M&A Update | Food & Beverage

Major U.S. indexes The first quarter of 2018 (Q1-2018) showed negative performance for the broader U.S. equity market, as the S&P, DJIA and NASDAQ closed down 3.4 percent, 3.9 percent and 0.8 percent, respectively, for the quarter. In the LTM period ending March 29, the S&P, DJIA and NASDAQ closed up 11.5 percent, 15.4 percent and 17.6 percent, respectively. Food and beverage relative performance As of March 29, 2018, four of the five food and beverage segments exhibited decreases in market performance on a trailing 12-month basis. These decreases were largely attributable to uncertainty in public equity markets and legislative actions related to the revision of the U.S. tax code. The beverage segment performed the best of the five food and beverage segments. This segment exhibited stock gains of 3.3 percent, lagging the strong performance of the S&P 500 index’s 11.5 percent increase during the observed period.

Table 1: Food and beverage relative market performance

-20.00% -15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

11.5%

-3.2% -7.1% 3.3% -0.4%

-12.6%

Mar-30-2017

Jun-30-2017

Sep-30-2017

Dec-31-2017

S&P 500 (^SPX)

Branded Packaged Goods

Natural / Organic

Beverage

Snack

Agribusiness

Table 2: Indexed market performance by sector

% Change

Median EV/ LTM

Industry Sector

3 Months 12 Months Revenue EBITDA

Branded Packaged Goods

(8.5%) (13.9%) (3.0%) (6.4%)

(12.6%) (7.1%)

2.5x 0.9x 3.8x 2.7x 1.3x

11.7x 14.2x 16.0x 14.4x 11.2x

Natural / Organic

Beverage

3.3%

Source: S&P Capital IQ and Baker Tilly Capital research (April 2018) LTM as of March 29, 2018 EV = Enterprise value

Snack

(3.2%) (0.4%)

Agribusiness

0.1%

1