Pet Industry Overview Spring 2019 v 13.1 Disclaimer

This report was produced for the benefit of all parties interested and involved in the pet industry but its contents are for informational purposes only. The opinions expressed reflect our analysis as of March 29, 2019, unless noted otherwise, and is subject to change. While the information is from sources we consider reliable, we make no warranty of its accuracy. I offer this report to anyone free of charge. However, its contents are property the of Cascadia Capital, LLC except where third party data has been cited, and should not be reproduced without my expressed written permission. I appreciate your adherence to this policy.

Bryan Jaffe Managing Director Cascadia Capital, LLC [email protected] Executive Summary

 As industry participants position themselves to succeed in a consumer centric paradigm, new complexities have emerged with long term implications ▪ Latency between consumer trends and pet trends has compressed from years to months, which will put immense pressure on the industry’s regulatory framework ̶ Consumer demand for pet products that incorporate CBD, human diet concepts such as Keto and Paleo, and protein alternatives is significant but lacks regulatory and, in some cases, legal clarity ̶ That has not stopped manufacturers or retailers from bringing these products to market in order to satisfy demand ̶ If AAFCO cannot evolve to become more nimble and responsive, the industry will become more risky to all involved ▪ As Petco forges ahead with its new wellness enabled vision, PetSmart has largely stood still lacking financial flexibility ̶ The success of Petco’s strategy could put pressure on PetSmart to sell or IPO Chewy, it’s most valuable liquid asset ̶ Tepid results for Petco, could place these two organizations on a merger path in order to remain relevant

 Slower industry growth is driving consolidation, a theme that will continue for the foreseeable future ▪ The cost of doing business in the pet industry has increased as physical and online retailers monetize their market positions, making it more difficult for midsized and emerging brands to compete ▪ Given the pace of change, strategics are under more pressure to acquire assets that enable them to meet emerging customer needs, or risk losing out on the ability to monetize faster growing market opportunities ▪ Private equity is leading the consolidation charge due to broader business malaise prevalent among large strategics, which will enhance focus on profitability as the key criteria underlying acquisitions and put downward pressure on valuations

 Notwithstanding slower growth and more turbulent competitive dynamics, we believe the current environment offers a market opportunity that may not manifest itself again for some time ▪ The continued transition of Blue Buffalo to mass, including Wal Mart, and the Champion transition to major pet specialty will open unprecedented shelf space in the independent channel for emerging and channel dedicated family brands in the consumables category ▪ Retail consolidation will allow strong independent concepts the ability to enhance reach and accelerate growth, organically and through acquisition ▪ The forthcoming tension among the human and pet food supply chains will offer ingredient companies significant M&A and capital formation opportunities ▪ Company’s across the industry that can offer acquirers a defensible moat – as defined through brand, operational capabilities, and intellectual property – will grant a subset of players category leading valuations in financial and M&A transactions

2 S E C T I O N I

Market Growth Assessment

3 Industry Growth Analysis

 According to data provided by the APPA, the pet industry grew 4.4% in 2018, exceeding estimates by 0.7% ▪ Food category growth accelerated to 4.3%, exceeding estimates by 1.6% – Growth acceleration is attributed to increased availability of specialized diets, Millennial willingness to pay, and manufactures taking price, as evidenced by faster growth among APPA figures versus PCE measurements o Millennials are spending almost 44% more a month than Baby Boomers on their dogs – Food category benefitted from 0.7% inflation in 2018, reversing a three year deflationary trend ▪ Veterinary category growth decelerated to 6.1% in 2018, missing estimates by 0.8% – Veterinary Care benefitted from inflation of 2.5% in 2018 – Declining growth rate reflects falling prices and increased utilization of preventative care among new pet owners  Pet related PCE grew at 4.3% in 2018, the slowest observed growth rate since the recession ▪ Product-related PCE grew at 4.2% in 2018, an acceleration from 3.5% in 2017 ▪ Veterinary Care-related PCE grew at 4.4% in 2017, a deceleration from 9.7% in 2017  APPA industry growth for 2019 is forecasted at 3.9%, representing a deceleration versus 2018 actual growth ▪ Food category growth is anticipated to slightly accelerate to 4.5% in 2019 ▪ Veterinary Care category growth anticipated decelerate to 4.8% in 2019

$ billions Actual Category 2011 2012 2013 2014 2015 2016 2017 2018 2019E Food 19.85 20.64 21.57 22.26 23.05 28.23 29.07 30.32 31.68 % growth 5.8% 4.0% 4.5% 3.2% 3.5% 22.5% 2.9% 4.3% 4.5% Supplies/OTC Med 11.77 12.65 13.14 13.75 14.28 14.71 15.11 16.01 16.44 % growth 7.6% 7.5% 3.9% 4.6% 3.9% 3.0% 2.7% 6.0% 2.7% Veterinary Care 13.41 13.67 14.37 15.04 15.42 15.95 17.07 18.11 18.98 % growth 3.1% 1.9% 5.1% 4.7% 2.5% 3.4% 7.0% 6.1% 4.8% Live Animal Purchases 2.14 2.21 2.23 2.35 2.32 2.10 2.10 2.01 1.97 Billions $ % growth 0.5% 3.3% 0.9% 5.4% (1.3%) (9.5%) 0.0% (4.3%) (2.0%) Other Services 3.79 4.16 4.41 4.84 5.41 5.76 6.16 6.11 6.31 % growth 8.0% 9.8% 6.0% 9.8% 11.8% 6.5% 6.9% (0.8%) 3.3% Total 50.96 53.33 55.72 58.24 60.48 66.75 69.51 72.13 75.38 % growth 5.4% 4.7% 4.5% 4.5% 3.8% 10.4% 4.1% 4.4% 3.9%

Note: 2016 reflects methodology changes for APPA calculations that when normalized result in ~ 4% total industry growth 4 Source: APPA, St. Louis Fed, TD Ameritrade, U.S. Labor Bureau Analysis of Industry Growth Drivers

U.S. UNEMPLOYMENT RATE PET ADOPTION RATES

Unemployment volatility ticked up in 2018 Feline adoptions grew 2.3% while canine adoptions declined 2.0% in 2018 Unemployment Rate Change 12.0% 0.6% Canine Adoptions YoY Change Feline Adoptions YoY Change 10.0% 0.4% 13% 8.0% 0.2% 8% 6.0% 0.0% 4.0% -0.2% 3% 2.0% -0.4%

0.0% -0.6% -3%

Jul-11 Jul-16

Jan-14 Jan-19

Jun-14

Oct-12 Oct-17

Apr-15

Sep-10 Feb-11 Sep-15 Feb-16

Dec-11 Dec-16

Aug-13 Aug-18

Nov-14

Mar-13 Mar-18

May-17 May-12

Jul-04 Jul-07 Jul-10 Jul-13 Jul-16

Jan-03 Jan-06 Jan-09 Jan-12 Jan-15 Jan-18

Oct-09 Oct-03 Oct-06 Oct-12 Oct-15 Oct-18

Apr-08 Apr-11 Apr-14 Apr-17 Apr-05 -8%

PET RELATED PERSONAL CONSUMPTION REAL WAGE GROWTH EXPENDITURES ($B)

Real wages effectively decline in 2018 Pet related PCE growth continued to decelerate

1.5% $140,000 Product Service

1.0% $120,000 $100,000 0.5% $80,000 0.0% $60,000 -0.5% $40,000 -1.0% $20,000

-1.5% $-

Jul-13 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18

Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 5 Sources: Pethealth, Inc., U.S. Bureau of Economic Analysis, U.S. Labor Bureau Public Company Performance

 Industry revenue and earnings, as measured by public company performance, was favorable in 2018(1)(2)(3) ▪ Earnings for publicly traded pet companies in our index grew 36.6% in 2018, benefitting from weaker comps posted in the 2H2017 – Health care equities drove the majority of earnings growth in 2018 led by Zoetis, IDEXX, Virbac and Neogen – Other favorable performers include Oil-Dri and PetMed Express ▪ Revenue for publicly traded pet companies grew 9.4% in 2018, driven again by health care spend – Revenue growth excluding Zoetis, which accounts for between 40% - 45% of our comp group revenue in any quarter, was 9.2%  Notably, emerging growth stocks Freshpet, PetIQ and Trupanion posted at least one positive earnings quarter in 2018, with PetIQ and Trupanion narrowing losses across the full calendar year while Freshpet was essentially flat

PET INDUSTRY REVENUES PET INDUSTRY NORMALIZED EPS

$2,500 (in $ millions) 16% $6.00 140%

14% 120% $2,000 $5.00 100% 12% 80% $4.00 $1,500 10% 60% 8% 40% $3.00 20% $1,000 6% 0% 4% $2.00 $500 -20% 2% $1.00 -40% $0 0% -60% $0.00 -80%

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

Q2 2015 Q2 Q2 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4

Q1 2013 Q1 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018

CQ3 2016 CQ3 2016 CQ4

Revenue Adjusted Adjusted YoY Change Adjusted EPS Adjusted YoY Change

(1) Data set includes Central Garden & Pet Company, Freshpet, Inc., IDEXX Laboratories, Inc., Neogen Corp., Oil-Dri Corp of America, PetMed Express, Inc., Pets At Home Group, PLC, PetIQ, Inc., Trupanion, Inc., Virbac SA and Zoetis, Inc. (2) Companies that did not report two positive EPS quarter for each of the past four quarters are excluded from any EPS based calculations which has a meaningful impact of volatility calculations and results in changes to year-over-year comparisons Source: CapitalIQ (3) Publicly available data 6 Deal Flow Analysis

BROADER M&A ACTIVITY

B2C M&A and PE deal volumes have fallen, driven by market and political uncertainty

B2C M&A Deal Volume and Values B2C PE Deal Volume and Values Debt/Equity Invested in PE Deals 1,575 11.7x 11.5x 11.5x $300 1,600 $60 219 250 12.0x 10.8x 1,328 1,331 211 1,269 201 9.8x 1,400 192 190 192 191 191 $250 $50 185 180 184 182 10.0x 1,119 1,137 1,105 1,126 200 1,200 964 5.7x 5.7x $200 924 $40 5.7x 1,000 8.0x 5.4x 783 150 4.3x 113 $150 800 $30 572 6.0x 600 100 $100 $20 4.0x 400 50 6.0x $50 $10 5.4x 5.4x 5.7x 5.8x

200 2.0x

$256 $256 $174 $174 $221 $188 $157 $152 $200 $136 $135 $235 $151 $200

$39 $39 $19 $28 $21 $16 $31 $39 $21 $26 $33 $48 $23 $17 $0 0 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 0.0x 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2015 2016 2017 2018 Q1 2019

Deal Value ($B) Deal Volume Capital Invested ($B) Deal Volume Debt/EBITDA Equity/EBITDA EV/EBITDA

PET SECTOR DEAL VOLUME

Industry consolidation continued within the pet sector in 2018

7 Source: CapitalIQ, Pitchbook S E C T I O N I I

Industry Trends

8 Key Industry Trends

 Blue Buffalo Banks Further on FDM. General Mills announced that they intend to double Blue Buffalo’s retail availability by April 2019. Central to this strategy will be launching Wilderness in FDM. When Blue transitioned Life Protection Formula in August 2017, it communicated its intention to protect the pet specialty channel by preserving exclusive access to its others brands. The quest for growth and profits rendered that commitment fleeting. By the end of April, according to General Mills earnings presentation Blue will have a retail ACV of 65%, up from 32% in October 2018. Retail sales declines in pet specialty necessitated the move according to General Mills executive leadership. Notably, Blue also posted 24% ecommerce growth for the nine months ending February 2019. If there is anything left in the relationship between Blue and pet specialty we will soon find out.

 Amazon Accelerates but Housebrands Not a Category Killer. According to Packaged Facts, Amazon generated pet category sales of $3.3 billion in 2018, giving it a 6% share of the market. Amazon pet food sales exceeded $1 billion in 2018, up over 20%. However, Amazon’s own housebrand Wag, launched in mid-2018, only accounted for $2 million of these sales. While Amazon housebrand sales will invariably increase over time and benefit from the launch of complementary brands, such as Solimo, owning the buy box is not yet translating into changing consumer behavior. Most Wag and Solimo product ratings are 3.5 to 4 stars, evidence of mix sentiment, and the launch has been plagued by production issues. A study by Marketplace Pulse suggested that Amazon housebrands across categories were having limited impact on brand sales online. With estimates for online penetration of pet food sales reaching as high as 50% over time, Amazon stands to benefit anyway you look at it.

 Petco Launches Repositioning Strategy. Petco is ushering in a comprehensive new strategy firmly rooted in the health and wellness driver of industry growth. Petco’s approach involves eliminating products whose formulations feature artificial ingredients. As part of this process, Petco will seek to transition customers in many leading national brands to its housebrands and other channel dedicated brands. Criticism has ensued as Petco’s housebrand formulations may not fully comply with their own standards and many brands they are removing appear to be for financial or competitive reasons. Additionally, Petco launched its PetCoach store which “offers the highest quality suite of personalized pet services, products and experiences – all designed through a veterinary lens – to address total pet health and wellness.” While its competitor runs in place, we applaud Petco for its efforts to reframe its appeal and relevancy to pet owners. However, if traffic and transactions don’t materialize, Petco may lack the flexibility for a further pivot. Get your magic 8-ball ready.

 Follow the Funds to See the Industry's Future. 2018 was a record year for industry consolidation, but it also outperformed in terms of private placements, as equity flowed into the category at record levels. Over $1 billion of equity capital was invested in pet related enterprises since 2017 (see Slide 15). Notably, the year was punctuated by larger deals, with the median deal size of $45 million among transactions whose proceeds yielded more than $5 million. Investments in dog-walking apps accounted for 40% of deal value, but 23% went into ingredient manufacturing companies, with an additional 7% flowing to direct-to-consumer dog food brands. Institutional equity is flocking to these opportunities because they are not well served by existing market participants. The deals of today will fuel the exits three to five years down the road, which will only serve to extend the consolidation cycle. However, the subsectors attracting capital speak to a much broader market opportunity within the industry.

9 Source: Amazon.com, General Mills, Marketplace Pulse, Packaged Facts, Pet Products News, Pitchbook Publicly Traded Pet Company Performance

 Equity valuations of core publicly traded pet companies in our index PET INDUSTRY STOCKS CONTINUED TO outperformed the S&P 500 by 21% in 2018 OUTPERFORM THE S&P 500 IN 2018 ▪ Our pet index has outperformed the broader market index 40.0% (S&P 500) by 110% over five years S&P 500 Pet Index  2018 was a mixed bag for pet equities with half the index posting 30.0% negative returns, consistent with the 7.0% decline of in the S&P 500 during the calendar year 20.0% ▪ Freshpet (61%), Zoetis (19%), and IDEXX (18%) posted the strongest gains among the equity group 10.0%

 Revenue growth was the most rewarded aspect of public company 0.0% performance with top equity gainers all posting favorable topline growth in addition to earnings growth -10.0% ▪ Companies who posted favorable earnings through cost containment or flat earnings all had equity value price -20.0% compression 01-18 02-18 03-18 04-18 05-18 06-18 07-18 08-18 09-18 10-18 11-18 12-18  Revenue growth accelerated to 9.4% and benefitted from 125 bps of inflation, including 70 bps of food inflation, resulting in 36.6% earnings INDUSTRY EARNINGS REBOUNDED growth, against a weak comp AGAINST A WEAK 2H2017 COMP  Key notes from emerging growth pet equities: $6.00 150% ▪ Freshpet (61%) delivered strong revenue growth, but higher customer acquisition costs constrained earnings $5.00 100% $4.00 ▪ Trupanion (-12%) experienced topline growth of 25% and 50% slightly narrowed losses, but regulatory concerns and pressure $3.00 0% from short sellers constrained the stock $2.00 ▪ PetIQ (6%) experienced strong topline growth due to the $1.00 -50% annualization of its VIP Petcare acquisition, but margin dilution due to mix constrained the stock $0.00 -100% Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018

Adjusted EPS Adjusted YoY Change

Source: CapitalIQ, TompsonOne Source: CapitalIQ 10 Nestle and J.M. Smucker Analysis

NESTLE VS. S&P 500 J.M. SMUCKER VS. S&P 500

10.0% Nestlé S.A. S&P 500 10.0% S&P 500 The J. M. Smucker Company 5.0% 5.0% 0.0% 0.0% -5.0% -10.0% -5.0% -15.0%

-10.0% -20.0% -25.0% -15.0% -30.0% 01-18 02-18 03-18 04-18 05-18 06-18 07-18 08-18 09-18 10-18 11-18 12-18 01-18 02-18 03-18 04-18 05-18 06-18 07-18 08-18 09-18 10-18 11-18 12-18

 Nestle’s PetCare division posted 3.3% revenue growth in 2018, with  The J.M. Smucker Company completed a strategic review process for its growth accelerating in 2H2018, after posting revenue gains of 2.9% in Pet Food & Snacks business in late 2018, on the back of its acquisition of 1H2018 Ainsworth in May 2018 ▪ Organic growth for the division was reported at 4.5%, second ▪ #1 in dog treats, #2 in cat food, #2 in premium dog food among Nestle divisions ▪ 24% growth for the twelve months ended January 31, 2019, ▪ Posted 21.6% operating profit margin posting 17.6% operating profit margins, a 3.4% erosion over ▪ Acquired businesses and emerging markets producing double the past twelve months digit growth ▪ In February management lowered 2019 sales estimates for ▪ Experiencing strong growth in feline with Felix brand now Ainsworth by $50 million (6.3%), but did not attribute the generating $1 billion in sales anticipated slower growth rate to Blue Buffalo expansion at FDM or Wal Mart specifically  Nestle’s broader business reached an inflection point in 2018, with revenue acceleration after six years of sequential declines  Company believes it has significant growth opportunities in category and is forecasting 30% net sales growth, though the acquisition clouds ▪ Nestle ecommerce sales growing at 18% the comp  PetCare will focus on personalization as a key growth driver going ▪ Believe there is white space for Nutrish – distribution forward, and the business will make investments in order to gain more expansion, velocity enhancements, category expansion direct access to the end customer ▪ Continued growth of Nature’s Recipe, which produced 33% net  Division will also invest heavily in product innovation to differentiate sales growth in 2018 from its competitive set, reduce time to market, and capture emerging ▪ customer segments Dog treat innovation to add $100 million incremental sales 11 Source: The J.M. Smucker Company, Nestle SA Key Pet Industry Transactions

Hyper-Pet, LLC, a portfolio company of Guardian Capital Partners acquired R2P Group Inc. and OurPet’s Company. Terms of the R2P Group transaction were undisclosed. OurPet’s was acquired for approximately $23 million in a take private. The pet supplies category is rapidly consolidating driven by private equity backed platforms. Scale advantages in competing across retail Products Acquired by channels and the need to align existing platforms with sectors of growth are driving elevated market activity. In combination, Hyper-Pet now occupies the number three position in the category and is better aligned with more rapidly growing retail channels. The addition of R2P provides Hyper-Pet a broader retail and product portfolio position and enhanced capabilities in category management, housebrands, and private label.

Symrise AG, a publicly traded manufacturer of flavors, fragrances, and ingredients, acquired International Dehydrated Foods / American Dehydrated Foods, a supplier of poultry based ingredients to the human and companion animal markets for $900 million. As human grade protein available to support the pet food supply chain comes under demand stress, ingredient suppliers who can Acquired by provide replacement solutions stand to benefit. ADF is a leading supplier of shelf stable chicken meat, fat and concentrated chicken broth that can enhance protein content, palatability, and lower a brands bill of materials. In combination with Symrise’s existing product portfolio, the company now offers a broad range of solutions to leading brands. At 4.1x Revenue and 17.8x EBITDA, Symrise is making a big bet on the future of pet food ingredients

A consortium led by Astanor Ventures invested $125 million in Ÿnsect, a French startup that breeds insects to become ingredients for pet food, fish food, and plant fertilizers. Terms of the transaction were undisclosed. Long term, insect protein is expected to be a major source of protein content in the pet food supply chain. The challenge is U.S. pet food Consumable Investment in regulatory bodies move at a snails pace with respect to defining and approving pet food ingredients. As companies such as Ÿnsect bring products out of the lab and into the market, brands and retailers are unlikely to wait for the regulatory paradigm to catch-up. Nestle is already testing a cricket based formulation as part of its RootLab concept launch. Many independent companies have also brought cricket based consumables products to market. Through this funding, Ÿnsect has positioned itself as the independent pace setter in the ingredient segment of the supply chain.

Abor Investments, a leading private equity firm to the food sector, acquired the private label pet food and treat manufacturing business of Mars Petcare U.S., Inc. The re-branded Red Collar Pet Food business then acquired Hampshire Pet Products, a manufacturer of baked and cold formed pet consumables. Terms of the transactions were undisclosed.

Acquired by As the cost of brand acquisitions escalates to unsustainable levels, private equity is seeking to play sector opportunities through manufacturing. This provides an opportunity to benefit from segment growth without paying brand M&A valuations. While private label pet food has experienced market share erosion, Red Collar is well positioned to benefit from opportunities created in the grocery and mass channels as retailers seek to upside from increased retail traffic created by major brands jumping into the channel. The acquisition of Hampshire positions Red Collar to provide its existing customers a broader product offering and expanded capabilities. 12

Source: CapitalIQ, Pitchbook, RootLab Pet Food Analysis of Acquisition Multiples

 Our pet industry M&A comps database contains 100 PET M&A TRANSACTIONS – transactions which have occurred since January 2010 with MEAN EBITDA AND REVENUE MULTIPLES disclosed or proprietary estimated transaction multiples across five categories – Animal Health, Consumables, Retail, Hardgoods, and Veterinary 25.0x ▪ Retail and Veterinary also include distribution assets specific to those channels 3.2x ▪ A majority of pet industry M&A transactions continue 20.0x to occur without transparency into the revenue or profit multiples paid 1.8x  Animal Health multiples experienced expansion driven by 15.0x larger deals that took place at premium valuations 1.8x ▪ There were five Animal Health deals in 2018 with 2.0x enterprise values of $850 million or more, that 10.0x 19.8x 1.6x traded at a mean of 20.0x EBITDA 15.5x  Multiples among Consumables expanded a full point, driven 11.6x by Blue Buffalo and Ainsworth acquisition prices 5.0x 10.2x 8.6x  Products acquisitions experienced slight multiple compression due to the size of the businesses acquired and the preponderance of deals that took place with financial 0.0x buyers Animal Health Consumables Product Retail Veterinary  Retail and Veterinary multiples were unchanged due to a Mean EBITDA Multiple Mean Revenue Multiple lack of additional observations

Note: (1) List is limited to transactions with estimated or observed multiples Source: Capital IQ, Cascadia Capital 13 D2C Pet Food Funding Analysis

DIRECT - TO-CONSUMER PET FOOD BRAND  Companies in the direct-to-consumer pet food category raised in excess of EQUITY FINANCING RAISED TO DATE ($M) $100 million since 2018 ▪ The Farmer’s Dog represents ~50% of the capital raised, based on it’s $49.1 recent $39 million financing  Category arrived due to the perceived need for fresh pet food delivery ▪ Capitalizing on the make-at-home and food delivery trends that permeate the broader food category ̶ According to Packaged Facts, Human meal kit market was $3.1 billion of sales in 2018 $17.0 ▪ Taps into consumer emotion and supply chain concerns associated $13.0 with mass market pet food $11.1 ̶ As a generation, Millennials are more concerned about $6.1 supply chain transparency  Long term potential of the category is favorable ▪ Benefits from the malaise in pet specialty retail ̶ Nearly 20% of pet owners get some form and percentage of pet nutrition delivered today ▪ Category scaling more rapidly than housebrands owned by leading ecommerce players  While initial market receptivity appears favorable, scaling concerns remains ▪ Initial customer acquisition is universally subsidized and the businesses are unseasoned making life-time-value uncertain ̶ Average cost to feed 55 lb. dog per day is $8.50 3 2 2 1 2 ▪ Production capacity in multiple physical locations that enables more Financing Financing Financing Financing Financing Rounds Rounds Rounds Rounds Rounds cost effective delivery is difficult from an execution perspective ̶ Production uses USDA facilities and human grade ingredients Dog Dog Dog/Cat Dog Dog ̶ Generally involves equipment investment Food Food Food Food Food ▪ Due to delivery distance and form factor industry produces more Treats Treats Treats packaging waste Supplements

Note: (1) JustFoodForDogs 2018 round investors were undisclosed; L Catterton investment amount undisclosed 14 Source: Capital IQ, Company Websites, Packaged Facts Private Placement Volume

 Private placement velocity and volume has been driven by direct-to-consumer, digital, and ingredient opportunities

($ in millions) Date Total Announced Funding Source Target Name New Money Mar-19 RRE Ventures, Freestyle Capital, Lerer Hippeau Ventures Barking Labs Corp. $7.0 Mar-19 DCM, Digitalis Mollybox $13.0 Feb-19 ToroVerde Sera Labs $5.0 Feb-19 Consortium of investors SAS Ynsect $125.0 Jan-19 PeakSpan Capital Locai, Inc. (d/b/a PetDesk) $12.0 Jan-19 Insight Venture Partners The Farmer's Dog, Inc. $39.0 Nov-18 Temasek Holding Private Ltd. InnovaFeed SAA $45.5 Oct-18 Undisclosed Investors JustFoodForDogs Holdings $8.5 Aug-18 KeyBanc Capital Markets PetIQ, Inc. $75.0 Jun-18 Undisclosed Investors MedVet Medical & Cancer Centers for Pets $8.5 Jun-18 Bain Capital Ventures Strategic Pharmaceutical Solutions, Inc., (d/b/a VetSource) $50.0 Jun-18 Main Post Partners Nulo, Inc. $28.4 Jun-18 Undisclosed Investors Agri-Protein Technologies (Pty) Ltd $105.0 May-18 Consortium of investors NomNomNow, Inc. $10.0 May-18 T. Rowe Price Associates A Place For Rover, Inc. $155.0 Mar-18 Miura Private Equity TiendAnimal S.L. $78.8 Mar-18 Consortium of investors Mad Paws Pty Ltd. $5.0 Feb-18 Freshly, Inc, Literacy Capital, White Star Capital Dogmates, Ltd. $7.0 Feb-18 Consortium of investors InnovaFeed SAA $18.4 Jan-18 SoftBank Group Wag Labs, Inc. $300.0 Jan-18 Consortium of investors True Leaf Medicine International Ltd. $8.1 Nov-17 Riverhead Capital Investment Management Co. Ltd. Ruipeng Pet Healthcare Group Co. Ltd. $37.0 Oct-17 Almaz Capital, Y Combinator Petcube, Inc. $10.0 Oct-17 McLarty Partners Destination Pet, LLC $30.0 Sep-17 Canaan Partners Ollie Pet, Inc. $12.6 Sep-17 Sweet Capital Ltd. Dog Buddy UK Ltd. $6.0 Jul-17 IDG Capital Chongqing Epet Technology Co., Ltd. (d/b/a epet.com) $53.0 Jul-17 Clayton, Dubilier & Rice, Hillhouse Capital Group Direct Vet Marketing, Inc. $223.0 Jul-17 Spark Capital A Place For Rover, Inc. $65.0 May-17 Consortium of investors Alphapet Ventures GmbH $11.2 May-17 Consortium of investors PawTree, LLC $7.0 May-17 Shasta Ventures, Forerunner Ventures, Collaborative Fund The Farmer's Dog, Inc. $8.1 May-17 Village Capital Integrated Animal Health, LLC $5.0 May-17 Consortium of investors Calysta, Inc. $40.0 Apr-17 Battery Ventures Wag Labs, Inc. $40.0 Apr-17 CAVU Venures Nulo, Inc. $5.5 Mar-17 Piper PE LLP; Piper V Pet Food UK Ltd $6.1 Mar-17 Riverbridge Partners Freshpet, Inc. $24.6 ______Max $300.0 Median $21.5 Mean $47.8 Min $5.0 Source: Capital IQ, Pitchbook, Cascadia Capital 15 Analysis of Public Company Trading Multiples

 Graphs below show median Total Enterprise Value to LTM EBITDA multiples for publicly traded pet companies by segment  Entities included in each comparable company set can be viewed on the slides that follow

ANIMAL PRODUCT & RETAIL MEDIAN TEV/EBITDA LTM BY MONTH

12.4x 12.3x 12.6x 12.4x 12.4x 11.9x 11.9x 11.7x 11.6x 12.0x 10.9x 11.0x

Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19

VETERINARY & ANIMAL HEALTH MEDIAN TEV/EBITDA LTM BY MONTH

20.5x 19.2x 20.1x 18.2x 17.8x 18.3x 18.0x 18.4x 18.7x 18.5x 18.1x 18.5x

Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19

Source: CapitalIQ 16 Public Comps

($ in millions, except per share data) Price Market Enterprise LTM Revenue Growth LTM Margins P/E EV / Revenue EV / EBITDA Company 03/29/19 Cap Value Revenue EBITDA 1 Year 3 Years Gross EBITDA Multiple LTM NTM LTM NTM

Pet Products Central Garden & Pet Company $25.56 $1,378 $1,592 $2,235 $201 7.6% 9.5% 30.1% 9.0% 19.1x 0.7x 0.7x 7.9x 7.1x Freshpet, Inc. 42.29 1,507 1,500 193 10 26.8% 18.5% 46.6% 4.9% NM 7.8x 6.3x 157.4x 52.6x Oil-Dri Corporation of America 31.14 236 232 266 23 0.2% 0.3% 24.3% 8.5% 37.5x 0.9x 0.0x 10.2x 0.0x Mean 11.5% 9.4% 33.7% 7.5% 28.3x 3.1x 2.3x 58.5x 19.9x Median 7.6% 9.5% 30.1% 8.5% 28.3x 0.9x 0.7x 10.2x 7.1x

Pet Retail Tractor Supply Company $97.76 $11,840 $12,191 $7,911 $879 9.0% 8.3% 34.2% 11.1% 28.3x 1.5x 1.5x 13.9x 13.5x Pets at Home Group Plc 2.07 1,033 1,202 1,211 110 8.1% 7.3% 47.7% 9.1% 24.8x 1.0x 0.9x 10.9x 7.0x zooplus AG 111.05 793 783 1,509 6 16.0% 22.1% 25.3% 0.4% NM 0.5x 0.4x 130.6x 37.8x Mean 11.0% 12.6% 35.7% 6.9% 26.5x 1.0x 1.0x 51.8x 19.5x Median 9.0% 8.3% 34.2% 9.1% 26.5x 1.0x 0.9x 13.9x 13.5x

Veterinary Medecine PetIQ, Inc. $31.41 $690 $800 $529 $23 98.2% 37.0% 15.8% 4.3% NM 1.5x 1.3x 35.0x 15.3x PetMed Express, Inc. 22.78 467 373 286 55 6.2% 7.7% 34.8% 19.1% 13.6x 1.3x 1.2x 6.8x 6.3x Mean 52.2% 22.3% 25.3% 11.7% 13.6x 1.4x 1.3x 20.9x 10.8x Median 52.2% 22.3% 25.3% 11.7% 13.6x 1.4x 1.3x 20.9x 10.8x

Source: CapitalIQ 17 Public Comps

($ in millions, except per share data) Price Market Enterprise LTM Revenue Growth LTM Margins P/E EV / Revenue EV / EBITDA Company 03/29/19 Cap Value Revenue EBITDA 1 Year 3 Years Gross EBITDA Multiple LTM NTM LTM NTM

Animal Health Bayer Aktiengesellschaft $64.59 $60,234 $101,270 $44,429 $8,452 13.1% (4.9%) 61.2% 19.0% 26.3x 2.3x 2.0x 12.0x 7.7x Eli Lilly and Company 129.76 125,973 131,745 24,556 7,872 7.4% 7.2% 73.8% 32.1% 34.5x 5.4x 5.3x 16.7x 16.5x Heska Corporation 85.12 659 652 127 15 (1.5%) 6.8% 44.4% 12.1% 99.2x 5.1x 4.7x 42.4x 126.1x IDEXX Laboratories, Inc. 223.60 19,240 20,116 2,213 577 12.4% 11.4% 56.1% 26.1% 68.8x 9.1x 8.4x 34.9x 31.1x Neogen Corporation 57.39 2,991 2,744 417 87 7.3% 10.4% 46.5% 20.8% 66.2x 6.6x 6.4x 31.7x 30.9x Pfizer Inc. 42.47 235,785 259,348 53,647 22,058 2.1% 3.2% 79.3% 41.1% 26.0x 4.8x 4.5x 11.8x 11.1x Trupanion, Inc. 32.74 1,124 1,110 304 3 24.7% 27.4% 29.4% 1.1% NM 3.7x 3.0x NM 86.7x Virbac SA 164.09 1,383 1,900 975 133 0.8% 0.6% 66.1% 13.6% 39.4x 1.9x 1.9x 14.3x 12.8x Zoetis Inc. 100.67 48,198 52,946 5,825 2,176 9.8% 6.9% 67.3% 37.4% 45.7x 9.1x 8.6x 24.3x 20.9x Mean 8.4% 7.7% 58.2% 22.6% 50.8x 5.3x 5.0x 23.5x 38.2x Median 7.4% 6.9% 61.2% 20.8% 42.6x 5.1x 4.7x 20.5x 20.9x

Consumer Products with Pet Lines Church & Dwight Co., Inc. $71.23 $17,518 $19,315 $4,146 $942 9.8% 6.9% 44.4% 22.7% 39.7x 4.7x 4.6x 20.5x 20.0x Colgate-Palmolive Company 68.54 58,931 64,869 15,544 4,279 0.6% (1.0%) 59.6% 27.5% 28.4x 4.2x 4.2x 15.2x 15.5x JAKKS Pacific, Inc. 1.01 24 138 568 (12) (7.4%) (8.7%) 27.4% (2.2%) NM 0.2x 0.2x NM 5.4x Kao Corporation 78.68 38,288 37,118 13,609 2,497 1.2% 0.8% 43.4% 18.4% 32.4x 2.7x 2.4x 14.9x 13.1x The Clorox Company 160.46 20,565 22,923 6,244 1,296 3.4% 3.1% 43.5% 20.8% 32.1x 3.7x 3.4x 17.7x 16.2x Unicharm Corporation 33.06 19,724 19,430 6,211 1,131 7.3% (2.3%) 38.5% 18.2% 41.7x 3.1x 2.9x 17.2x 15.8x Mean 2.5% (0.2%) 42.8% 17.6% 34.9x 3.1x 3.0x 17.1x 14.3x Median 2.3% (0.1%) 43.4% 19.6% 32.4x 3.4x 3.2x 17.2x 15.7x

Source: CapitalIQ 18 SECTION III

Cascadia Capital Overview

19 Our Firm

Founded in 1999 Cascadia has a successful 19 year history INDUSTRY EXPERTISE investment banking 50 professionals Managing Directors in DEAL RESULTS 16 four cities VOLUME FOCUS OVER transactions completed, Headquartered in Seattle, with with over $15 billion in Managing Directors in Los Angeles, 315 aggregate value Minneapolis and New York

Leading diversified Experienced team with investment bank successful track record

• M&A, private placements, advisory services • Cascadia is the investment bank of choice for entrepreneurs and family-owned companies • Specialized in-depth expertise across multiple industry verticals • Decades of investment banking and operational expertise • Representing clients in the US and globally, including Europe, Asia and Australia • Deep capital markets expertise 20 Process and Experience Deliver Results

Team Members Have We Differentiate Each Our Experience Process With a Deep Industry and Approach Customized Drive Results Expertise Approach

• With bankers across multiple • We are thoughtful advisors who • We have experience, industry industry verticals, we have the deliver a tailored process to suit the focus and a differentiated experience to offer industry needs of our clients process that drives success breadth while maintaining sector • depth • We understand the strategies of the Our transactions are built upon counterparties, enabling us to tell delivering the best quantitative • Dedicated resource model with them why they should be interested and qualitative terms with the comprehensive vertical expertise – allowing Cascadia to drive the most desirable counterparty from Managing Director to Analyst transaction and maximize results

$10.0+ billion in total M&A transactions closed in the firm’s history

$5.0+ billion in total capital raised in the firm’s history 21 Closed Deals Overview

a portfolio company of

has been acquired by

June 2017

22 Pet Industry Transaction Experience

Pet Deal Experience

 10+ years of industry coverage

 17 closed transactions, with a meaningful emphasis on branded companies

 Nine deals within the consumables sector

 Four transactions in process

 $1.4+ billion in total transacted value

 $500+ million of in process deal value

 ~ $100 million in average transaction value(1)

 Over 100 indications of interest received on behalf of our clients

 Over 200 coverage relationships (company, buyer, investor)

 Dedicated pet industry team

Note: (1) Includes in process transactions 23