HYDE PARK CAPITAL Integrity | Expertise | Results Investment Banking | Mergers & Acquisitions | Capital Raising John Hill Senior Managing Director [email protected] (813) 383‐0205 John McDonald Senior Managing Director [email protected] (813) 383‐0206 Consumer & Retail Keith Hodgdon Managing Director M&A Report [email protected] (813) 383‐0208 Q2 2017 Greg Bosl Vice President [email protected] (813) 597‐2649 Jami Gold Vice President [email protected] (813) 383‐0203 Charlie Hendrick Vice President [email protected] (813) 383‐0207 Jeffrey Hendricks Vice President [email protected] (678) 523‐3073 Hyde Park Capital Advisors, LLC 701 N. Franklin Street Tampa, FL 33602 Tel: 813‐383‐0202 www.hydeparkcapital.com Member FINRA/SIPC Capital Markets Overview –Consumer & Retail Commentary Select Public Offerings – Consumer & Retail (Q2 2017) Transaction Offer Date Issuer Industry Sector Transaction Type Value ($mm) The S&P 500 and S&P 500 Retailing Index increased 15.2% and 13.7%, respectively, while the S&P 500 Consumer Durables & 05/09/17 Costco Wholesale Corp. Retail Fixed‐Income $3,783 Apparel Index increased 4.2% for the twelve month period ended 04/27/17 Pepsico, Inc. Food and Beverages Fixed‐Income $3,544 June 30, 2017. 04/19/17 Lowe's Co., Inc. Retail Fixed‐Income $2,988 The table on the right illustrates select public offerings completed 06/29/17 Albertsons Co., LLC Food and Beverages Fixed‐Income $2,500 in Q2 2017. Blue Apron Holdings, Inc. (NYSE:APRN), which 04/26/17 Netflix, Inc. Retail Fixed‐Income $1,414 operates an e‐commerce marketplace for home delivery of original recipes and pre‐portioned ingredients, raised $300 million in the 06/21/17 Taylor Morrison Home Corp. Homebuilding Secondary $464 largest IPO of the quarter. 06/07/17 CalAtlantic Group, Inc. Homebuilding Secondary $343 04/12/17 Hostess Brands, Inc. Food and Beverages Secondary $307 The Beverages and Packaged Foods sectors continued to lead the industry with respect to valuation during the 2nd quarter, trading 06/28/17 Blue Apron Holdings, Inc. Retail IPO $300 at EBITDA multiples of 16.6x and 12.8x, respectively. 04/26/17 Floor & Decor Holdings, Inc. Retail IPO $185 Public Market Performance (LTM) Public Company Market Performance by Sector 120% Median 15.2% Change in Stock Price Enterprise Value / LTM Industry Sector 3 Months 12 months Revenue EBITDA 110% 13.7% Specialty Retail 0.6% 2.9% 0.6x 6.1x Department Store Retail (8.3%) (11.4%) 0.4x 5.4x Discount Stores & Mass Merchants 1.8% (3.2%) 0.6x 9.4x 4.2% Apparel, Accessories & Footwear Retail (7.7%) (10.9%) 0.4x 5.2x 100% Apparel, Accessories & Footwear 6.1% 3.3% 1.1x 10.6x Furniture & Furnishings Retail 8.0% 14.1% 0.7x 8.0x Furniture & Furnishings Manufacturers (1.3%) (2.8%) 1.0x 8.1x Personal Care Products (0.3%) 2.5% 1.5x 12.7x 90% Household Products 6.2% 12.8% 2.2x 12.4x Recreational & Leisure Products 0.1% 5.7% 1.6x 11.5x Restaurants 8.1% 13.8% 1.7x 11.4x Packaged Foods (1.7%) (11.8%) 2.4x 12.8x 80% Jun‐16 Sep‐16 Dec‐16 Mar‐17 Jun‐17 Beverages 4.9% 3.3% 4.6x 16.6x Food Retail (3.6%) (6.7%) 0.5x 7.8x S&P 500 S&P 500 Retailing Index S&P 500 Consumer Durables & Apparel Index Source: S&P Capital IQ HYDE PARK CAPITAL 2 Investment Banking | Mergers & Acquisitions | Capital Raising Annual M&A Activity –Consumer & Retail Commentary Completed U.S. M&A Transactions by Deal Size As detailed in the charts below, Middle Market M&A activity in the ($ in billions) Consumer & Retail industry declined during the six month period 1H '16 1H '17 % Change ended June 30, 2017, with 60 closed transactions, a 10% decrease Deal Size Volume Value Volume Value Volume Value from the 67 transactions that closed during the prior half year Less than $100M 38 $1.7 32 $1.1 (16%) (32%) period. $100 ‐ $499M 25 $5.3 22 $4.9 (12%) (8%) $500 ‐ $999M 4 $2.5 6 $4.2 50% 67% Despite a drop in deal volume, the total value of completed Middle Total Middle Market 67 $9.5 60 $10.2 (10%) 7% Market M&A transactions in the Consumer & Retail industry during the first half of 2017 rose 7% to $10.2 billion, up from $9.5 billion % of Total Market during the first six months of 2016. Less than $100M 57% 18% 53% 11% $100 ‐ $499M 37% 56% 37% 48% $500 ‐ $999M 6% 26% 10% 41% While Middle Market Consumer & Retail M&A deal volume declined Total Middle Market 100% 100% 100% 100% throughout the year, completed deal volume and deal value increased for transactions valued between $500 million and $999 million, increasing 50% and 67%, respectively. U.S. M&A Activity – Annual Trends: VOLUME U.S. M&A Activity – Annual Trends: VALUE billions) in Total Transaction Volume Total Transaction Value ($ Less than $100M $100 ‐ $499M $500 ‐ $999M Less than $100M $100 ‐ $499M $500 ‐ $999M Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion) HYDE PARK CAPITAL 3 Investment Banking | Mergers & Acquisitions | Capital Raising Quarterly M&A Activity – Consumer & Retail Commentary Completed U.S. M&A Transactions by Deal Size ($ in billions) As detailed in the charts below, Middle Market M&A activity in the Consumer & Retail industry decreased during Q2 2017 compared Q2 2016 Q2 2017 % Change with Q2 2016. Middle Market M&A transaction volume decreased Deal Size Volume Value Volume Value Volume Value to 23 transactions, down 18% from 28 transactions in the prior Less than $100M 17 $0.8 13 $0.4 (24%) (53%) $100 ‐ $499M 10 $2.4 7 $1.1 (30%) (54%) year period. $500 ‐ $999M 1 $0.7 3 $1.9 200% 160% Total Middle Market 28 $3.9 23 $3.4 (18%) (14%) The total value of completed Middle Market M&A transactions in the Consumer & Retail industry fell 14% to $3.4 billion, down from % of Total Market $3.9 billion in Q2 2016. Less than $100M 61% 21% 57% 12% $100 ‐ $499M 36% 61% 30% 32% $500 ‐ $999M 3% 18% 13% 56% Throughout Q2 2017, transactions valued between $100 million Total Middle Market 100% 100% 100% 100% and $499 million had the steepest decline in deal volume, falling 30%, accompanied by a 54% decrease in value. U.S. M&A Activity –Quarterly Trends: VOLUME U.S. M&A Activity –Quarterly Trends: VALUE billions) in Total Transaction Volume Total Transaction Value ($ Less than $100M $100 ‐ $499M $500 ‐ $999M Less than $100M $100 ‐ $499M $500 ‐ $999M Source: S&P Capital IQ (middle market includes all closed deals with disclosed deal value between $10 million and $1 billion) HYDE PARK CAPITAL 4 Investment Banking | Mergers & Acquisitions | Capital Raising Recent M&A Activity –Consumer & Retail Select M&A Transactions (Q2 2017) Announced Enterprise EV / EV / Date Target Buyer Industry Value ($mm) Revenue EBITDA NORPAC Foods, Inc. 06/30/17 Seneca Foods Corp. Food and Beverage NA NA NA (Canning Business) Rite Aid Corp. 06/29/17 Walgreen Co. Retail $5,175.0 NA NA (2,186 Stores) 06/29/17 West Marine, Inc. Monomoy Capital Partners Retail $290.7 0.4x 7.7x 06/28/17 Staples, Inc. Sycamore Partners Retail $6,555.0 0.4x 5.2x 06/28/17 Milestone AV Technologies, LLC Legrand North America, Inc. Household and Personal Products $1,200.0 2.6x 9.0x 06/15/17 Express Oil, LLC Golden Gate Capital Retail NA NA NA 06/21/17 Casamigos Spirits Co. Diageo North America, Inc. Food and Beverage $1,000.0 NA NA 05/01/17 Gander Mountain Co., Inc. Camping World Holdings, Inc. Retail $34.1 NA NA 06/16/17 Whole Foods Market, Inc. Amazon.com, Inc. Retail $13,732.7 0.9x 10.3x 06/16/17 Bonobos, Inc. Wal‐Mart Stores, Inc. Apparel , Accessories, & Footwear $310.0 NA NA 06/16/17 ID Watchdog, Inc. Equifax Consumer Services, Inc. Retail $63.0 5.6x 79.2x 04/01/17 K‐2 Corp. Skis Rossignol SAS Retail NA NA NA 06/01/17 PDC Brands CVC Capital Partners Ltd. Household and Personal Products NA NA NA 05/31/17 Medcart LTC, Inc. Albertsons, LLC Retail NA NA NA Conagra Brands, Inc. 05/30/17 The J. M. Smucker Company Food and Beverage $285.0 NA NA (Wesson Oil) Source: S&P Capital IQ HYDE PARK CAPITAL 5 Investment Banking | Mergers & Acquisitions | Capital Raising Recent M&A Activity –Consumer & Retail Select M&A Transactions (Q2 2017) Announced Enterprise EV / EV / Date Target Buyer Industry Value ($mm) Revenue EBITDA Newell Brands, Inc. 05/26/17 Kohlberg & Co., LLC Retail $240.0 0.7x 9.6x (Winter Sports Business) 05/22/17 Nutraceutical Intl. Corp. HGGC, LLC Household and Personal Products $426.5 1.8x 9.9x 05/10/17 Taylor Made Golf Co., Inc. KPS Capital Partners Retail NA NA NA 05/08/17 Kate Spade & Co. Coach, Inc. Retail $2,354.1 1.7x 10.3x 05/04/17 The Lagunitas Brewing Co. Heineken USA, Inc. Food and Beverage NA NA NA 05/03/17 Wicked Weed Brewing, LLC Anheuser‐Busch Co., LLC Food and Beverage NA NA NA 06/22/17 Uncle Matt's Organic, Inc. Dean Foods Co. Food and Beverage NA NA NA 04/25/17 AdvancePierre Foods Holdings, Inc. Tyson Foods, Inc. Food and Beverage $4,349.8 2.8x 17.0x 04/18/17 Chewy, Inc.