M&A Update | Food & Beverage

M&A activity There were 62 reported M&A transactions that closed during Q1-2018, up from the 52 transactions during the fourth quarter of 2017 (Q4-2017). Reported transactions in Q1-2018 increased 6.9 percent compared to 58 deals for the same period in 2017. The aggregate deal value of the M&A transactions with reported values was $12.8 billion during Q1-2018. This is an increase from the total deal value of $5.1 billion in Q4-2017. Additionally, we would note that quarters with peak values were driven by large individual transactions that took place during each respective period.

Table 5: Quarterly U.S. food and beverage M&A activity for transactions closed Aggregate transaction value and number of deals

0 10 20 30 40 50 60 70

$70,000

57,716

$60,000

$50,000

37,214

$40,000

$30,000

25,569

23,006

21,503

17,541

$20,000

13,986

12,804

12,631

Number of Deals

6,986

$10,000

5,149

4,428

4,067

3,324

3,073 989

$0 Aggregate Transaction Value ($MM) 3.2 Median 2.0x Q2-2014 Q3-2014 Q4-2014

Q1-2015

Q2-2015

Q3-2015

Q4-2015

Q1-2016

Q2-2016

Q3-2016

Q4-2016

Q1-2017

Q2-2017

Q3-2017

Q4-2017

Q1-2018

As detailed in Tables 6 and 7, the Q4-2017 transactions with reported deal multiples 1 had a higher median revenue multiple than the historic median; also, transactions with reported EBITDA multiples had a higher median multiple than the historic median.

Table 6: Quarterly M&A TEV/revenue multiples 1

Table 7: Quarterly M&A TEV/EBITDA multiples 1

Median 15.1x

23.7

22.6

3.1

2.9

20.1

2.7

2.6

17.7 17.9

2.2

15.7

2.1 1.9

2.0 2.1 1.9

14.3 15.2

1.9

11.8 12.2

1.5

1.5 1.4

10.0

9.2

8.8

8.1

1.0

0.0

0.0

Q2-2014

Q3-2014

Q4-2014

Q1-2015

Q2-2015

Q3-2015

Q4-2015

Q1-2016

Q2-2016

Q3-2016

Q4-2016

Q1-2017

Q2-2017

Q3-2017

Q4-2017

Q1-2018

Q2-2014

Q3-2014

Q4-2014

Q1-2015

Q2-2015

Q3-2015

Q4-2015

Q1-2016

Q2-2016

Q3-2016

Q4-2016

Q1-2017

Q2-2017

Q3-2017

Q4-2017

Q1-2018

Source: S&P Capital IQ and Baker Tilly Capital research (April 2018) 1 Six revenue multiples and four EBITDA multiples reported

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