RubinBrown Food & Beverage Update 2015

Public Equity Markets: Food & Beverage Valuation Multiples

Middle Market Exhibiting Large Swings in Valuation Multiples Valuation multiples (i.e., EV/EBITDA) for the S&P Food & Beverage (F&B) Index expanded approximately 4.0% over the last 18 months, from 10.6x LTM EBITDA on January 1, 2014 to 11.0x by June 30, 2015, and ranged from 10.1x to 11.7x over the period. While multiples for the F&B Index were generally higher than the S&P 500 over the last 18 months, the S&P 500 actually saw slightly higher multiple expansion, rising 4.9% from 9.9x LTM EBITDA on January 1, 2014 to 10.4x by June 30, 2015. Both the S&P 500 and F&B indices traded at lower multiples relative to the Consumer Staples index over the same period. Looking at the industry’s middle market companies, the valuation multiples varied widely by subsector. The ingredients subsector, for example, exhibited a considerable decline in valuation multiples during much of 2014 (from 28.0x on January 1, 2014 to 23.6x on December 31, 2014), before increasing sharply in the first half of 2015 (from 23.6x to 28.5x by June 30, 2015). The beverage subsector, on the other hand, saw multiples contract 18.1% between January 1, 2014 and June 30, 2015, while the food production subsector saw EV/EBITDA multiples expand 8.4% over the same period.

EV/EBITDA (LTM) – Indices

EV/EBITDA (LTM) – Subsectors

5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 40.0x

5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 40.0x

S&P 500 Index Food Production Companies BeverageCompanies Ingredients Companies

S&P 500 Index S&P Food & Beverage Select Industry Index S&P 500 Consumer Staples Sector Index

28.5x

15.3x 14.9x

10.4x 11.0x 12.8x

10.4x

Source: S&P Capital IQ

Source: S&P Capital IQ

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Food & Beverage Industry Sector: 2015 Mid-Year Update

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