December 31, 2013 Sources: Dealogic and Capital IQ
Food For Thought 8 Noteworthy M&A Activity – LTM
William Blair
Historical M&A Trends in the Food and Food Retailing Industries
Volume Trends
U.S. Monthly Announced M&A Activity
Food & Beverage Production Food Retail & Convenience Number of Deals 30 22 24 19 20 16 16 17 20 13 15 14 9 7 10 0 01/13 02/13 03/13 04/13 05/13 06/13 07/13 08/13 09/13 10/13 11/13 12/13 Food & Beverage Production 15 9 11 5 13 12 14 22 10 18 8 14 Food Retail & Convenience 4 0 2 224207 6 66
U.S. Yearly Announced M&A Activity
Food & Beverage Production Food Retail & Convenience Total Deal Value
Number Deal Value of Deals ($ in billions) 300 $120 232 223 170 181 185 189 200 159 166 159 $80 127 129 100 $40
0 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Food & Beverage Production 98 128 101 145 127 106 79 109 127 161 147 Food Retail & Convenience 61 53 65 87 96 64 48 20 32 24 42 Total Deal Value $7.9 $13.5 $11.5 $29.1 $33.3 $93.3 $20.5 $39.0 $13.9 $36.0 $43.2
Global Yearly Announced M&A Activity
Food & Beverage Production Food Retail & Convenience Total Deal Value
Number Deal Value of Deals ($ in billions) 1,500 1,325 1,311 $200 1,193 1,159 1,199 1,049 1,083 994 973 979 926 $150 1,000 $100 500 $50 0 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Food & Beverage Production 859 799 870 996 1104 1042 948 969 906 814 768 Food Retail & Convenience 135 174 179 197 221 269 211 230 177 165 158 Total Deal Value $41.7 $61.1 $97.8 $94.9 $132.3 $140.5 $72.0 $94.2 $125.4 $127.4 $109.7 Note: Data represents announced transactions including U.S.-based targets only Sources: Dealogic and Capital IQ as of December 31, 2013
Food For Thought Historical M&A Trends in the Food and Food Retailing Industries 9
William Blair
Participant Trends
Breakdown of Acquirers by Type
Percent of Deals 60%
50%
40%
30%
20%
10%
0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Private 43.0% 46.8% 44.1% 43.4% 51.9% 47.2% 50.0% 52.8% 49.5% 53.2% 56.0% 48.6% Public 25.6% 24.0% 27.7% 28.0% 19.6% 21.6% 20.3% 17.4% 18.1% 15.6% 19.5% 25.8% Private Equity 11.0% 11.0% 9.2% 10.1% 13.8% 17.2% 13.1% 13.0% 13.2% 12.2% 7.2% 13.6% Foreign 20.3% 18.2% 19.0% 18.5% 14.6% 14.0% 16.7% 16.8% 19.1% 19.0% 17.3% 12.0%
Breakdown of Sellers by Type
Percent of Deals
70%
60%
50%
40%
30%
20%
10%
0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Private 50.0% 30.1% 46.4% 53.1% 50.5% 57.2% 46.3% 53.0% 49.7% 47.1% 53.4% 55.2% Public 2.5% 3.3% 6.4% 5.6% 2.0% 1.7% 3.7% 5.1% 6.1% 4.8% 2.5% 4.9% Private Equity 4.2% 17.1% 7.9% 9.1% 12.4% 8.1% 8.0% 8.5% 14.0% 5.3% 8.1% 7.8% Divestiture 43.2% 49.6% 39.3% 32.2% 35.1% 32.9% 42.0% 33.3% 30.2% 42.8% 36.0% 32.1% Note: Data represents announced transactions including U.S.-based targets only Sources: Dealogic and Capital IQ as of December 31, 2013
Food For Thought 10 Historical M&A Trends in the Food and Food Retailing Industries
William Blair
Valuation Trends
Average EBITDA Multiples for Food Transactions(1)
Average EV/EBITDA Multiple Number of Disclosed Deals
EV/EBITDA Multiple
20.0x 40
35
15.0x 30 13.2x 13.0x 12.0x 11.4x 11.8x 25 9.1x 9.9x 10.4x 10.0x 9.3x 20 8.6x 8.4x 8.2x 15
5.0x 10
5
0.0x 0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average EV/EBITDA Multiple 8.6x 8.4x 9.1x 11.4x 9.9x 12.0x 10.4x 9.3x 8.2x 11.8x 13.2x 13.0x Number of Disclosed Deals 20 25 20 14 28 23 20 14 11 7 12 22
Average EBITDA Multiples for Beverage Transactions(2)
Average EV/EBITDA Multiple Number of Disclosed Deals
EV/EBITDA Multiple
20.0x 20 17.3x 14.1x 13.5x 14.5x 15.0x 15 13.4x 13.6x 11.8x 12.0x 11.7x 10.9x 9.5x 9.8x 10.0x 10
5.0x 5
0.0x 0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average EV/EBITDA Multiple 9.5x 11.8x 14.1x 12.0x 13.5x 13.4x 17.3x 11.7x 10.9x 9.8x 13.6x 14.5x Number of Disclosed Deals 15 9 16 12155491 3 64 (1) Excludes Food & Convenience retail transactions (2) Includes include alcoholic and nonalcoholic beverages Note: Data represents global transactions announced in the respective sectors Note: Transactions with multiples that are not meaningful are categorized as undisclosed Sources: Dealogic and William Blair as of December 31, 2013
Food For Thought Historical M&A Trends in the Food and Food Retailing Industries 11
William Blair
Public Company Trading Statistics
Food Production Companies
($ in millions) % Change Forward Enterprise Value/LTM Enterprise Company Market Cap MTD YTD P/E PEG Value Sales EBITDA Nestlé $233,920.6 0.2% 12.6% 18.3x 397.8% $259,145.1 2.60x 13.7x Unilever 116,725.7 1.7% 6.9% 18.8 188.3% 132,417.7 1.98 12.3 Mondelez International 61,908.7 5.3% 38.7% 20.6 191.3% 78,092.7 2.21 15.3 Danone 42,228.7 (1.0%) 9.5% 17.5 201.8% 53,143.3 1.91 11.5 Associated British Foods 31,984.8 7.8% 59.3% 23.6 243.0% 33,836.8 1.60 13.2 General Mills 31,170.6 (1.0%) 23.5% 16.6 211.6% 40,504.6 2.24 11.7 Kellogg Company 22,119.4 0.7% 9.3% 15.1 193.2% 29,325.4 1.97 13.2 The Hershey Company 21,740.2 0.4% 34.6% 23.6 277.5% 22,956.9 3.31 15.2 Grupo Bimbo 14,446.5 (1.2%) 19.1% 25.7 57.2% 17,298.6 1.30 13.0 ConAgra Foods 14,167.7 2.2% 14.2% 13.5 202.9% 23,730.1 1.37 11.0 Campbell Soup Company 13,633.8 11.7% 24.0% 16.9 281.4% 18,143.8 2.26 12.7 Hormel Foods Corporation 11,909.9 0.3% 44.7% 19.7 231.4% 11,731.5 1.34 12.8 Tyson Foods 11,496.3 5.6% 72.5% 12.0 140.6% 12,790.3 0.37 6.8 The J. M. Smucker Company 10,894.4 (0.6%) 20.2% 17.0 219.9% 12,967.3 2.23 10.7 JBS 10,648.0 3.2% 26.8% 12.3 NA 21,199.6 0.54 8.9 George Weston 9,330.1 (2.8%) 2.9% 16.4 164.3% 19,262.7 0.59 8.2 McCormick & Company 9,099.0 (0.1%) 8.5% 21.7 262.9% 10,333.4 2.52 15.1 Saputo 8,850.4 (0.4%) (9.8%) 16.3 163.2% 10,491.0 1.31 11.7 ARYZTA 6,768.5 2.8% 50.1% 13.5 45.8% 8,068.5 1.35 10.7 Flowers Foods 4,477.1 (1.2%) 38.4% 20.1 188.9% 5,393.0 1.47 13.4 The Hain Celestial Group 4,338.2 9.8% 67.4% 27.5 185.9% 4,925.7 2.66 20.1 Pilgrim's Pride Corporation 4,209.2 (0.8%) 124.4% 9.5 NA 4,793.8 0.56 7.1 The Hillshire Brands Company 4,113.5 0.1% 18.8% 18.9 472.1% 4,695.5 1.19 9.5 Treehouse Foods 2,509.7 (1.8%) 32.2% 19.1 179.5% 3,303.4 1.48 10.9 Lancaster Colony Corporation 2,405.1 1.7% 27.4% 21.2 192.5% 2,272.0 1.96 12.7 Tootsie Roll Industries 2,070.7 1.5% 29.3% NA NA 2,013.9 3.76 22.1 Snyder's-Lance 2,002.6 (0.5%) 18.8% 20.8 138.3% 2,534.4 1.46 13.7 B&G Foods 1,812.4 (2.1%) 19.8% 19.6 NA 2,664.6 3.88 15.0 Sanderson Farms 1,668.5 5.8% 52.1% 12.5 NA 1,623.2 0.60 6.1 J&J Snack Foods Corp. 1,654.7 3.1% 38.7% 23.7 263.0% 1,557.4 1.79 11.9 Dean Foods Company 1,622.8 (4.4%) (47.9%) 15.0 203.8% 2,293.8 0.20 3.6 Post Holdings 1,610.8 (2.7%) 43.9% 45.3 5.7 2,617.4 2.53 12.8 Fresh Del Monte Produce 1,588.1 1.0% 7.4% 13.7 274.3% 1,695.3 0.47 8.8 Cal-Maine Foods 1,452.0 9.6% 49.8% 15.8 NA 1,350.1 0.99 9.7 Boulder Brands 950.7 3.6% 22.9% 35.2 201.0% 1,195.6 2.66 18.2 Annie's 727.9 (6.3%) 28.7% 37.3 203.5% 716.8 3.84 29.7 Diamond Foods 580.8 4.4% 89.0% 40.1 364.2% 1,176.4 1.40 29.1 Chiquita Brands International 547.9 10.7% 41.8% 10.3 256.6% 1,098.3 0.36 8.9 Calavo Growers 470.1 (1.8%) 20.0% 18.3 159.1% 504.7 0.73 15.9 Seneca Foods Corp. 342.0 1.8% 4.9% NA NA 658.8 0.51 9.8 John B Sanfilippo & Son 269.9 (3.2%) 35.8% NA NA 339.9 0.46 6.2 Inventure Foods 257.5 3.7% 104.3% 25.6 187.2% 291.4 1.46 18.4 Bridgford Foods 87.6 0.2% 40.7% NA NA 81.2 0.62 14.2 Golden Enterprises 48.1 4.9% 19.5% NA NA 54.8 0.40 9.9 Mean 1.6% 31.7% 20.2x 226.8% $19,665.7 1.60x 12.8x Median 0.5% 27.1% 18.8 202.4% 4,744.7 1.46 12.5 Note: Data as of December 31, 2013 Sources: FactSet Research Systems, Bloomberg, and Capital IQ; data is sometimes based on reported results and includes estimates
Food For Thought 12 Public Company Trading Statistics
William Blair
Food Ingredients Companies
($ in millions) % Change Forward Enterprise Value/LTM Enterprise Company Market Cap MTD YTD P/E PEG Value Sales EBITDA Givaudan $13,145.7 1.1% 36.0% 19.7x 164.6% $14,431.6 3.14x 16.1x Kerry Group 12,220.6 8.3% 31.7% 18.3 161.7% 13,921.5 1.82 15.5 International Flavors & Fragrances 7,008.5 (2.7%) 29.2% 17.6 250.8% 7,601.4 2.61 12.5 Barry Callebaut 6,886.4 9.8% 30.6% 21.0 96.0% 8,516.9 1.62 18.2 Symrise 5,451.8 4.0% 29.0% 19.0 143.1% 6,091.5 2.48 12.7 Sensient Technologies 2,428.8 (1.3%) 36.4% 16.7 175.7% 2,759.7 1.87 11.0 Frutarom Industries 1,224.9 12.5% 68.9% 15.4 NA 1,330.8 2.12 12.3 T. Hasegawa 572.3 (2.0%) 5.8% 14.8 NA 345.3 0.75 4.2 Takasago International Corporation 558.7 (2.4%) 5.4% 13.8 NA 870.1 0.68 7.4 Mean 3.0% 30.3% 17.4x 165.3% $6,207.6 1.90x 12.21x Median 1.1% 30.6% 17.6 163.1% 6,091.5 1.87 12.5
Beverage Production Companies
($ in millions) % Change Forward Enterprise Value/LTM Enterprise Company Market Cap MTD YTD P/E PEG Value Sales EBITDA The Coca-Cola Company $182,421.8 2.8% 14.0% 18.6x 226.2% $198,458.8 4.20x 15.2x Anheuser-Busch InBev 170,686.4 4.0% 22.8% 19.3 154.0% 214,116.4 5.13 13.2 Pepsico 127,196.8 (1.8%) 21.2% 17.7 215.2% 147,174.8 2.22 12.1 Diageo 83,195.6 3.9% 14.1% 17.9 174.2% 97,906.5 5.63 16.7 SABMiller 82,032.1 (0.5%) 11.9% 19.4 152.5% 99,545.1 5.79 18.1 Brown-Forman Corporation 15,959.3 0.7% 19.5% 23.9 NA 16,771.3 5.73 16.9 Constellation Brands 13,316.1 (0.0%) 98.9% 18.3 137.0% 20,515.1 4.80 18.3 Coca-Cola Enterprises 11,458.0 5.2% 39.1% 15.5 173.1% 14,883.0 1.84 11.5 Monster Beverage Corporation 11,363.2 14.5% 28.3% 28.1 200.8% 10,760.6 4.94 18.6 Green Mountain Coffee Roasters 11,257.8 12.1% 82.7% 19.1 105.6% 11,265.7 2.59 11.3 Molson Coors Brewing Company 10,320.9 6.6% 31.2% 13.6 177.4% 13,833.9 3.29 17.0 Dr Pepper Snapple Group 9,775.3 1.0% 10.3% 14.9 202.2% 12,183.3 2.02 9.5 The WhiteWave Foods Company 3,978.4 7.9% 47.6% 25.7 147.0% 4,662.9 1.89 14.8 Boston Beer Co. 3,072.7 (1.2%) 79.8% 37.4 NA 3,029.6 4.41 22.2 National Beverage Corp. 934.0 (4.5%) 38.2% NA NA 942.4 1.44 11.9 Cott Corporation 758.3 (3.7%) 0.3% 14.7 NA 1,248.8 0.59 6.4 Coca-Cola Bottling Co. 677.0 7.8% 10.1% 19.5 NA 1,199.2 0.73 8.7 Farmer Brothers 365.6 14.0% 61.2% 23.0 115.0% 372.3 0.72 11.7 Lifeway Foods 261.2 5.7% 82.8% 34.5 215.6% 267.4 2.91 21.3 Jones Soda Co. 18.6 (9.4%) 60.0% NA NA 17.4 1.19 NMF Mean 3.3% 38.7% 21.2x 171.1% $43,457.7 3.10x 14.5x Median 3.4% 29.7% 19.2 173.6% 11,724.5 2.75 14.8 Note: Data as of December 31, 2013 Sources: FactSet Research Systems, Bloomberg, and Capital IQ; data is sometimes based on reported results and includes estimates
Food For Thought Public Company Trading Statistics 13
William Blair
Food Retail Companies
($ in millions) % Change Forward Enterprise Value/LTM Enterprise Company Market Cap MTD YTD P/E PEG Value Sales EBITDA Whole Foods Market $21,520.7 2.2% 26.9% 32.9x 183.3% $20,524.7 1.59x 16.6x The Kroger Co. 20,418.3 (5.3%) 51.9% 12.8 142.2% 28,353.3 0.29 6.3 Safeway 8,038.3 (6.9%) 80.0% 19.0 206.1% 13,151.3 0.30 6.1 Sprouts Farmers Market(1) 5,667.3 1.6% 110.2% 65.7 NA 6,047.6 2.62 30.6 United Natural Foods 3,740.1 9.5% 40.7% 28.3 185.2% 3,993.5 0.64 16.6 Harris Teeter Supermarkets 2,443.0 (0.1%) 28.0% 19.0 158.1% 2,497.8 0.53 7.1 The Fresh Market 1,959.6 (0.5%) (15.8%) 24.0 121.1% 2,004.6 1.38 12.2 SUPERVALU 1,891.6 13.0% 195.1% 11.4 NA 4,945.6 0.29 6.8 Weis Markets 1,413.8 3.0% 34.2% NA NA 1,311.8 0.49 7.4 Natural Grocers by Vitamin Cottage 952.7 15.4% 122.4% 64.2 242.2% 963.2 2.24 29.8 Spartan Stores 931.7 4.7% 58.1% 15.2 151.9% 1,068.2 0.40 10.0 Fairway Group Holdings Corp.(1) 751.7 (4.4%) 46.1% NMF NA 949.0 1.33 NMF Ingles Markets 616.8 3.2% 57.0% 10.9 96.9% 1,512.4 0.40 7.0 Roundy's 443.5 13.2% 121.6% 15.3% 57.7% 1,055.5 0.27 6.1 Village Super Market 429.6 (19.9%) (5.6%) NA NA 386.1 0.26 6.3 Arden Group (Gelson's) 388.5 (2.7%) 40.6% NA NA 364.0 0.80 9.9 Mean 1.6% 66.6% 25.3x 154.5% $5,570.5 0.86x 11.9x Median 1.9% 49.5% 19.0 155.0% 1,758.5 0.51 7.4
Convenience Store Companies
($ in millions) % Change Forward Enterprise Value/LTM Enterprise Company Market Cap MTD YTD P/E PEG Value Sales EBITDA Alimentation Couche-Tard $14,205.2 2.6% 53.2% 16.7x NA $16,638.4 0.44x 10.9x Casey's General Stores 2,703.2 (5.6%) 32.3% 18.5 166.7% 3,402.1 0.49 9.1 Susser Holdings 1,387.0 2.3% 89.9% 24.7 200.9% 1,932.9 0.32 11.2 The Pantry 394.9 16.6% 38.3% 25.2 229.1% 1,283.7 0.18 6.2 Mean 4.0% 53.4% 21.3x 198.9% $5,814.3 0.36x 9.4x Median 2.5% 45.8% 21.6 200.9% 2,667.5 0.38 10.0 (1) Company had an initial public offering in 2013 – performance over pricing Note: Data as of December 31, 2013 Sources: FactSet Research Systems, Bloomberg, and Capital IQ; data is sometimes based on reported results and includes estimates
Food For Thought 14 Public Company Trading Statistics
William Blair
Same-Store Growth – Food & Convenience Retail
Grocery Stores & Supermarkets
Natural Grocers by Vitamin Cottage 10.7% Sprouts Farmers Markets 10.2% Arden Group (Gelson's) 6.1% Whole Foods Market 5.9% Publix Super Markets 4.1%
Kroger(1) 3.5% SUPERVALU 3.4% The Fresh Market 3.1% Weis Markets 2.9% Harris Teeter Supermarkets 1.5% Ingles Markets 1.3%
Safeway(1) 1.2% Fairway Group Holdings 1.0% Spartan Stores 0.2% Village Super Market (0.3%) Roundy's (5.8%)
Convenience Stores Casey's General Stores 10.7% Alimentation Couche-Tard 4.5% Susser Holdings 2.2%
The Pantry 2.0% (1) Excludes fuel sales Note: Bolded companies reflect recently announced same-store sales data (announced in December 2013) Note: Data represents growth in the most recent reported fiscal quarter over the year-ago period Sources: Company filings and Capital IQ as of December 31, 2013
Food For Thought Same-Store Growth – Food & Convenience Retail 15
William Blair
U.S. Public Equity Financing Summary – LTM
IPOs
($ in millions)
Pricing & Performance - % Change At Filing At Pricing Offer/ Initial Shares/ Deal Shares/ Filing Offer ADS Exc. Filing Value at ADS Inc. Offer Deal Market Relative Date Date Ticker Issuer Ovl. Range Midpoint Ovl. Price Value Value to Range 1 Day 1 Month 3 Months Current
Sprouts Farmers $14.00 - 05/09/13 07/31/13 SFM 18.5 277.5 21.3 $18.00 $383.0 $2,585.9 Above 122.8% 105.3% 155.9% 113.5% Markets $16.00
$10.00 - 09/24/12 04/16/13 FWM Fairway Group Holdings 13.7 150.2 15.7 $13.00 $204.1 $536.1 Above 33.5% 50.1% 113.2% 39.7% $12.00
$18.00 - 12/19/12 03/27/13 PF Pinnacle Foods 29.0 551.0 33.4 $20.00 $667.0 $2,256.4 In Range 11.1% 18.0% 22.0% 37.3% $20.00
Mean 55.8% 57.8% 97.0% 63.5% Median 33.5% 50.1% 113.2% 39.7%
Follow-Ons
($ in millions)
Pricing Performance - % Change
% Shares Offered Last Trade Before Shares/ Pricing ADS Offered Offer Deal Value Filing/ Offer/ Offer/ Date Ticker Issuer Business Description (mm) Price (mm) Primary Secondary Offer Offer Current
Manufacturer and marketer of convenience 12/11/13 PF Pinnacle Foods 17.0 $26.75 $454.8 0% 100% (5.7%) (1.0%) 2.7% food products
Specialty retailer of natural and organic 11/25/13 SFM Sprouts Farmers Market 17.0 $37.00 $629.0 0% 100% (23.0%) (2.3%) 3.9% food
11/12/13 BNNY Annie's Producer of natural and organic foods 2.5 $47.95 $119.9 0% 100% (3.0%) (1.7%) (10.2%)
09/20/13 CHEF The Chefs' Warehouse Distributer of specialty food products 4.5 $21.00 $108.7 84% 16% (7.1%) (2.6%) 38.9%
09/12/13 HAIN The Hain Celestial Group Producer of specialty foods 3.6 $78.25 $280.9 0% 100% 33.9% (1.5%) 16.0%
09/03/13 HAIN The Hain Celestial Group Producer of specialty foods 3.7 $79.50 $290.2 0% 100% (2.8%) (2.9%) 14.2%
Producer of consumer packaged food and 07/17/13 WWAV WhiteWave Foods 34.4 $17.75 $610.6 0% 100% 3.1% (1.9%) 29.2% beverages
03/13/13 BNNY Annie's Producer of natural and organic foods 3.5 $40.00 $140.0 0% 100% (4.7%) (3.2%) 7.6%
Manufacturer and marketer of packaged 01/07/13 CAG ConAgra Foods 9.2 $29.75 $275.0 100% 0% (1.6%) (1.6%) 13.3% food products
Mean (1.2%) (2.1%) 12.8% Median (3.0%) (1.9%) 13.3% Sources: Dealogic and FactSet Research Systems Note: LTM as of December 31, 2013
Food For Thought 16 U.S. Public Equity Financing Summary – LTM
William Blair
Selected Upcoming Industry Events
Date Event Location
January 2014 Jan 12–14 FMI’s Midwinter Executive Conference Scottsdale, AZ Jan 12–15 NW Food Manufacturing & Packaging Exposition Portland, OR Jan 15–16 Marca by BolognaFiere Bologna, Italy Jan 19–21 Winter Fancy Food Show San Francisco, CA Jan 26–28 Retail Industry Leaders Association – The Leadership Forum Naples, FL Jan 28–30 Convenience Retailing University Glendale, AZ Jan 28–30 International Production & Processing Expo Atlanta, GA Jan 31–Feb 5 NAFDMA Convention Kansas City, MO
February 2014 February 9-12 N.G.A. 2014 Annual Convention and Supermarket Synergy Showcase Las Vegas, NV February 16-18 AMI Foundation Annual Meat Conference Atlanta, GA February 17-19 Snack, Beverage & Grocery EPPS Denver, CO February 22-25 IFA’s Annual International Franchise Convention New Orleans, LA February 22-26 AFFI Frozen Food Convention San Diego, CA February 23-26 RILA Supply Chain Conference San Diego, CA
March 2014 March 2-5 NCA State of the Industry Conference Miami, FL March 3-5 FMI Annual Business Conference Dallas, TX March 6-9 Natural Products Expo West Anaheim, CA March 9-12 FMI Asset Protection Conference Jacksonville, FL March 16-18 Seafood Expo North America & Seafood Processing North America Boston, MA March 16-19 American Bakers Association Annual Convention Scottsdale, AZ March 23-27 AFFI Annual Food and Beverage Environmental Conference Napa, CA March 30-Apr 2 Restaurant Leadership Conference Scottsdale, AZ
April 2014 April 1–3 NACS State of the Industry Summit Chicago, IL April 6–9 Grocery Manufacturers Association Science Forum Washington, D.C. April 6–9 RILA Asset Protection Conference Indianapolis, IN April 29–May 1 NGA Day in Washington (NGA, FMI and FIAE) Washington, D.C.
May 2014 May 4-6 FMI’s 2013 Financial Executive Conference and Internal Auditing Conference (Co-Located) San Francisco, CA NRA Restaurant Hotel Motel Show May 17-20 Chicago, IL * Includes International Wine Spirit & Beer Event May 20-21 PLMA’s Annual “World of Private-Label” Amsterdam May 20-22 NCA Sweets & Snacks Expo Chicago, IL TBD CSP Leadership and Crisis Prevention Forum Charlotte, NC TBD The Tech Event (NACS and PCATS) Dallas, TX
Food For Thought Selected Upcoming Industry Events 17
William Blair
Date Event Location
June 2014 June 1-3 AFFI Food Logistics Forum Incline Village, NV June 1-3 International Dairy Deli Bakery Association Annual Convention "Dairy-Deli-Bake" Denver, CO June 1-5 NGA Leadership Development Program (Cornell) Ithaca, NY June 1-6 Insight NACS Future of Convenience London, UK Paris, FR June 8-12 NGA Leadership Development Program (USC) Los Angeles, CA June 10-13 FMI Chicago, IL June 10-13 United Fresh 2014 Chicago, IL June 16-18 Foodservice at Retail Expo 2014 Dallas/Fort Worth, TX June 22-23 Southwest Foodservice Expo Houston, TX June 29-Jul 1 NASFT – Summer International Fancy Food & Confection Show New York, NY June 29-Jul 1 Georgia Association of Convenience Stores Annual Convention/Tabletop Show Amelia Island, FL
July 2014 July 22-25 NBJ Summit Dana Point, CA July 28-30 Center Store Grocery, Snack & Beverage Planning Miami, FL July 27-29 The International Foods Planning Miami, FL
August 2014
August 23-26 NACDS Total Store Expo Boston, MA
September 2014 September 14-17 Candy Annual Planning San Diego, CA September 16-17 Food Evolution Summit Litchfield Park, AZ September 17-19 NCA Washington Forum Washington, D.C. September 17-20 Natural Products Expo East Baltimore, MD September 18-20 All Things Organic - BioFach America Baltimore, MD September 29-30 Canadian Federation of Independent Grocers-Grocery Innovations Toronto September 29-Oct 2 RILA Retail Sustainability Conference Minneapolis, MN
October 2014 October 5-7 MUFSO Conference Dallas, TX October 7-10 NACS Show Las Vegas, NV October 12-14 Consumer Goods Forum: Future Leaders Congress Istanbul, Turkey October 11-14 National Frozen and Refrigerated Foods Convention Orlando, FL October 17-19 Fresh Summit International Convention & ExpositionAnaheim, CA October 21-23 Shopper Marketing Expo Minneapolis, MN October 29-30 National Chicken Council - Annual Conference Washington, D.C.
November 2014 November 11-12 Kosherfest Secaucus, NJ November 16-18 PLMA's Private Label Trade Show Rosemont, IL November 16-19 Outlook Leadership 2013 (CSP) Scottsdale, AZ
December 2014 December 4-7 SOHO Expo Orlando, FL
Food For Thought 18 Selected Upcoming Industry Events
William Blair
General Market Update
Percentage Change
As of 12/31/13 Month-to-Date Year-to-Date Equity Market Indices Dow Jones Industrial Average $16,576.66 3.0% 26.5% Nasdaq Composite 4,176.6 2.9% 38.3% S&P 500 1,848.4 2.4% 29.6% S&P Food Products Index 449.6 2.7% 30.5% S&P Food & Staples Retail Index 317.8 (0.6%) 29.9% S&P Restaurants Index 805.1 (1.3%) 25.9%
WB Corporate Finance Indices(1) Food Index $702.63 (0.2%) 16.8% Ingredients Index 767.2 2.1% 28.5% Beverage Index 3,867.0 2.2% 19.5% Food Retail Index 803.1 (1.2%) 41.3% Convenience Store Index 14,823.7 1.6% 61.2%
Currencies Dollar to Canadian Dollar $1.06 0.4% 6.7% Dollar to Euro 0.7 (1.2%) (4.3%) Dollar to Peso 13.1 (0.1%) 0.9% Dollar to Pound 0.6 (1.1%) (1.9%)
Commodities* Coffee Beans (Cents and 1/100 of a Cent Up to 2 Decimal Places) $1.11 (0.1%) (23.0%) Corn (Cents Per Bushel) 4.2 (0.6%) (39.6%) Milk (Cents Per 2,000 lbs.) 0.2 4.7% 4.0% Cocoa (Dollars Per Metric Ton) 2,709.0 (2.8%) 21.2% Oil (Dollars Per Barrel) 98.4 6.1% 7.2% Soybean Oil (Cents Per Bushel) 0.4 (3.3%) (21.3%) World Sugar (Cents and 1/100 of a Cent up to 2 Decimal Places) 0.2 (4.3%) (15.9%) Wheat (Cents Per Bushel) 6.1 (9.5%) (22.2%)
Yield (%) 52-Week Range
As of 52-Week 52-Week 12/31/13 Low Latest High INTEREST RATES 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 10-Year Treasury 3.0% 1.6% 3.0% 30-Year Treasury 3.9% 2.8% 3.9% 3-Month LIBOR 0.2% 0.2% 0.3% Fed Funds Effective Rate 0.1% 0.1% 0.2% Prime Rate 3.3% 3.3% 3.3% Note: WB Corporate Finance indices are determined by FactSet Research Systems, as of December 31, 2013. Data is based on a weighted average by market capitalization calculation. *Commodities represent futures prices Source: FactSet Research Systems as of December 31, 2013 WB Corporate Finance Food Index includes: Annie’s, ARYZTA, Associated British Foods, B&G Foods, Bridgford Foods, Calavo Growers, Cal-Maine Foods, Campbell Soup, Chiquita Brands International, ConAgra Foods, Danone, Dean Foods, Diamond Foods, Dole Food Company, Flowers Foods, Fresh Del Monte Produce, General Mills, George Weston Limited, Golden Enterprises, Grupo Bimbo, Hillshire Brands Company, Hormel Foods, Inventure Foods, J&J Snack Foods, JBS, John B Sanfilippo & Son, Kellogg Company, Kraft Foods, Lancaster Colony Corporation, McCormick & Co., Nestlé, Overhill Farms, Pilgrim’s Corp., Post Holdings, Sanderson Farms, Saputo, Seneca Foods, Nestlé, Ralcorp Holdings, Reddy Ice Holdings, Sanderson Farms, Saputo, Sara Lee, Seneca Foods, Smart Balance, Smithfield Foods, Snyder’s-Lance, The Hain Celestial Group, The Hershey Company, The J. M. Smucker Company, Tootsie Roll Industries, Treehouse Foods, Tyson Foods, Unilever WB Corporate Finance Beverage Index includes: Anheuser-Busch InBev, Boston Beer Co., Brown-Forman Corporation, Coca-Cola Bottling Co. Consolidated, Coca-Cola Enterprises, Constellation Brands, Cott Corporation, Diageo, Dr Pepper Snapple Group, Farmer Brothers Co., Green Mountain Coffee Roasters, Jones Soda Co., Lifeway Foods, Molson Coors Brewing Company, Monster Beverage Corporation, National Beverage, Pepsico, SABMiller, The Coca-Cola Company WB Corporate Finance Ingredients Index includes: Barry Callebaut, Frutarom Industries, Givaudan, International Flavors & Fragrances, Kerry Group, Sensient Technologies Corporation, Symrise, T. Hasegawa Co., Takasago International WB Corporate Finance Food Retail Index includes: Arden Group (Gelson’s), Fairway Group Holdings, Harris Teeter Supermarkets, Ingles Markets, Nash Finch, Roundy’s, Safeway, Spartan Stores, SUPERVALU, The Fresh Market, The Kroger Co., United Natural Foods, Village Super Market, Vitamin Cottage Natural Food Markets, Weis Markets, Whole Foods Market WB Corporate Finance Convenience Store Index includes: Alimentation Couche-Tard, Casey’s General Stores, Pantry, Susser Holdings Corporation
Food For Thought General Market Update 19
Quarterly Market Update – All Industries
William Blair
Domestic M&A Market Summary
U.S. Activity Trends
M&A Activity
Undisclosed Middle Market >$750M Deal Value
Number of Deals Deal Value ($ in billions) 14,634 18,000 12,420 13,340 11,488 12,749 13,397 12,089 $1,800 8,947 8,792 9,934 10,087 9,375 12,000 $1,200 6,000 $600 0 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Number of Deals >$750M 127 147 233 281 362 460 228 156 287 262 312 312 Middle Market 4,012 4,239 4,527 4,453 4,548 4,537 4,766 4,144 6,224 5,360 5,155 4,203 Undisclosed 4,808 4,406 5,174 5,353 7,510 8,343 6,494 5,075 6,238 7,775 9,167 7,574 Deal Value $564 $688 $992 $1,297 $1,647 $1,750 $1,075 $886 $1,048 $1,174 $1,104 $1,294
Middle-Market M&A Activity
<$50M $50-250M $250 -750M Deal Value Deal Value Number of Deals ($ in millions) 4,548 4,537 10,000 4,766 6,224 $600 4,527 4,453 5,360 5,155 4,203 4,012 4,239 4,144 $400 5,000 $200 0 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Number of Deals $250M-$750M 286 314 402 424 536 627 417 269 457 475 467 512 $50M-$250M 886 1,065 1,218 1,265 1,294 1,333 1,195 791 1,138 1,148 1,151 1,095 <$50M 2,840 2,860 2,907 2,764 2,718 2,577 3,154 3,084 4,629 3,737 3,537 2,596 Deal Value $256 $292 $351 $364 $421 $466 $355 $239 $370 $383 $380 $387
Private-Equity Activity
Undisclosed Middle Market >$750M Deal Value
Number of Deals Deal Value 2,316 ($ in billions) $4,000 2,247 1,821 $800 2,091 1,646 1,812 1,976 2,035 1,749 1,159 1,200 1,462 $2,000 $400
$0 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Number of Deals >$750M 24 33 61 84 106 149 64 34 94 88 95 88 Middle Market 538 626 906 859 998 826 788 742 869 698 660 507 Undisclosed 597 541 679 869 1,143 1,341 969 686 1,013 1,249 1,336 1,154 Deal Value $87.1 $120.4 $224.6 $287.6 $523.7 $644.3 $243.7 $149.3 $272.3 $268.6 $264.5 $282.6 Note: Year-to-date as of December 31, 2013 Sources: Dealogic and William Blair’s mergers-and-acquisitions market analysis. Data represents announced deals only
Food For Thought Domestic M&A Market Summary 20
William Blair
U.S. Valuation Trends
Median EV/EBITDA Multiples
Middle Market Overall Market
15.0x 12.0x 9.0x 6.0x 3.0x 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Middle Market 8.3x 7.7x 9.2x 10.5x 11.0x 10.0x 9.0x 6.5x 10.3x 10.8x 9.8x 12.1x
Overall Market 8.5x 8.5x 10.0x 11.1x 11.9x 12.3x 10.2x 7.9x 10.3x 12.3x 10.1x 12.1x
Median EV/EBITDA Middle-Market Multiples
< $50M $50M-$250M $250M-$750M 16.0x
12.0x
8.0x
4.0x
0.0x 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 < $50M 4.8x 7.5x 8.3x 8.5x 10.9x 8.1x 5.0x 4.2x 8.9x 10.9x 7.4x 9.4x $50M-$250M 8.6x 7.0x 9.2x 11.5x 10.2x 10.5x 10.3x 7.2x 10.2x 10.7x 9.8x 12.1x $250M-$750M 10.3x 9.3x 10.4x 10.6x 11.9x 10.0x 12.2x 8.2x 11.2x 10.9x 10.6x 15.2x
Average Acquisition Premiums
1-Week Premium 4-Week Premium
50%
40%
30%
20% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1-Week Premium 36% 32% 28% 26% 26% 27% 36% 38% 34% 36% 36% 23% 4-Week Premium 38% 36% 31% 30% 30% 29% 38% 40% 37% 38% 39% 29% Notes: Data limited to a range of 1 to 100 and LTM is as of December 31, 2013 Sources: Dealogic and William Blair’s mergers-and-acquisitions market analysis. Data represents announced deals only
Food For Thought 21 Domestic M&A Market Summary
William Blair
U.S. Equity Capital Markets Summary
Historical IPO Issuance
200 175 139 150 105 95 100 54 50 48 56 35 39 50 26 28 25 13 19 20 21 21 0 2008 2009 2010 2011 2012 2013 1Q 11 2Q 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13
Historical Follow-On Issuance
700 657 564 600 506 470 500 394 400
300 204 173 192 200 135 128 130 127 152 140 86 98 115 100 50 0 2008 2009 2010 2011 2012 2013 1Q 11 2Q 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12Q1 13Q2 13Q3 13Q4 13
Note: Excludes follow-on offerings for CLEFs, REITs, and SPACs
IPO Pricings by Sector – Last 4 Quarters: Follow-on Pricings by Sector – Last 4 Quarters:
140 Total Deals 592 Total Deals
12 62 Technology Healthcare 23 44 54 169 Healthcare Technology 51 Financial Industrial 21 Consumer Consumer Industrial 126 Financial 22 53 195 Business Services Business Services
Sources: Dealogic and William Blair’s mergers-and-acquisitions market analysis
Food For Thought Domestic M&A Market Summary 22
William Blair
Debt Capital Markets Summary
Average Equity Contribution
Less than $50 million EBITDA More than $50 million EBITDA 50% 47% 46% 46% 45% 41% 41% 41% 40% 40% 40% 38% 38% 37% 40% 36% 37% 35% 37% 34% 33% 31% 32% 32% 32% 30% 29% 30% 30%
20%
10%
0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Quarterly LBO Debt Multiples – Less Than $50 Million EBITDA
7.0x 7.0x
6.0x 6.0x 4.8x 4.9x 5.0x 4.2x 5.0x 5.0x 4.2x 4.4x 4.4x 4.0x 3.4x 5.0x 3.9x 3.8x 3.7x 4.8x 4.0x 3.6x 4.5x 3.4x 4.0x 4.0x 3.8x 3.8x 3.9x 3.0x 3.7x 3.0x 3.3x 3.2x 3.1x 3.1x 3.0x 2.2x 2.0x 2.0x 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Quarterly LBO Debt Multiples – Greater Than $50 Million EBITDA
6.8x 7.0x 7.0x
6.6x 6.0x 5.3x 6.0x 5.1x 4.8x 4.9x 5.7x 5.3x 4.8x 5.0x 4.5x 5.0x 4.3x 5.0x 4.1x 4.4x 4.0x 4.9x 4.0x 4.4x 4.0x 3.1x 3.9x 4.0x 2.6x 3.0x 3.5x 3.0x 3.1x 2.9x 2.9x 2.6x 2.0x 2.0x 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sources: Dealogic and Standard & Poor’s as of December 31, 2013
Food For Thought 23 Domestic M&A Market Summary
William Blair
William Blair Food & Beverage and Food Convenience & Retail Investment Banking
Food & Beverage Production Jim Bertram is the global head of the firm’s consumer and retail investment banking group. Before joining William Blair in 2006, he was the co-head of Banc of America Securities’ global consumer products investment banking practice. In this role, he assisted domestic and international consumer products manufacturers and distributors in executing mergers and acquisitions and raising debt and equity capital through both public and private market transactions. Before joining Banc of America Securities, he was responsible for leading Deutsche Bank Alex. Brown’s food-and-beverage investment banking activity. Before working at Deutsche Bank Alex. Brown, he was vice president in the corporate finance department at George K. Baum & Company, an investment and merchant banking firm where he advised clients in executing public equity offerings, mergers and acquisitions, and private debt placements. Mr. Bertram began his career in investment banking at Salomon Brothers. Mr. Bertram graduated with highest honors from the University of Illinois with a B.S. in finance. [email protected] +1 312 364 5426 Brent Smith is a managing director in the consumer and retail group. Since joining William Blair in 2000, Mr. Smith has also been a member of the firm’s mergers-and-acquisitions practice and currently heads William Blair’s consumer M&A effort. Over this period, he has worked on a range of public and private M&A, primarily in the consumer and industrial sectors, totaling more than $18 billion in aggregate transaction value. Mr. Smith’s financial advisory experience includes sell-side and buy-side transactions, corporate divestitures, take-private transactions, strategic options studies, valuations, fairness opinions, and special committee situations. Mr. Smith is a member of William Blair’s Fairness Opinion Committee. Before joining William Blair, Mr. Smith worked at both Lehman Brothers and Heitman Financial. Mr. Smith holds an M.B.A. with honors from the University of Chicago and a B.B.A. with high distinction from the University of Michigan. [email protected] +1 312 364 5392 Adam Filkin joined William Blair in 2007 and is a managing director in the consumer and retail investment banking group. Mr. Filkin has extensive transaction experience across numerous consumer verticals, including food, consumer products, and personal care. He joined William Blair from Banc of America Securities, the investment banking arm of Bank of America. Mr. Filkin spent three years at Banc of America, serving as an associate in the consumer and retail practice. Before joining Banc of America, Mr. Filkin was a manager at A.T. Kearney, focusing on growth strategies and operational improvement studies for consumer and retail companies. He has more than 10 years of experience working with consumer and retail companies. Mr. Filkin holds an M.B.A with a concentration in finance from the University of Chicago and holds a B.S.E. in chemical engineering from the University of Michigan. [email protected] +1 312 364 8077
Food For Thought William Blair Food & Beverage and Food Convenience & Retail Investment Banking 24
William Blair
Food & Convenience Retail Tim Carroll joined William Blair in 2002 and serves as a managing director in the consumer and retail investment banking group. He joined William Blair from Andersen Corporate Finance LLC, the investment banking arm of Andersen. Mr. Carroll spent four years at Andersen, serving as a national director and managing director/co-head of the products and business services industry team. Before joining Andersen, he was a founder and principal of Wyndam Capital, a broker-dealer serving middle-market companies, and a founder and principal of a $120 million private-equity fund. Mr. Carroll has served on the board of directors for seven privately held businesses and has more than 27 years of investment banking experience, 7 years of commercial banking experience, and 2 years of commercial real estate experience. Mr. Carroll graduated with a B.S. in business finance from Indiana University. [email protected] +1 312 364 8532 Michael Siska is a managing director in the consumer and retail investment banking group at William Blair. He originally joined the firm in 2002 and then rejoined in 2006 after attaining his M.B.A. at the University of Chicago. Before joining William Blair, Mr. Siska worked in private equity for Allstate Private Equity in Chicago and 3i Group in London. He spent five years in the products and business services industry group at Andersen Corporate Finance LLC, the investment banking arm of Andersen. He focuses on specialty retail, food retail, restaurants, and consumer services. Mr. Siska earned an M.B.A. from the University of Chicago and a B.S., with honors, from the University of Illinois at Urbana-Champaign. [email protected] +1 312 364 5393
Europe Alex Matthes is a managing director at William Blair. Before he joined William Blair in 2013, Mr. Matthes worked in Commerzbank’s M&A advisory team with a focus on consumer and retail. Before joining Dresdner Kleinwort in 2006 as vice president, he worked in the M&A department of Lazard as analyst and associate since 2000. Mr. Matthes studied business administration at the universities of Frankfurt and Cologne and obtained a master’s degree in business administration (Diplom Kaufmann) in 2000. [email protected] +49 69 509527 612 Beth Pickens is a director and head of European consumer banking. She joined William Blair in 2000 and has been located in William Blair’s London office since 2001. Ms. Pickens specializes in advising international consumer growth companies across consumer products, personal care, and consumer services. She is also an angel investor in early-stage consumer companies, including Bonobos.com and DefySupply.com. Ms. Pickens holds a master’s degree in business administration from the University of Chicago Graduate School of Business and a bachelor’s degree in finance from the University of Illinois at Urbana-Champaign. She also completed studies at the Université de Paris IV-Sorbonne. A Chicago native, she lives in London with her husband and children. [email protected] +44 20 7868 4479
Food For Thought 25 William Blair Food & Beverage and Food Convenience & Retail Investment Banking
William Blair
Recent William Blair Consumer & Retail Transactions
Not Disclosed $51,500,000 $290,950,000 $230,000,000 $59,000,000
has divested Mervin has divested certain assets has been recapitalized by Manufacturing Inc. to in Charlotte to Altamont Capital TZP Group Initial Public Offering Initial Public Offering Publix Super Markets Partners December 2013 November 2013 November 2013 November 2013 October 2013
$120,750,000 $45,755,000 $705,000,000 $147,857,145 $560,000,000
Initial Public Offering Credit Tenant Lease Follow-on Offering Initial Public Offering Follow-on Offering
October 2013 October 2013 September 2013 August 2013 July 2013
€122,000,000 $498,749,250 $246,047,100
a portfolio company of Gilde Equity Management has been acquired by Follow-on Offering Follow-on Offering Gilde Buy Out Partners June 2013 May 2013 March 2013
$140,000,000 $40,000,000 $90,000,000
has been acquired by §363 sale to Authentic Brands Group Follow-on Offering AmRest Holdings SE and W Diamond Group Corporation March 2013 December 2012 December 2012
$240,033,072 Not Disclosed $142,535,568 $162,255,167 Not Disclosed
has acquired has been acquired by
Follow-on Offering Initial Public Offering Follow-on Offering Roark Capital Group
November 2012 November 2012 November 2012 October 2012 September 2012
Not Disclosed $143,261,558
Credit Facility Follow-on Offering Refinancing August 2012 August 2012
$550,000,000 $676,200,000 $88,000,000 $142,600,000
has been acquired by
Senior Credit Facilities Follow-on Offering Gildan Activewear Inc. Initial Public Offering
June 2012 May 2012 May 2012 May 2012
Food For Thought Recent William Blair Consumer & Retail Transactions 26
William Blair
William Blair Consumer & Retail Coverage
Mark Miller, CFA, Partner +1 312 364 8498 Sharon Zackfia, CFA, Partner +1 312 364 5386 Broad Assortment and Hardlines, Apparel and Accessories, Leisure, Restaurants E-commerce, Health, Beauty, and Convenience Company Ticker Company Ticker Amazon.com AMZN BJ’s Restaurants BJRI Blue Nile NILE Bloomin’ Brands BLMN Cabela’s CAB CarMax KMX Costco Wholesale Corporation COST Carnival Corporation CCL CVS Caremark Corporation CVS The Cheesecake Factory CAKE Dick’s Sporting Goods DKS Chipotle Mexican Grill CMG Fairway Group Holdings FWM Dunkin’ Brands Group DNKN The Fresh Market TFM Harley-Davidson HOG GNC Holdings GNC Life Time Fitness LTM Mattress Firm Holding MFRM lululemon athletica LULU MercadoLibre MELI Panera Bread PNRA Natural Grocers by Vitamin Cottage NGVC Potbelly PBPB Target Corporation TGT Royal Caribbean Cruises RCL Tractor Supply Company TSCO Sonic Corp. SONC Vitamin Shoppe VSI Starbucks Corporation SBUX Walgreen Co. WAG Tilly’s TLYS Wal-Mart Stores WMT Tumi Holdings TUMI Whole Foods Market WFM Under Armour UA Zulily ZU Urban Outfitters URBN Zumiez ZUMZ
Jon Andersen, CFA, Partner +1 312 364 8697 Daniel Hofkin, Analyst +1 312 364 8965 Consumer Products Hardlines, Specialty Retail Annie’s BNNY Bed Bath & Beyond BBBY AptarGroup ATR Luxottica Group LUX Boulder Brands BDBD O’Reilly Automotive ORLY Church & Dwight CHD PetSmart PETM Colgate-Palmolive Company CL Regis Corporation RGS Fox Factory Holding FOXF Restoration Hardware RH Green Mountain Coffee Roasters GMCR Ross Stores ROST J&J Snack Foods JJSF Steiner Leisure STNR J.M. Smucker Company (The) SJM TJX Companies (The) TJX Jarden Corporation JAH Ulta Salon, Cosmetics & Fragrance ULTA Kellogg Company K Williams-Sonoma WSM Mead Johnson Nutrition Company MJN Perrigo Company PRGO Prestige Brands Holdings PBH Procter & Gamble Company (The) PG Scotts Miracle-Gro Company (The) SMG SodaStream International SODA Tempur-Pedic International TPX TreeHouse Foods THS
Amy Noblin, Analyst +1 415 248 2874 Apparel and Accessories Abercrombie & Fitch ANF Nordstrom JWN Coach COH Tiffany & Co. TIF DSW DSW Tumi Holdings TUMI Francesca’s Holdings FRAN Vera Bradley VRA Michael Kors Holdings KORS
Food For Thought 27 William Blair Consumer & Retail Coverage
William Blair
Notes
Food For Thought Notes 28
William Blair
Disclosures
William Blair is a trade name for William Blair & Company, L.L.C. and William Blair International, Limited. William Blair & Company, L.L.C., is a Delaware company and is regulated by the Securities and Exchange Commission, The Financial Industry Regulatory Authority, and other principal exchanges. William Blair International Limited is authorised and regulated by the Financial Services Authority ("FSA") in the United Kingdom. William Blair & Company® only offers products and services where it is permitted to do so. Some of these products and services are only offered to persons or institutions situated within the United States and are not offered to persons or institutions outside of the United States. This material has been approved for distribution in the United Kingdom by William Blair International Limited, and is directed only at, professional clients and eligible counterparties (as defined in COBS 3.5 and 3.6 of the FSA Handbook). This advertisement is not intended to be investment advice. William Blair & Company | 222 West Adams Street | Chicago, Illinois 60606 | +1 312 236 1600 | williamblair.com January 30, 2014 Food For Thought 29 Disclosures
International
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Headquarters The Broadgate Tower Chicago William Blair International, Limited
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Specialty Finance Industry Insights A review of M&A activity and public market valuation in the consumer and commercial specialty finance sectors
William Blair’s investment banking group combines significant transaction experience, rich industry knowledge, and deep relationships to deliver successful advisory and financing solutions to our global base of corporate clients. We serve both publicly traded and privately held companies, executing mergers and acquisitions, growth financing, special situations and restructuring, and general advisory projects. This comprehensive suite of services allows us to be a long-term partner to our clients as they grow and evolve. In 2012, the investment banking group completed 76 merger-and-acquisition About William Blair transactions worth more than $13.8 billion in value, involving parties in 21 countries and Investment Banking five continents, and was an underwriter on over 20% of all U.S. initial public offerings.
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