Healthy Lifestyle and Craft Beer Quarterly Report

Market Analysis
Spring 2015

Healthy Lifestyle and Craft Beer Quarterly Report

Non-Durables • Natural, Organic & Functional Food & Beverage • Natural Living (Beauty, Household & Pet) • Supplements Wholesalers • Supplements Direct-to-Consumer
• Health & Wellness Retailers/Distributors
Craft Products • Craft Beer & Hard Cider

Fitness/Weight Management • Fitness Centers • Weight Management

Kurt M. Roth Managing Director +1.312.609.4689 [email protected]

Owen L. Hart Managing Director +1.415.627.3273 [email protected]

David M. Silver Managing Director Head of European Investment Banking +44.207.667.8216 [email protected]

Satoshi Matsumoto Managing Director Director of Japan M&A +1.312.609.5446 [email protected]

Table of Contents

Page

• Robert W. Baird & Co. Healthy Lifestyle and Craft Beer Practice ........................1 • Healthy Lifestyle and Craft Beer Stock Activity ..................................................2 • Quarterly Transaction Update ............................................................................4 • Addressable Markets ..........................................................................................8 • Public Company Performance...........................................................................14 • Same-Store Sales Performance ........................................................................20 • Equity Capital Markets Overview ......................................................................21 • Recently Priced IPOs ........................................................................................22 • Baird’s Healthy Lifestyle and Craft Beer Transaction Experience......................23 • Global Investment Banking Contact List...........................................................24

The following report has been prepared by the Global Investment Banking Department of Robert W. Baird & Co. This report is an overview and analysis of industry and consolidation trends and is not intended to provide investment recommendations on any specific industry or company. A complete listing of all companies covered by Baird U.S. Equity Research and applicable research disclosures can be accessed at . You can also call 1-800-792-2473 or write: Robert W. Baird, Equity Research, 24th Floor, 777 E. Wisconsin Avenue, Milwaukee, WI 53202.
Robert W. Baird & Co. (“Baird”) is a leading middle market focused investment bank serving the M&A and equity financing needs of our clients throughout the U.S., Europe and Asia. Since 2008, we have advised on 404 M&A transactions totaling $89 billion and have served as an underwriter on 547 equity offerings totaling more than $172 billion in raised capital.
Baird’s balanced buy- and sell-side practice provides expertise for public and private companies, while our dedicated financial sponsor coverage further expands opportunities and financing resources for our clients. Through close coordination between our U.S., European and Asian bankers, we work to optimize opportunities and results for clients in the international marketplace. Approximately one-third of our M&A activity over the past five years has involved international transactions.

Please refer to Appendix – Disclaimers and Other Disclosures on page 25.

Robert W. Baird & Co. Healthy Lifestyle and Craft Beer Practice

AN EXPERIENCED, PROVEN AND TRUSTED ADVISOR

Baird’s Global Investment Banking team possesses highly relevant industry expertise and significant experience in the Healthy Lifestyle sector.
• We have in-depth advisory and equity origination capabilities in the Healthy Lifestyle space:
– Multiple high-profile assignments over the last decade
– Unique knowledge of consumer growth investors
– Expert insight into current “hot button” issues
• Deep industry knowledge and proprietary transaction and benchmarking database • Established relationships with, and access to, key industry and client decision makers • Significant senior resources dedicated to industry and execution • Focus on long-term partnerships and senior level attention

transaction

Baird Healthy Lifestyle Practice Contacts

Kurt M. Roth Managing Director +1.312.609.4689 [email protected]

Owen L. Hart Managing Director +1.415.627.3273 [email protected]

David M. Silver Managing Director Head of European Investment Banking +44.207.667.8216 [email protected]

Satoshi Matsumoto Managing Director +1.312.609.5446 [email protected]

Baird is One of the Most Active Advisors and Underwriters to the Consumer Sector

Baird’s Consumer investment banking team has a proven track record of delivering outstanding results for our clients. We offer comprehensive strategic advisory and capital market services across several consumer sectors. Our transaction experience, frequent dialogue with industry participants and robust deal flow provide us with unique insight into the sectors we serve.

• Since the start of 2010, completed 111 consumer
M&A and public equity transactions worth $28 billion
• Market maker in over 500 Consumer stocks
• 5 Consumer focused research analysts covering 82
companies

Middle-Market Deal Award Nine consecutive years
2005 - 2013

“Most Trusted” Research
Eleven consecutive years 2004 - 2014(1)

Adviser of the Year Awards 2008 - 2011

“Wisconsin Specialty Protein sale to Omega Protein” Nutrition Business Journal’s Top Deal of the Year

January 2014

_____________________ (1) Baird ranked No.1 for “Most Trusted” Research for the eleventh consecutive year in the 2014 Greenwich Associates Surveys (2004 - 2014). Surveys conducted with U.S.
small-cap and mid-cap fund managers.

Robert W. Baird & Co.

1

Healthy Lifestyle and Craft Beer Stock Activity

Rising Valuations Supportive of Increased Transaction Activity

LTM Stock Performance

120% 115% 110%

HLCB

S&P 500

12.3% 10.4%

105%

100%

95%

90% Mar-14

Apr-14

May-14 Jun-14

Jul-14

Aug-14 Sep-14

Oct-14

Nov-14

_____________________ Source: Capital IQ. LTM as of March 31, 2015. See footnote at bottom of page for list of companies that comprise Healthy Lifestyle and Craft Beer (HLCB) index.

Dec-14

Jan-15

Feb-15

Mar-15

Index

Recent Stock Performance

1-Month % Change

3-Month % Change

6-Month % Change

S&P 500

(1.7%)

0.4%

4.8%

Healthy Lifestyle and Craft Beer

2.9%

4.6%

10.8%

Natural, Organic & Functional Food & Beverage

1.3%

12.6%

15.2%

Supplements Wholesalers

16.1%

4.1%

(1.2%)

Supplements Direct-to-Consumer

6.4%

(2.6%)

5.2%

Health & Wellness Retailers/Distributors

0.1%

0.6%

24.9%

Craft Products

3.9%

(3.4%)

7.4%

Fitness Centers

2.9%

9.4%

14.3%

Weight Management

(3.1%)

(26.3%)

(22.6%)

Recent Healthy Lifestyle and Craft Beer IPOs

2.9%

8.4%

22.9%

_____________________ Source: Capital IQ. LTM as of March 31, 2015. Natural, Organic & Functional Food & Beverage index consists of BDBD, FRPT, HAIN, TSE:2220, LWAY, MJN, MNST, SET:ICHI, TSX:SOY and WWAV. VMS Wholesalers index consists of ENXTAM:DSM, NUTR, OME and PRGO. VMS Direct-to-Consumer index consists of HLF, LFVN, NATR, NUS, RELV and USNA. Health & Wellness Retailers/Distributors index consists of TFM, GNC, NGVC, SFM, UNFI, VSI and WFM. Craft Products index consists of BREW and SAM. Fitness Centers index consists of ASX:AAD, TSE:4801, BMV:SPORT S, LTM, BSE:533200 and CLUB. Weight Management index consists of MED, NTRI and WTW. Healthy Lifestyle and Craft Beer index consists of all companies listed directly above. Recent Healthy Lifestyle and Craft Beer IPOs index consists of SFM, WWAV, NGVC, FRPT, GNC and TFM.

1-Year % Change
10.4% 12.3% 28.4% (9.8%) (17.8%) 1.8% (0.7%) 23.6% (10.1%) 7.5%

Robert W. Baird & Co.

2

Healthy Lifestyle and Craft Beer Stock Activity

Recent Valuations

Index

LTM Revenue

Healthy Lifestyle and Craft Beer

1.4x

Natural, Organic & Functional Food & Beverage

3.0x

Supplements Wholesalers

1.1x

Supplements Direct-to-Consumer

0.8x

Health & Wellness Retailers/Distributors

1.2x

Craft Products

2.6x

Fitness Centers

2.0x

Weight Management

1.4x

Recent Healthy Lifestyle and Craft Beer IPOs

2.0x

_____________________ Source: Capital IQ. Figures as of March 31, 2015. See “Recent Stock Performance” table on page 2 for list of companies that comprise each index.

Median Multiple LTM EBITDA
11.5x 19.3x 7.7x 8.4x 13.4x 19.1x 10.2x 7.3x 14.9x

2015 P/E
21.5x 31.8x 16.1x 15.3x 24.4x 35.2x 19.1x 16.3x 40.1x

Top 10 Stock Price Gainers in Q1 2015

50% 40.4% 40%
30%
20%

38.7%

29.5%

28.7%

27.7%

26.7%

25.3%

23.4%

22.8%

15.4%

10%

0%

HL Corp

Nu Skin Omega Protein Talwalkars Monster

The

Life Time Johnson Central Sports Lifeway Foods

(Shenzhen) Enterprises Corporation Better Value Beverage WhiteWave Fitness, Inc. Health Tech Co.,Ltd.

Inc.

Inc.

Fitness Limited Corporation Foods

Co., Ltd.

Company

Top 10 Stock Price Losers in Q1 2015

0% (10%) (20%) (30%) (40%) (50%) (60%) (70%) (80%)

(39.2% ) (28.5% )

(15.3% )

(71.9% )
Weight Watchers International,
Inc.

Lifevantage Ardent Leisure Grupo Sports Corporation Group World, S.A.B.
de C.V.

_____________________ Source: Capital IQ. YTD as of March 31, 2015.

(15.2% )
Vitamin Shoppe, Inc.

(13.8% )
Boulder Brands, Inc.

(10.8% )

(10.8% )

(10.7% )

SunOpta Inc. Nature's Medifast Inc. Sunshine
Products Inc.

(8.9% )
Koninklijke DSM N.V.

Robert W. Baird & Co.

3

Quarterly Transaction Update

Pages 4-6 list M&A transactions, private placements and equity offerings announced during Q1 2015 for categories within the scope of this report. The Healthy Lifestyle and Craft Beer sectors registered significant levels of M&A activity on a global basis in the first quarter. We have identified 34 change-of-control M&A transactions announced during the quarter; this level was slightly below the quarterly average of 37 over the past two years.

Global Healthy Lifestyle M&A Activity by Quarter

Deal Count

Average Deal Count

60

50

48

Average = 37

45

40

36

34

37

32

34

30

29

20

10

0 Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

Q3-14

Q4-14

Q1-15

_____________________ Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis. Includes deals in the following segments: Natural, Organic & Functional Food and Beverages; Natural Living products; VMS Wholesalers and Direct-to-Consumer platforms; Health & Wellness Specialty Retailers and Distributors; Craft Beer & Hard Cider; Weight Management; and Fitness Centers

Global Healthy Lifestyle and Craft Beer M&A Activity in Q1

Date Announced

Target Name / Nationality

Segment

Target Description

Acquiror

Deal Value ($mil)

Commentary

30-Mar-15 Total Fitness / U.K.

Fitness Centers

30-Mar-15 Angel's Share Brands / U.S. Craft Products

29-Mar-15 Perrin Brewing / U.S.

Craft Products

Operator of health clubs
Maker of bourbon whiskey
Brewer of beer

Northedge Capital Partners; RooGreen Ventures; Company Management Bacardi
Oskar Blues Brewery

25-Mar-15 Club Pilates / U.S. 16-Mar-15 MonaVie / U.S.

Fitness Centers
Supplements Direct-to-Consumer

Operator and franchisor of Pilates clubs
Maker of nutritional products

LAG Fit Jeunesse Global

16-Mar-15 Life Time Fitness / U.S. 11-Mar-15 My Goodness / U.K. 9-Mar-15 Brand Aromatics / U.S.

Fitness Centers
Supplements Wholesale
Natural, Organic & Functional

Operator of fitness clubs
Producer of sports nutrition and protein drinks/snacks
Maker of marinades and broths

Leonard Green & Partners; TPG Capital; LNK Partners
Aurivo Co-operative Society Limited
McCormick & Company

9-Mar-15 9-Mar-15

Natural American Pet Products and Natural Life Pet Products / U.S.
Full Sail Brewing / U.S.

Natural Living Craft Products

5-Mar-15 Ritual Wellness / U.S.

Natural, Organic & Functional

__________________ Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis.

Producer of pet foods Arthur Dogswell

Brewer of beer
Producer of organic juices

Encore Consumer Capital; Oregon Craft Brewers
Project Juice

4,071.8 63.0 -

Private equity firms Northedge and RooGreen joined the executive management of Total Fitness in acquiring the business, which has 17 locations in northern England
The acquisition allows Bacardi to expand in the super-premium spirits segment by entering the bourbon category of the North American whiskey sector
The acquisition by Fireman Capital-backed Oskar Blues, whose products are distributed in 42 states, will help Michigan-based Perrin build its geographic presence
LAG Fit, a firm specializing in acquiring and expanding wellness concepts, acquired 35studio chain Club Pilates
Following the acquisition, Jeunesse, a healthy living oriented direct selling company, has a network of 4 million distributors in over 100 countries
The pending deal’s share price represents a 73% premium to the closing price on August 22, 2014, when Life Time announced it was considering strategic options
The deal provides Ireland-based Aurivo a significant position in the expanding sports nutrition and protein drinks/snacks market in the U.K. and Ireland
Brand Aromatics, with $28 million in 2014 sales, enhances the breadth of value-added products in McCormick’s offering for packaged food companies and restaurants
The acquisition brings vertical integration in the premium pet treat space to natural pet food producer Arthur Dogswell
Encore Consumer Capital acquired employee owned Full Sail, which brewed 115,000 barrels in 2014, through its newly formed investment group Oregon Craft Brewers
The combined company seeks to source from more farms due to its enhanced scale

Robert W. Baird & Co.

4

Quarterly Transaction Update

Global Healthy Lifestyle and Craft Beer M&A Activity in Q1 (continued)

Date Announced

Target Name / Nationality

Segment

Target Description

Acquiror

Deal Value ($mil)

Commentary

4-Mar-15 2-Mar-15 28-Feb-15
20-Feb-15

Empire Kosher Poultry (remaining 80% stake) / U.S. Citrusource / U.S.
Two Virgin Active Gyms in Glamorgan and Middleton / U.K. Belvedere International / Canada

Natural, Organic & Functional Natural, Organic & Functional Fitness Centers
Natural Living

Producer of kosher poultry products
Supplier of orange juice and citrus products
Operator of two fitness centers

The Hain Celestial Group
SunOpta Grains and Foods
LaSalle Investment Management

Producer of health and beauty care products

The Hain Celestial Group

17-Feb-15

Healthy Food Ingredients / U.S.

16-Feb-15 Enjoy Life Foods / U.S.

Natural, Organic & Functional
Natural, Organic & Functional

Supplier of organic food ingredients

Hesco

Producer of allergen free snacks

Mondelez International

11-Feb-15 JackedPack / U.S.

Supplements Direct-to-Consumer

Online retailer of health supplements

IdeoClick

9-Feb-15 Nutricap Labs / U.S.

Supplements Wholesale

Manufacturer of nutraceuticals

Twinlab Consolidated Holdings, Inc.

9-Feb-15

Native Remedies Inc., Certain Assets / U.S.

Supplements Direct-to-Consumer

Marketer of herbal supplements

Silver Star Brands (Blyth, Inc.)

4-Feb-15

Yellow Chips BV (51%) / Netherlands

Natural, Organic & Functional

Producer of vegetable and organic chips

Diamond Foods

30-Jan-15 Eos Fitness Holdings / U.S.

Fitness Centers

Operator of a chain of fitness centers

Bruckmann, Rosser, Sherrill; Performance Equity Management; Stellus Capital

29-Jan-15 Krave Pure Foods / U.S.

Natural, Organic & Functional

Producer of meat-based snack items

The Hershey Company

27-Jan-15

17 Planet Fitness locations in New York / U.S.

Fitness Centers

23-Jan-15

Elysian Brewing Company / U.S.

20-Jan-15 Salix Animal Health / U.S.

Craft Products Natural Living

Operator of fitness clubs

Exaltare Capital Partners; Brightwood Capital Advisors

Brewer of beer

Anheuser-Busch InBev

Producer and distributor of dog chews, treats and snacks

Spectrum Brands Holdings

16-Jan-15 Planter's S.p.A. / Italy 14-Jan-15 XS Energy / U.S.

Natural Living
Natural, Organic & Functional

Maker of herbal products and natural cosmetics
Producer of sugar-free energy drinks

Investor group Amway

9-Jan-15

Nutritional Laboratories International / U.S.

Supplements Wholesale

Producer of nutritional and dietary supplements

Elite One Source Nutrisciences

8-Jan-15 5-Jan-15

Freedom Fitness Milton Keynes / U.K.

Fitness Centers

Sun Orchard (majority stake) / U.S.

Natural, Organic & Functional

Operator of a fitness club in Warwick, U.K.
Provider of fruit juices and beverage products

Wealden Leisure
Centre Partners Management

__________________ Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis.

57.6 13.3 13.9
12.0 -
-
-
-
-

Empire Kosher, with $100+ million in 2014 sales, expands Hain’s farm to table offerings
The deal is aligned with SunOpta’s strategy to grow its healthy beverages portfolio
LaSalle acquired the two Virgin Active fitness centers to capitalize on the growing interest in health and fitness in the U.K.
Hain established a personal care base in Canada with the acquisition of Belvedere, whose Live Clean brand of natural products fueled annual sales of $25 million
Specialty grain producer Hesco acquired Healthy Food Ingredients in order to expand into specialty ingredients for organic foods
Enjoy Life Foods fits the strategy of Mondelez to drive growth in snacking by expanding its portfolio through allergyfriendly 'free from' offerings
E-commerce company IdeoClick acquired JackedPack, a provider of nutrition supplement samples, to expand its presence in nutrition supplements
The acquisition is designed to provide more product options and services for the customers of Nutricap and Twinlab
The acquisition complements the direct-toconsumer portfolio of Silver Star and enhances its e-commerce market share
Yellow Chips allows Diamond Foods to compete more effectively in the high-growth vegetable chip category in Europe
Eos Fitness, a chain of 16 clubs in the southwest U.S., was acquired by a private equity group that includes BRS, which brings fitness center expertise through prior ownership of Town Sports International
The acquisition will help Hershey enter the all-natural meat snacks market and expand in the broader snacks space. Krave has trailing full-year sales of about $35 million
Private equity firms Exaltare and Brightwood acquired 17 Planet Fitness sites in New York from a franchisee, bringing their ownership of Planet Fitness locations to 52 franchises
The proposed acquisition fits the strategy of AB InBev, which has acquired two other craft brewers since the start of 2014
With annual revenue of about $100 million, Salix enables Spectrum’s pet supplies unit to expand its dog treats business, leverage Salix’s enzyme technology and seek new opportunities in Europe and Latin America
Italy-based private equity firm DGPA SGR sold Planter’s to an unspecified investor group
Amway, the exclusive distributor of XS Energy since 2003, will expand the brand’s geographic reach, including in Southeast Asia. XS Energy is distributed in 38 countries with annual sales of $150 million
Elite One Source, majority-owned by Ampersand Capital Partners, acquired NLI from Praesidian Capital as part of its strategy to become the leading contract maker of nutritional and dietary supplements
U.K.-based Wealden Leisure, which operates 30+ Freedom Leisure fitness centers, added to its U.K. portfolio with this acquisition
Sun Orchard brings a premium juice platform to Centre Partners, which intends to fuel growth through new product lines and channels plus select acquisitions

Robert W. Baird & Co.

5

Quarterly Transaction Update

Date Announced
27-Mar-15
23-Mar-15 19-Mar-15 16-Mar-15 12-Mar-15 11-Mar-15
10-Mar-15 6-Mar-15 2-Mar-15
27-Feb-15
20-Feb-15 12-Feb-15 9-Feb-15 6-Feb-15 1-Feb-15 29-Jan-15 29-Jan-15 22-Jan-15 20-Jan-15 20-Jan-15
14-Jan-15 12-Jan-15 8-Jan-15 7-Jan-15

Global Healthy Lifestyle and Craft Beer Private Placements in Q1

Target Name / Nationality

Segment

Target Description

Investment Amount ($mil)

Type

Investor(s)

Use of Proceeds

The Pulse Beverage Company / U.S.

Natural, Organic & Functional

Smari Organics / U.S. Fireman's Brew / U.S.

Natural, Organic & Functional
Craft Products

Five Star Organics / U.S.
Camden Town Brewery / U.K. Nature Cell / U.S.

Natural, Organic & Functional Craft Products
Natural, Organic & Functional

Windy Hill Spirits / U.S.
Payette Brewing Company / U.S.
Bhakti Chai / U.S.

Craft Products Craft Products
Natural, Organic & Functional

Columbia Phyto Technology / U.S.

Supplements Wholesale

True Drinks Holdings / U.S. BAI Brands / U.S. Pangea Naturals / U.S.

Natural, Organic & Functional
Natural, Organic & Functional
Natural Living

Biena / U.S.
Wisconsin Brewing Co / U.S. Bowen Hayward Group / U.S. Westbourne / U.S.
Synergy Strips Corp. / U.S.
American Botanicals / U.S.
KonaRed / U.S.

Natural, Organic & Functional Craft Products Craft Products
Natural, Organic & Functional Supplements Wholesale Supplements Wholesale Natural, Organic & Functional

New Oberpfalz Brewing / U.S.
Wright Leisure Limited / U.K.

Craft Products Fitness Centers

Sonoma Beverage Works / U.S.
Soylent / U.S.

Craft Products
Weight Management

Producer of healthy beverages
Maker of organic Icelandic yogurt Producer of beer and coffee Maker of organic candy bars Brewer of beer
Producer of health drinks and organic foods Maker of whiskeys Brewer of beer
Provider of ready-todrink and bottled tea and coffee products Producer of organic and conventional powders Producer of healthy beverages Producer of healthy beverages Maker of skincare products Maker of chickpea snacks Brewer of beer Brewer of beer
Producer of organic popcorn Producer of orally dissolving film strips Processor of herbs, roots and barks Maker of beverages and nutritional products Brewer of beer
Operator of a chain of gyms Maker of flavored ciders Maker of food replacement products

$1.0
3.8 5.0 4.0 2.7 2.0
5.0 1.3 4.9
1.5
4.3 15.0
1.5 1.5 2.0 1.2 4.0 6.0 2.7 1.0
1.0 7.6 1.2 20.0

Equity
Equity Equity Equity Equity Debt

Private investors
Private investors Private investors Private investors Private investors Private investors

Expand its operations into Mexico and Canada, and support working capital growth Working capital
-
-
Fund growth and return manufacturing to the U.K. Operations

Debt Equity Equity
Debt

Private investors Private investors
Colorado Impact Fund and private investors Private investors

-
Manufacturing facility in Colorado, sales and marketing, and national distribution -

Equity
Equity
Equity
Equity
Equity Debt & Equity Equity
Debt & Equity Equity
Debt

Toba Capital
Private investors
Private investors
Private investors
Private investors Private investors
Private investors
Knight Therapeutics Advantage Capital Partners Group 10 Holdings

Working capital
Working capital
-
Working capital and capex -
-
Acquisition of the Focus Factor business Fund growth
-

Equity
Equity
Equity/ Debt Equity

Private investors
Business Growth Fund plc Private investors
Andreessen Horowitz; Index Ventures; Lerer Hippeau Ventures

Pay executives
Fund growth
-
Expand manufacturing, shipping, product development, biotechnology research and resource procurement

Global Healthy Lifestyle and Craft Beer Equity Offerings in Q1

Offer Date 4-Mar-15

Issuer Name / Nationality
Sprouts Farmers Market / U.S.

Segment
Health & Wellness Retail

15-Feb-15 By-health Co. / China

Supplements Wholesale

_____________________ Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis.

Issuer
Description
Retailer of fresh, natural and organic food
Maker of nutritional supplements

Offering Type

Gross Offering Amount ($mil)

Follow-on

559.4

-

Use of Proceeds

Follow-on

298.9

General corporate purposes and working capital

Robert W. Baird & Co.

6

Quarterly Transaction Update

Selected LTM Healthy Lifestyle and Craft Beer M&A Activity

Date Announced

Target

Target Nationality

Target Description

Acquiror

Deal Value ($mil)

16-Mar-15 Life Time Fitness

5-Dec-14 McCleskey Mills

21-Nov-14 26-Oct-14
15-Oct-14 9-Oct-14 24-Sep-14 17-Sep-14

TIPNESS Chiquita Brands International Penford New Britain Palm Oil Green Eagle Holdings So Delicious Dairy Free

12-Sep-14 Isopure

8-Sep-14 Annie's

7-Jul-14 WILD Flavors

4-Jul-14 2-Jul-14

Apple & Eve Vitacost.com

30-Jun-14 11-Jun-14 14-Apr-14

Flagstone Foods Healthy Directions, LLC DIANA S.A.S.

10-Apr-14 Deoleo SA

United States
United States
Japan United States
United States Papua New Guinea Singapore United States
United States
United States
Switzerland
United States United States
United States United States France
Spain

Operator of fitness clubs
Provider of shelled peanuts and seed peanuts Operator of fitness clubs Processor of produce
Maker of natural ingredient systems Producer of palm oil Producer of palm oil Producer of dairy-free frozen desserts Producer of protein powder and drinks Maker of natural and organic food products Maker of natural ingredients, flavors and colors Branded juice manufacturer Online retailer of health and wellness products Producer of snacks and dried fruits Maker of nutritional supplements Nutritional and natural-ingredients foods producer Producer of olive oil, vinegars, sauces and olives

Leonard Green & Partners; TPG Capital; LNK Partners Olam International
Nippon Television Holdings Banco Safra S.A. and Sucocitrico Cutrale Ingredion Sime Darby Plantation PT. BW Plantation, Tbk The WhiteWave Foods Company Glanbia
General Mills
Archer Daniels Midland
Lassonde Industries The Kroger Co.
TreeHouse Foods Helen of Troy Symrise AG
CVC Capital Partners

_____________________ Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis. List includes deals with reported values of at least $100 million and a disclosed valuation multiple.

$4,071.8
176.0
203.0 1,321.7
338.5 2,010.8
880.9 195.0
153.0
823.0
3,096.5
147.9 281.2
875.0 195.0 1,796.2
1,258.1
Mean Median

EV / LTM

Revenue 3.2x

EBITDA 10.9x

-

6.0

0.7

-

0.4

12.6

0.8

12.4

3.4

12.6

6.1

-

1.7

-

2.1

-

4.0

38.6

2.3

-

-

9.7

0.6

-

1.2

16.1

1.3

8.0

2.9

14.0

1.2

12.5

2.0x 1.5x

14.0x 12.5x

Robert W. Baird & Co.

7

Addressable Markets

Natural, Organic & Functional Food & Beverage Market
The Natural, Organic & Functional food and beverage market includes food and beverages classified as natural, organic or functional by the Nutrition Business Journal. Natural foods and beverages typically focus on the health benefits derived from natural ingredients. Organic food and beverages generally are produced without chemicals, pesticides, herbicides, hormones, antibiotics or genetically modified feed crops. Functional foods and beverages are designed to provide health benefits via the inclusion or combination of certain ingredients.
The U.S. market for Natural, Organic and Functional food and beverage items increased to approximately $104 billion in 2013 from approximately $95 billion in 2012, representing growth of nearly 10% versus an increase of around 3% for the entire food and beverage market. Natural, Organic and Functional food and beverage sales accounted for 14% of total U.S. food sales in 2013, up from just over 11% in 2008.
U.S. Natural, Organic & Functional Retail Sales

Year-over-year growth

$ in billions

2007-2013 CAGR: 7.7% 2013-2019 CAGR: 9.1%

$174.8

$175

$161.2

10%

$148.3

$150 $124.7 $136.2 8%

$125 $103.9 $114.0

$100

$72.0 $74.8 $79.6 $86.6 $94.8

6%

$75 $66.7

4%

$50 $25 2%

$0

0%

2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E

_____________________

Source: Nutrition Business Journal, Sterling-Rice Group.

Breakdown of 2013 Sector Sales by Category and Channel

Natural Sales by Category

Packaged & Condiments

Prepared

4%

Foods

15%

Dairy 14%
Fruit & Vegetables
11%

Organic Sales by Category

Packaged & Condiments Dairy

Prepared

4%

16%

Foods

12%

Snack Foods

5%

Functional Category Sales by Category

Packaged & Other Dairy Prepared 1% 5% Foods 8%
Snack Foods 8%

Breads & Grains 13%

Snack Foods 8%

Breads & Grains 15%

Beverages 23%

Meat, Fish & Poultry 10%

Natural Sales by Channel

Other 3%

Retail - Health & Wellness
32%

Beverages 11%

Meat, Fish, & Poultry 3% Breads & Grains 10%

Fruit & Vegetables
39%

Organic Sales by Channel

Other, 6%

Retail - Health & Wellness,
44%

Beverages 65%

Functional Sales by Channel

Other 1%

Retail - Health & Wellness
10% Internet 1%

Retail - Mass 63%

Internet 2%

Retail - Mass, 46%

Internet, 3%

Retail - Mass 88%

_____________________ Source: Nutrition Business Journal, Sterling-Rice Group.

Robert W. Baird & Co.

8