RubinBrown Food & Beverage Mid-Year Review 2014

M&A Activity Overview: Buyer Landscape

Strategic Buyers Continue to Dominate Consolidation within the food and beverage industry will continue to drive strategic acquisitions, especially as favorable market conditions (i.e., low interest rates) and idle cash stockpiles promote deal activity. While many industries experience growth via product or technology innovation, growth in the food and beverage industry comes almost exclusively from adding new offerings. The quickest, and often most efficient, way for industry participants to grow revenue and thus market share is through mergers and acquisitions. The growth through M&A industry dynamic is compounded by an influx of companies divesting noncore or underperforming business units as they seek to improve performance. As such, the industry has seen a widespread push by companies to refine and realign their holdings, which has flooded the market with assets for sale. As shown in the chart to the right, strategic buyers once again made dominated the majority of the acquisitions during the first half of 2014, accounting for approximately 81.5% of all d l ea s. The following page highlights some of the more significant transactions that closed and/or were announced during the first half of 2014

Strategic vs. Financial Deals

130 140 150 160 100 110 120

12

9

4

11

6 4

5

11 14

12

8 6

11

11 12

70 80 90 10 20 30 40 50 60

12 10

3

8

11

131

118

# of Deals

102

94

90

88

82

75

72

71

-

Q1 2012 Q2 2014 Strategic Buyer Financial Buyer Anonymous Buyer Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

Source: S&P Capital IQ Reflects all closed Food & Beverage transactions, regardless of size.

Food & Beverage Sector: 2014 Mid-Year Update

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