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By on 2014-12-11
Each week we share learnings and insights from experts in the consumer product and retail space. This week’s insights come from Lincoln International , a leading investment bank servicing the consumer industry. Lincoln specializes in merger and acquisition advisory services, debt advisory services, private capital raising and restructuring advice on mid-market transactions.
Summary Observations: Activity in Food & Beverage Sector
- Growth-challenged companies are interested in high growth, natural food brands, as exemplified by General Mills’ acquisition of Annie’s at 3.9 times sales
- The Annie’s acquisition increases the focus on other high growth, health and wellness companies, such as WhiteWave Foods and Boulder Brands
- During Q3 2014, there were 64 announced M&A transactions involving the acquisition of North American food and beverage targets, down 6% from Q3 2013
- 83% went to strategic acquirers; 17% went to financial and other acquirers. Notable deals announced in Q3 2014 include:
- Pabst Brewing Company’s sale to Oasis Beverages and TSG Consumer Partners in a deal estimated at $700 to $750 million
- WhiteWave’s acquisition of Turtle Mountain (d/b/a So Delicious Dairy Free) from Wasserstein & Co. for $195 million
- Ajinomoto’s acquisition of Windsor Quality Foods for $800 million
- General Mills’ acquisition of Annie’s for $821 million
Selected North American M&A Transactions
| Announced Date | Target | Acquirer | Enterprise Value ($mm) | EV / Sales | EV / EBITDA |
|---|---|---|---|---|---|
| 9/29/14 | SweetWater Brewing Company, LLC | TSG Consumer Partners | – | – | – |
| 9/26/14 | Daily’s Foods, Inc. | Triumph Foods, LLC | $145 | – | – |
| 9/23/14 | Procter & Gamble, European Pet Food Business | Spectrum Brands Holdings, Inc. | – | – | – |
| 9/18/14 | Pabst Brewing Company, Inc. | TSG Consumer Partners; Oasis Beverages Cyprus Limited | – | – | – |
| 9/17/14 | Turtle Mountain, LLC | The WhiteWave Foods Company | 195 | 1.7x | – |
| 9/10/14 | Windsor Quality Food Company, Ltd | Ajinomoto North America, Inc. | 800 | 1.2x | – |
| 9/8/14 | Annie’s, Inc. | General Mills, Inc. | 821 | 3.9x | 38.6x |
| 9/8/14 | JTM Foods, Inc. | Kainos Capital, LLC | – | – | – |
| 9/5/14 | Great Lakes Specialty Meats of Canada Inc. | Sofina Foods Inc. | – | – | – |
| 9/2/14 | Archer Daniels Midland Company, Chocolate Business | Cargill, Incorporated | 440 | – | – |
| 8/20/14 | McCain Foods Limited, N. American Frozen Pizza Business | Dr. Oetker GmbH | – | – | – |
| 8/18/14 | Tate’s Bake Shop, Inc. | The Riverside Company | – | – | – |
| 8/12/14 | Leo’s Foods, Inc. | Wise Foods, Inc. | – | – | – |
| 8/11/14 | Chiquita Brands International Inc. | Sucocitrico Cutrale Ltda; Banco Safra S. | 1,240 | 0.4x | 14.1x |
| 8/11/14 | Continental Seasoning, Inc. | Newly Weds Foods, Inc. | – | – | – |
| 8/7/14 | American Blanching Co., Inc. | Nuts Distributor of America Inc. | 128 | – | – |
| 8/6/14 | Sahale Snacks, Inc. | The J. M. Smucker Company | – | – | – |
| 8/1/14 | Mighty Leaf Tea Company | Peet’s Coffee & Tea, Inc.; Next World Group | – | – | – |
| 7/22/14 | Davisco; Dairy Processing Assets | Agropur Cooperative | – | – | – |
| 7/17/14 | Hain Pure Protein Corporation | The Hain Celestial Group, Inc. | 44 | – | – |
| 7/14/14 | Russell Stover Candies, Inc. | Chocoladefabriken Lindt & Spruengli AG | – | – | – |
| 7/10/14 | Avion Spirits | Pernod Ricard USA, LLC | – | – | – |
| 7/7/14 | Truco Enterprises, LP | Insignia Capital Group, LLC | – | – | – |
| 7/4/14 | Apple & Eve, LLC | Lassonde Industries Inc. | 148 | – | 9.7x |
Sources: Capital IQ as of 9/30/2014, Mergermarket