sector update | july 2018 · 2 introduction & overview opus advisory partners is pleased to...

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FOOD, BEVERAGE & AGRIBUSINESSSECTOR UPDATE | JULY 2018

CORPORATE STRATEGY | CAPITAL | ACQUISITIONS & DIVESTITURES | CORPORATE FINANCE WWW.OPUSAP.COM

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INTRODUCTION & OVERVIEW

Opus Advisory Partners is pleased to provide you with its July 2018 Food, Beverage & Agribusiness (FBA) Sector Update, whichprovides a summary of recent sector activity, market trends, operating metrics, valuation information and transaction activity.

KEY HIGHLIGHTS OF THIS REPORT

Opus Advisory Partners publishes this FBA sector update to support corporate decision makers with their strategic planning, growth and transactional initiatives.

Mark ForbessManaging Director(404) [email protected]

Lee MiklovicManaging Director(404) [email protected]

Josh BakerVice President(404) [email protected]

To subscribe to our FBA sector update, please visit our website or email us at [email protected].

FIRM OVERVIEWOpus Advisory Partners advises clients on accelerating growth, building shareholder value, and maximizing returns. The firm provides advice and execution services to senior executives, board members and key shareholders in the areas of corporate strategy, corporate finance, M&A and debt & equity capital, with a primary focus on growth and value creation.

Corporate Strategy• Shareholder Value Enhancement• Market Expansion & New Market Entry• Competitive & Market Analysis• M&A Integration

Investment Banking• Debt & Equity Capital• Acquisitions & Joint Ventures• Divestitures & Buyouts• Recapitalizations

Corporate Finance Advisory• Valuations & Opinions• Scenario Modeling & Analysis• Restructurings

FOOD, BEVERAGE & AGRIBUSINESS (FBA) SECTORLeveraging our midwestern and southern farming roots, and having a genuine love and curiosity for foods and beverages, our team is passionate about the FBA sector.

This report is designed to provide insight to strategic decision makers of standalone companies and divisions as it relates to the food, beverage & agribusiness (FBA) sector, which we define broadly to include foods and beverages, agricultural products and services, and related participants in the FBA ecosystem. Within the FBA sector, we include the following end markets and niches:

• Food, beverage and ingredient manufacturers• Growers, producers & processors• Equipment & technology providers• Agricultural products manufacturers

More specifically, we cover branded and private label products, natural/organic foods, baked goods, dairy, non-alcoholic and alcoholic beverages, snacks, meats, fruits & vegetables, and ingredients & flavors.

CONTENTS

• Industry Trends & Growth Opportunities

• Food & Beverage Price Indices• Food for Thought• Subsector Stock Returns• Acquisition Activity• Notable Acquisitions• Growth & Valuation Metrics• Operating Metrics• Appendix: Public Company Data

• Reciprocal foreign tariffs are hurting U.S. farmers as other countries are reducing or canceling existing orders

• Since the acquisition of Whole Foods Market by Amazon, five of the top-six best selling products are dairy-based or dairy alternative products

• Investments in the food, beverage & agribusiness sector continue to flourish as changing consumer preferences are driving upstream growth opportunities

• Food commodity prices remain stable, except for poultry, which has increased approximately 20% in the last quarter

• The year-to-date (6-30-2018) change in stock prices for the FBA sector was -0.8% (based on median data), although stock price appreciation for non-alcoholic beverages was 5.3%

• Overall acquisition activity and multiples have remained stable through March 2018

• Premium Brands continued to be active, acquiring five (5) companies in the first half of 2018

• Conagra announced in late June that it will acquire Pinnacle Foods for approximately $10.6 Billion (EV/EBITDA multiple of 16.1x)

FBA TEAM CONTACTSOPUS ADVISORY PARTNERS—OVERVIEW


mailto:[email protected]




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INDUSTRY TRENDS AND GROWTH OPPORTUNITIES


Whole Foods Market’s Best-Selling Brands Since the acquisition by Amazon of Whole Foods Market (WFM), suppliers to WFM have faced reduced margins (product price reductions, restocking fees, etc.) as WFM subsidizes consumer price cuts and Prime member discounts. However, WFM store revenues continue to grow. We tracked the top-selling store brands (as a percent of overall sales) since the acquisition announcement. Interestingly, five (5) of the top six leading brands involve yogurt and dairy-related alternatives. Here are the results:

Note: Excludes WFM’s 365 Brand (ranked #2). Source: InMarket, Wall Street Journal.

Growth by Targeted “Small-Brand” AcquisitionsInternal, organic growth is becoming harder to source for food companies, especially large, traditional packaged food companies like Kraft-Heinz, Campbell Soup and many others. These companies are facing extreme pressure to reinvent themselves as consumer preferences change and brand loyalty shifts or erodes entirely. Moreover, consumers are demanding more customized and fresh food solutions and often align with food companies that have a mission or compelling story. And consumers are willing to pay more for higher quality. As we have indicated in prior reports, we expect that niche brand acquisitions are the answer.

In the absence of internally developed new brands with a relatable story, strategic acquisitions can achieve two critical goals: (i) rapid, profitable growth, and (ii) incremental value creation.

Unlike many “mega” deals, the acquisition of specialized brands that play to an acquiror’s strengths may provide opportunities for significant and immediate retail store penetration, brand extensions, expense synergies and a growing social media following. Anheuser-Busch InBev’s serial acquisitions of craft beer breweries and General Mills’ acquisition of Annie’s Homegrown are examples. Acquiring or investing in numerous small brands reduces overall brand portfolio risk and drives growth on a short-term and long-term basis. As such, we anticipate a greater number of smaller tuck-in acquisitions and strategic investments to occur within the sector.

Tariffs, Exports and Rising U.S. Food PricesU.S. tariffs on international goods have now triggered backlash from other countries, most notably with food products. Accordingly, Mexico, Canada and China have recently imposed tariffs on U.S. foods and farm goods leaving much of the entire food ecosystem in a state of uncertainty. Farms and food companies that have recently expanded to meet anticipated international demand now face losses. We expect food prices in the U.S. to increase and U.S. food suppliers to face continuing sales and margin pressures.

According to the U.S. Department of Agriculture (USDA), the United States exported approximately $138B of agricultural goods in 2017—a $21.3B U.S. surplus. Soybeans, dairy and pork are among the largest exports. U.S. dairy producers have been relying on exports, particularly to Mexico, to counteract a recent surplus. But Mexico is implementing tariffs of 10%-25% on U.S. farm products and evaluating alternative import options with other countries. China, the largest buyer of

U.S. soybeans, has begun canceling orders.

Early-Stage Investments in FBA are Strong Because of industry fragmentation and changing consumer preferences, FBA investment opportunities continue to be strong. In 2017, there was approximately $10.1B invested in the sector, an increase of 29% despite a 17% decrease in the number of deals (994 total deals in 2017) primarily due to a drop in early-stage investments.

Sources: AgFunder, Crunchbase.

However, we predict increased growth investment in the sector from both early & late-stage venture capital funds and corporate venture arms across multiple disciplines to include:

• Alternative agricultural methods, growth alternatives and new formulation methods

• Advanced farming technology• Healthier, more customized food processing

methods• New food concepts and formulations• Protein and dairy alternatives• Organic food alternatives

1.66%

0.57%

0.40%

0.38%

0.35%

0.34%

0.34%

0.31%

0.30%

0.30%

Driscoll's

Siggi's

Fage

Stonyfield Organic

So Delicious

Wallaby Organic

KeVita

GT's Living Foods

Clif Bar

Amy's Kitchen0

50

100

150

200

250

300

350

400

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Q1

20

14

Q2

20

14

Q3

20

14

Q4

20

14

Q1

20

15

Q2

20

15

Q3

20

15

Q4

20

15

Q1

20

16

Q2

20

16

Q3

20

16

Q4

20

16

Q1

20

17

Q2

20

17

Q3

20

17

Q4

20

17

Funds Raised ($MM)Financings

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FOOD & BEVERAGE PRICE INDICES


FOOD & BEVERAGE INPUT COSTS: CHANGE IN PRODUCER PRICE INDEX

CONSUMER PRICE INDEX—FOOD

PROTEIN PRICE INDICESCOMMODITY PRICE INDICES

Source: U.S. Bureau of Labor Statistics, U.S. Department of Agriculture.

-15%

-10%

-5%

0%

5%

Unprocessed Foods/Feeds Processed Foods/Feeds Finished Consumer Foods

2015 2016 2017 YTD

10-Yr. Avg.10-Yr. Avg. 10-Yr. Avg.

86.2

108.3

102.5

60

70

80

90

100

110

120

130

Mar-2015 Sep-2015 Mar-2016 Sep-2016 Mar-2017 Sep-2017 Mar-2018

Beef Poultry Pork

103.0102.9

96.0

142.7

40

50

60

70

80

90

100

110

120

130

140

150


Soybeans Corn Wheat Crude Oil

1.23%

0.14%

2.68%

-3%

-2%

-1%

0%

1%

2%

3%

4%


All Food Food at Home Food Away from Home

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FOOD FOR THOUGHT


Catering to Emerging Market Trends(Lawrence Kurzius, CEO of McCormick & Company, Inc., Jun 2018)“At the foundation of our sales growth is the rising consumer demand for flavor. We are aligned with the consumers' increased interest in bolder flavors, demand for convenience and focus on fresh, natural ingredients as well as with emerging purchase drivers, such as greater transparency around the sourcing and quality of food…”

Building an Innovation Pipeline(Sean Connolly, CEO of Conagra Brands, Inc., Jun 2018)“Recognizing that cost cutting wasn't enough, we outlined a plan to bend the top line trend by building an innovation pipeline supported by new marketing programs and adding on-trend brands through modernizing acquisitions like Blake's, Frontera, Thanasi Foods, Angie's BOOMCHICKAPOP and Sandwich Bros. with the focus on driving profitable growth…But we knew we had to grow, so we strengthened our foundation by pruning low-value SKUs, updating our innovation capabilities to modernize our iconic brands and investing behind on-trend brands consumers are demanding.”

Executing on a Multi-Tiered Growth Strategy (Jeffrey Harmening, CEO of General Mills, Inc., Jun 2018)“Earlier this year, we outlined three global priorities to return our business to consistent top line growth: 1) compete effectively everywhere we play across all our brands and geographies; 2) accelerate growth on four key platforms where we have leading brands, capabilities and attractive margins and with playing faster-growing categories; and 3) reshape our portfolio for growth through acquisitions and divestitures. We've made progress against each of these priorities in fiscal 2018…”

Growing in a Low-Growth Environment(Laurent Freixe, Executive VP of Nestle S.A., Jun 2018)“We really want to drive what I call a strategic virtuous circle of sustainable and profitable growth…so we put a lot of focus on achieving efficiencies in our value chain and in our cost structure, not only to fuel margins (that is part of the agenda), but also to generate the resources, the fuel for the growth that we can invest behind our brands, that we can invest behind innovation to drive market share gains. If you want to grow in a low growth environment, you have to gain market share, drive category growth…and we are fundamentally pursuing a holistic growth model, including internal and external innovation, but including, as well, M&A.”

Small Brands Are Taking a Thousand Little Bites Out of Campbell’s BusinessTraditional food brands are struggling to keep up with small, nascent food companies that feature unique and healthier ingredient combinations. You can access the article here.

Why the Frozen-Food Aisle Is Hot Right Now Frozen food manufacturers are refreshing mainstay brands to focus on healthier, trendier meal options. You can access the article here.

It's Becoming More Expensive to Be a Whole Foods Supplier Sweeping changes are occurring at Whole Foods Market as suppliers face new requirements and fees, albeit with higher revenue growth and Amazon crossover opportunities. More information can be found here.

Food Companies Can’t Figure Out What Americans Want to Eat Traditional food manufacturers struggle to keep up with consumers who are shifting to fresh from packaged products while new entrants compete on price and quality. You can access this article here.

Bringing Farming Back to NatureAgroecology, a new approach to creating a healthier and more sustainable food system through transforming the way we grow food, is being tested globally. You can view the article here.

Who Will Win the Agribusiness Marketplace Race for Inputs?Efforts are underway to form agribusiness marketplaces that pool the needs of multiple farmers to achieve lower input prices. You can find out more here.

Certified Organic Survey Shows Continued U.S. GrowthU.S. organic agricultural production increased 23% while the number of organic farms increased 11% to over 14,200. You can view the article here.

What is IoT in Agriculture? Farmers Aren’t Quite Sure Despite $4B OpportunityLess than 15% of farmers are estimated to be using IoT solutions on the farm (250,000 farms) as more growth is anticipated. You can access the article here.

NOTABLE COMMENTS BY INDUSTRY EXECUTIVES SECTOR NEWS OF INTEREST

https://on.wsj.com/2N1f8tY

https://on.wsj.com/2NCVB4h

https://bit.ly/2zpIwIe

https://on.wsj.com/2JkEfq2

https://nyti.ms/2N0CS1X

https://bit.ly/2L44kxC

https://bit.ly/2ztCZRb

https://bit.ly/2KFU2V8

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SUBSECTOR STOCK RETURNS & ACQUISITION ACTIVITY

Summary Highlights • Overall, YTD 2018 performance across

the sector has seen a decline (-0.8% median change overall) due to reduced earnings growth expectations and uncertainty

• Beverages (alcoholic and non-alcoholic) have seen the largest increases in equity market capitalizations since 2015 and in 2018 YTD

• While revenue growth estimates for all subsectors are positive, we believe that profitability growth is slowing, based on shifting consumer food trends

Summary Highlights • M&A activity through Q1 2018 is on pace

with 2017 levels while transaction multiples have stabilized

• Premium Brands has announced five (5) acquisitions in 2018 as beverage manufacturers continue to expand their product portfolio

• We expect additional acquisitions to occur in (i) healthy, better-for-you foods & beverages, and (ii) snacking consumables

Public Company Stock Returns by FBA Subsector

Selected Active Strategic Acquirors (2015—YTD 2018)U.S. Merger & Acquisition Activity (2012-YTD 2018)


Notes: (1) Annual stock price returns based on subsector constituent group; excludes dividends.(2) Merger and acquisition activity involving U.S. targets only; year-to-date 3-31-2018.(3) Sources: public data, S&P Capital IQ, Opus Advisory Partners.

0x

2x

4x

6x

8x

10x

12x

14x

16x

0

100

200

300

400

500

600

2012 2013 2014 2015 2016 2017 YTD 2018

Transactions EBITDA Multiple

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

2015 2016 2017 YTD 2018

S&P 500

Branded Processed

Foods

Private Label

Food/Bev

Natural/ Organic Baked

Goods

Dairy

Non-Alcoholic

Beverages

Alcoholic Beverages

Protein Processing

Fruits/ Vegetab.

Ingredients/ Flavors

Agri-Business

Snacks

0 2 4 6 8 10 12 14 16 18 20

Premium Brands

Unilever

Anheuser Busch

Kerry Group plc

Archer Daniels

Constellation Brands

Cargill

Conagra

McCormick & Co.

Int'l Flavors & Frag.

Nestle

Number of Transactions

2015

2016

2017

YTD 6-30

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Acquiror TargetDate

AnnouncedEnterpriseValuation Summary / Rationale

Brynwood Partners U.S. Baking Business of J.M. Smucker Co.

7/9/2018 $375MM • The acquisition includes Pillsbury and Funfetti baking mixes, along with Hungry Jack Pancakes, Martha White, White Lily and Jim Dandy

• Brynwood specializes in carving out underperforming businesses from food giants, and plans to invest in existing platform and new growth initiatives

Conagra Brands, Inc. Pinnacle Foods, Inc. 6/27/2018 $10.9B • The acquisition generates $11 billion in combined net sales with iconic brands—among the fastest-growing portfolios in the industry

• The combined entity will have leading positions in frozen foods, snacking, refrigerated foods and grocery categories

• EV/EBITDA: 16.1x; EV/Revenue:3.5x

The Kroger Co. Home Chef 5/23/2018 $700MM • The acquisition allows Kroger to offer Home Chef meal kits on grocery store shelves

• The purchase price consists of $200MM paid at closing, with future earn-out payments of up to $500MM over five years, contingent on achieving certain milestones

• EV/Revenue: 2.8x

International Flavors and Fragrances

Frutarom 5/7/2018 $7.1B • The transaction establishes a global leader in natural taste, scent and nutrition (75% of Frutarom’s sales are all-natural)

• Frutarom’s portfolio creates opportunities to expand into natural colors, enzymes, antioxidants and health ingredients

• EV/EBITDA: 26.4x; EV/Revenue: 5.0x

Mondelēz International Tate’s Bake Shop 5/6/2018 $500MM • The acquisition allows for entry into the fast-growing premium cookie segment

• Mondelēz will operate Tate’s as a separate standalone business to nurture its entrepreneurial spirit and maintain the authenticity of the brand, while providing resources to accelerate growth

Charlesbank Capital Partners and Partners Group

Hearthside Food Solutions 4/17/2018 $2.4B • Hearthside is a contract food manufacturer for baked goods, snack/energy bars, cookies, crackers, pretzels, etc.

• As part of a management buyout, Charlesbank Capital Partners and Partners Group will be focused on internal product development/ expansion and manufacturing optimization

• The Company will also seek selected add-on acquisitions

SELECTED NOTABLE M&A TRANSACTIONS


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SELECTED VALUATION AND GROWTH METRICS BY SUBSECTOR

Summary Highlights• FBA companies collectively trade at a

median TTM EBITDA multiple of 13.5x; we anticipate valuation levels to stabilize in 2018 across the overall FBA sector

• Beverages (alcoholic and non-alcoholic) and Organic Foods companies exhibit the highest TTM EBITDA multiples (over 15.0x) based on growth prospects and operating scalability

Summary Highlights• Collectively, the FBA sector is projected

to grow at a median 3.7% CAGR over the next three years—higher than the three-year historical median CAGR of 2.6%

• Revenue growth is being fueled by increased consumer demand for higher-priced, higher-quality products versus traditional food staples such as packaged meals

Public Valuation Multiples—EV / NTM EBITDAPublic Valuation Multiples—EV / TTM EBITDA

Projected Revenue CAGR—Next 3 YearsHistorical Revenue CAGR—Last 3 Years


Notes: (1) Data based on median information; trailing 12 months (TTM) as of June 29, 2018. (2) EV = enterprise value; CAGR = compound annual growth rate; NTM = next 12 months.(3) EBITDA = earnings before interest, taxes, depreciation and amortization.(4) Source: Opus Advisory Partners, S&P CapitalIQ, Thomson Reuters.

-8% -6% -4% -2% 0% 2% 4% 6% 8%

Branded Processed Foods

Private Label Foods & Beverages

Natural/Organic Foods

Baked Goods

Dairy

Non-Alcoholic Beverages

Alcoholic Beverages

Snacks

Protein Processing

Fruits & Vegetables

Ingredients & Flavors

Agribusiness

0% 1% 2% 3% 4% 5%




Baked Goods

Dairy


Alcoholic Beverages

Snacks

Protein Processing

Fruits & Vegetables


Agribusiness

0x 5x 10x 15x 20x




Baked Goods

Dairy


Alcoholic Beverages

Snacks

Protein Processing

Fruits & Vegetables


Agribusiness

0x 5x 10x 15x 20x




Baked Goods

Dairy


Alcoholic Beverages

Snacks

Protein Processing

Fruits & Vegetables


Agribusiness

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SELECTED OPERATING METRICS BY SUBSECTOR

Summary Highlights• Beverages (alcoholic and non-alcoholic) and

Branded Processed Foods command the largest adjusted EBITDA margins

• The manufacturing scale and technology inherent in these categories, as well as the high product utility, allow companies to operate on a highly efficient basis

• Beverages and Branded Processed Foods categories exhibit attractive gross margins largely due to scale

Summary Highlights• Overall industry net leverage has increased

every year since 2015 as companies have funded new growth initiatives related to changing consumer tastes

• Two subsectors have accumulated significant leverage: Private Label Foods/Beverages (4.5x) and Natural/ Organic Foods (4.0x) primarily due to acquisitions or operational challenges

• Agribusiness, Alcoholic Beverages and Ingredients & Flavors are investing heavily in capital expenditures in support of manufacturing upgrades and technology efficiencies

Gross Margin (TTM)Adjusted EBITDA Margin (TTM)

CapEx as a Percent of Revenues (TTM)Net Leverage Ratio (TTM)


Notes: (1) Data based on median information; trailing 12 months (TTM) as of June 29, 2018.(2) Net leverage is equal to net debt (total debt less cash & equivalents) divided by TTM adjusted EBITDA.(3) EBITDA = earnings before interest, taxes, depreciation and amortization. (4) Source: Opus Advisory Partners, Thomson Reuters.

0% 5% 10% 15% 20% 25% 30% 35%




Baked Goods

Dairy


Alcoholic Beverages

Snacks

Protein Processing

Fruits & Vegetables


Agribusiness

0% 10% 20% 30% 40% 50% 60%




Baked Goods

Dairy


Alcoholic Beverages

Snacks

Protein Processing

Fruits & Vegetables


Agribusiness

0x 1x 2x 3x 4x 5x




Baked Goods

Dairy


Alcoholic Beverages

Snacks

Protein Processing

Fruits & Vegetables


Agribusiness

0% 1% 2% 3% 4% 5% 6% 7%




Baked Goods

Dairy


Alcoholic Beverages

Snacks

Protein Processing

Fruits & Vegetables


Agribusiness

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APPENDIX: SELECTED PUBLICLY HELD COMPANY VALUATION METRICS


(U.S. dollars in millions, except per share data) 3-Year 3-Year

Percent Equity Hist. Proj. TTM Net Price/

of 52-Wk Market Enterprise TTM Revenue Revenue EBITDA Debt/ TTM TTM NTM Forward

Country Ticker High Value (1) Value (1)(2) Revenues CAGR CAGR Margin EBITDA Revenues EBITDA EBITDA Earnings

Multiple of Enterprise Value (3):

Valuation Metrics


Nestle S.A. Switz. NESN:SW 89.0% 231,345$ 250,493$ 90,043$ -0.7% 3.7% 20.0% 0.8x 2.78x 13.9x 13.2x 20.1x

Associated British Foods plc U.K. ABF:LN 80.8% 28,344 28,293 20,246 5.9% 4.8% 12.5% 0.0x 1.40x 11.2x 10.6x 18.8x

General Mills, Inc. U.S. GIS 72.9% 26,241 42,012 15,740 -3.7% 4.4% 21.1% 4.6x 2.67x 12.7x 11.4x 14.4x

Kellogg Company U.S. K 97.5% 24,234 32,638 13,070 -3.9% 2.3% 18.5% 3.5x 2.50x 13.5x 12.6x 15.7x

Hormel Foods Corp. U.S. HRL 97.9% 19,740 20,293 9,362 -0.5% 4.2% 14.7% 0.4x 2.17x 14.8x 14.0x 20.0x

McCormick & Company, Inc. U.S. MKC 98.5% 14,080 19,044 5,241 4.4% 6.5% 20.1% 4.7x 3.63x 18.1x 16.2x 22.7x

ConAgra Foods, Inc. U.S. CAG 90.6% 14,060 17,748 7,938 -4.2% 1.0% 19.3% 2.4x 2.24x 11.6x 12.1x 15.8x

Hershey Company U.S. HSY 80.3% 13,840 17,991 7,608 0.4% 3.0% 23.9% 2.3x 2.36x 9.9x 9.5x 17.1x

J.M. Smucker Company U.S. SJM 80.6% 12,203 16,827 7,357 8.9% 4.6% 25.1% 2.5x 2.29x 9.1x 9.7x 12.7x

Campbell Soup Company U.S. CPB 74.6% 12,188 21,839 8,130 -1.5% 9.6% 21.6% 5.5x 2.69x 12.4x 11.6x 16.5x

Post Holdsings, Inc. U.S. POST 96.7% 5,788 12,907 5,740 29.4% 8.1% 19.6% 6.3x 2.25x 11.5x 10.1x 17.5x

B&G Foods, Inc. U.S. BGS 75.2% 1,991 3,970 1,682 25.3% 2.0% 19.7% 6.0x 2.36x 12.0x 11.3x 14.3x

Median 84.9% -0.1% 4.3% 19.8% 3.0x 2.36x 12.2x 11.5x 16.8x


TreeHouse Foods, Inc. U.S. THS 61.1% 2,958$ 5,359$ 6,252$ 28.9% -0.1% 8.6% 4.4x 0.86x 9.9x 9.7x 23.5x

Cott Corp. U.S. COT 93.1% 2,305 3,388 2,727 2.6% 3.7% 12.5% 3.2x 1.24x 9.9x 10.4x N/M

Seneca Foods Corp. U.S. SENEA 73.8% 212 659 1,315 -2.4% N/A 3.4% 9.9x 0.50x 14.6x N/A N/M

Median 73.8% 2.6% 1.8% 8.6% 4.4x 0.86x 9.9x 10.1x 23.5x


Pinnacle Foods, Inc. U.S. PF 92.3% 7,732$ 10,414$ 3,157$ 6.7% 1.3% 21.4% 4.0x 3.30x 15.4x 14.7x 22.0x

Hain Celestial Group, Inc. U.S. HAIN 65.3% 3,230 3,862 2,841 10.6% -2.6% 10.6% 2.1x 1.36x 12.8x 14.2x 23.9x

SunOptima Inc. U.S. STKL 82.4% 728 1,272 1,262 5.1% 2.0% 4.8% 7.7x 1.01x 21.1x 15.0x N/M

Median 82.4% 6.7% 1.3% 10.6% 4.0x 1.36x 15.4x 14.7x 22.9x

(1) Based on reported fully diluted shares and closing prices as of 06/29/2018.

(2) Enterprise value equal to equity market value, (i) plus outstanding debt, preferred stock and non-controlling interests, (ii) less cash & equivalents and short-term investments.

(3) EBITDA refers to earnings before interest, taxes, depreciation & amortization, adjusted for certain non-recurring items.

Source: S&P Capital IQ, Opus Advisory Partners, SEC public filings.

Note: N/A = Not Applicable; N/M = Not Meaningful; TTM = Trailing 12 Months; NTM = Next 12 Months; CAGR = Compound Annual Growth Rate.

11

APPENDIX: SELECTED PUBLICLY HELD COMPANY VALUATION METRICS (cont.)







Valuation Metrics

Baked Goods

George Weston Ltd. Can. WN:CN 90.3% 10,363$ 25,174$ 36,421$ 3.2% 2.2% 9.0% 2.8x 0.69x 7.7x 7.9x 14.7x

Flowers Foods, Inc. U.S. FLO 91.3% 4,391 5,187 4,219 1.5% 1.7% 10.9% 1.7x 1.23x 11.3x 11.1x 19.0x

Lancaster Colony Corp. U.S. LANC 97.8% 3,804 3,616 1,205 4.9% 1.9% 16.3% 0.0x 3.00x 18.4x 16.9x 27.2x

Aryzta AG Switz. YZA:ID 37.4% 1,388 3,304 4,254 3.8% 0.4% 9.6% 4.7x 0.78x 8.1x 6.8x 7.3x

Median 90.8% 3.5% 1.8% 10.2% 2.3x 1.00x 9.7x 9.5x 16.8x

Dairy

Saputo Inc. Can. SAP:CN 91.7% 16,924$ 18,420$ 8,715$ 2.7% 9.1% 11.0% 1.2x 2.11x 19.3x 17.2x 22.1x

Parmalat S.p.A. Italy PLT:IM 88.1% 6,195 5,921 7,745 6.5% 4.1% 6.8% 0.0x 0.76x 11.3x 9.3x 32.8x

Savencia SA Fra. SAVE:FP 82.6% 1,207 1,950 5,613 1.7% 3.7% 5.7% 1.9x 0.35x 6.1x 5.1x 9.5x

Dean Foods Company U.S. DF 59.7% 960 1,839 7,780 -6.4% -1.5% 4.3% 2.6x 0.24x 5.5x 5.9x 15.7x

Lifeway Foods, Inc. U.S. LWAY 46.8% 80 82 116 0.0% N/A 1.6% 1.2x 0.71x N/M 6.9x N/M

Median 82.6% 1.7% 3.9% 5.7% 1.2x 0.71x 8.7x 6.9x 18.9x


Coca-Cola Company U.S. KO 90.2% 186,636$ 216,217$ 33,918$ -8.4% -1.0% 32.3% 2.4x 6.37x 19.8x 18.4x 20.8x

PepsiCo, Inc. U.S. PEP 88.9% 154,361 177,384 64,038 -1.6% 3.0% 20.4% 1.6x 2.77x 13.6x 13.1x 19.0x

Monster Beverage Corp. U.S. MNST 81.6% 32,242 31,145 3,478 11.0% 10.5% 36.8% 0.0x 8.96x 24.3x 22.5x 32.6x

Dr. Pepper Snapple Group, Inc. U.S. DPS 96.3% 21,987 26,492 6,774 3.0% 3.1% 23.6% 2.8x 3.91x 16.5x 16.2x 23.3x

National Beverage Corp. U.S. FIZZ 82.3% 4,983 4,794 976 14.7% 17.6% 22.3% 0.0x 4.91x 22.0x 19.1x 27.5x

Cott Corp. U.S. COT 93.1% 2,305 3,388 2,727 2.6% 3.7% 12.5% 3.2x 1.24x 9.9x 10.4x N/M

Lassonde Industries, Inc. Can. LAS.A:CN 94.0% 1,477 1,647 1,142 8.9% N/A 11.6% 1.0x 1.44x 12.4x 11.0x 20.3x

Median 90.2% 3.0% 3.4% 22.3% 1.6x 3.91x 16.5x 16.2x 22.0x






12








Valuation Metrics

Alcoholic Beverages

Anheuser-Busch InBev SA Belg. ABI:BB 80.5% 202,034$ 310,293$ 57,943$ 12.2% 1.3% 39.1% 4.4x 5.36x 13.7x 13.3x 20.9x

Carlsberg A/S Denm. CARL-A:DC 93.5% 132,344 159,321 71,493 -1.4% N/A 21.7% 1.5x 2.23x 10.3x N/A N/M

Diageo plc U.K. DGE:LN 96.6% 87,588 102,202 15,899 5.5% 3.1% 33.7% 2.3x 6.43x 19.1x 17.8x 25.4x

Heineken NV Neth. HEIA:NA 94.1% 56,734 73,241 25,318 4.4% 3.9% 24.4% 2.4x 2.89x 11.8x 11.4x 20.5x

Pernod Ricard SA Fra. RI:FP 94.7% 42,725 51,475 10,446 4.3% 3.0% 29.3% 2.8x 4.93x 16.8x 16.5x 23.4x

Constellation Brands Inc. U.S. STZ 92.5% 41,898 51,805 7,697 8.0% 7.0% 36.3% 3.5x 6.73x 18.5x 16.4x 21.9x

Brown-Forman Company U.S. BF.A 84.7% 23,556 25,873 3,248 1.2% N/A 34.5% 2.1x 7.97x 23.1x N/A N/M

Sapporo Holdings Ltd. Japan 2501:JP 75.3% 1,957 4,198 4,934 2.1% 0.4% 7.2% 6.2x 0.85x 11.8x 11.0x 21.7x

Median 93.0% 4.3% 3.1% 31.5% 2.6x 5.14x 15.3x 14.9x 21.8x

Snacks

PepsiCo, Inc. U.S. PEP 88.9% 154,361$ 177,384$ 64,038$ -1.6% 3.0% 20.4% 1.6x 2.77x 13.6x 13.1x 19.0x

Mondelez International, Inc. U.S. MDLZ 88.1% 60,478 78,234 26,247 -8.9% 2.3% 19.4% 3.4x 2.98x 15.3x 14.3x 16.4x

J&J Snack Foods Corp. U.S. JJSF 96.3% 2,851 2,610 1,143 5.6% 4.6% 14.4% 0.0x 2.28x 15.9x 15.1x 30.7x

John B. Sanfilippo & Son, Inc. U.S. JBSS 95.7% 845 940 879 2.8% 7.2% 8.4% 1.3x 1.07x 12.7x 11.1x 18.9x

Median 92.3% 0.6% 3.8% 16.9% 1.5x 2.53x 14.5x 13.7x 19.0x

Protein Processing

Tyson Foods, Inc. U.S. TSN 81.3% 25,337$ 35,159$ 39,997$ 0.6% 3.9% 10.4% 2.4x 0.88x 8.4x 8.0x 10.6x

Seaboard Corp. U.S. SEB 84.5% 4,639 4,032 5,989 -3.5% N/A 6.4% 0.0x 0.67x 10.4x N/A N/M

Sanderson Farms, Inc. U.S. SAFM 59.6% 2,401 2,074 3,437 6.4% 4.5% 14.3% 0.0x 0.60x 4.2x 6.3x 18.2x

Cal-Maine Foods, Inc. U.S. CALM 87.7% 2,230 1,956 1,334 -9.3% 12.7% 8.1% 0.0x 1.47x 18.2x 10.6x 22.0x

Median 82.9% -1.5% 4.5% 9.2% 0.0x 0.78x 9.4x 8.0x 18.2x






13








Valuation Metrics

Fruits & Vegetables

Fresh Del Monte Produce Inc. U.S. FDP 84.6% 2,172$ 2,954$ 4,160$ 1.3% 7.0% 6.0% 3.0x 0.71x 11.9x 10.0x 13.2x

Calavo Growers, Inc. U.S. CVGW 97.3% 1,689 1,710 1,091 11.2% N/A 6.6% 0.3x 1.57x 23.6x 19.4x 29.5x

Total Produce plc U.K. T7O:ID 86.4% 1,126 1,378 4,805 11.3% 2.3% 2.8% 1.1x 0.29x 10.1x 12.3x 18.2x

Seneca Foods Corp. U.S. SENEA 73.8% 212 659 1,315 -2.4% N/A 3.4% 9.9x 0.50x 14.6x N/A N/M

Median 85.5% 6.3% 4.6% 4.7% 2.1x 0.61x 13.2x 12.3x 18.2x


Givaudan SA Switz. GIVN:SW 96.8% 23,990$ 25,230$ 5,842$ 4.7% 6.9% 21.5% 0.7x 4.32x 20.1x 18.3x 27.0x

Kerry Group plc U.K. KYGA:LN 94.2% 18,556 20,209 7,360 3.4% 4.2% 14.3% 0.0x 2.75x 19.2x 17.8x 24.2x

Symrise AG Germ. SY1:GR 97.7% 11,277 12,932 3,466 12.2% 5.4% 21.0% 2.2x 3.73x 17.7x 17.3x 33.6x

International Flavors & Fragrances Inc. U.S. IFF 78.8% 9,786 11,199 3,501 3.2% 5.2% 22.5% 1.8x 3.20x 14.2x 13.8x 19.6x

Ingredion Inc. U.S. INGR 75.7% 7,997 9,266 5,848 1.0% 2.6% 18.5% 1.1x 1.58x 8.5x 8.3x 13.7x

Tate & Lyle plc U.K. TATE:LN 90.7% 3,939 4,436 3,544 5.0% 1.2% 16.8% 0.8x 1.25x 7.5x 7.8x 12.9x

Sensient Technologies Corp. U.S. SXT 84.2% 3,029 3,710 1,377 -2.0% 4.6% 19.3% 2.6x 2.69x 14.0x 13.1x 18.6x

Median 90.7% 3.4% 4.6% 19.3% 1.1x 2.75x 14.2x 13.8x 19.6x

Agribusiness

Bayer AG Germ. BAYN:GR 79.6% 101,774$ 103,443$ 51,072$ -5.4% 12.3% 23.9% 0.7x 2.03x 8.5x 8.1x 15.2x

Archer-Daniels-Midland Corp. U.S. ADM 97.9% 25,627 33,803 61,366 -9.2% 2.5% 4.0% 3.3x 0.55x 13.6x 10.4x 14.0x

The Mosaic Company U.S. MOS 93.7% 10,811 14,903 7,765 -6.5% 10.8% 17.7% 3.3x 1.92x 10.8x 8.0x 16.9x

CF Industries Holdings, Inc. U.S. CF 96.1% 10,361 17,189 4,050 -4.5% 5.5% 24.5% 3.8x 4.24x 17.3x 12.1x N/M

Bunge Limited U.S. BG 83.8% 9,825 16,899 45,314 -7.1% 2.3% 2.5% 5.5x 0.37x 14.8x 8.7x 11.5x

Darling Ingredients Inc. U.S. DAR 97.6% 3,273 5,005 3,658 -2.5% 2.3% 12.2% 3.7x 1.37x 11.2x 10.8x 25.3x

Andersons, Inc. U.S. ANDE 90.0% 968 1,900 3,470 -6.7% 4.0% 3.3% 7.9x 0.55x 16.5x 11.5x 16.9x

Median 93.7% -6.5% 4.0% 12.2% 3.7x 1.37x 13.6x 10.4x 16.0x






14


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