Food and Beverage
Food and Beverage
Food and Beverage
Industry Insights
Fall 2023

Executive Summary
Executive Summary
Executive Summary
Executive Summary
Executive Summary

TTM = Trailing 12 months.

283 food and beverage deals announced
in TTM September 2023

84% were completed by privately ownedbuyers

78% were strategic transactions

2

M&A Market Overview
Overview
The food and beverage space saw 59 deals completed in Q3 2023, which is the lowest transaction count in the space since Q2 2020. For thetrailing twelve months (TTM) ending September 30, 2023, 283 deals were announced in the space, 39 fewer transactions compared to the prior
TTM period. Overall, deal activity decreased year over year by 17%; and 34% quarter over quarter. The decrease in transaction activity can largely
be explained by the lagging effect of business owners postponing sale processes—most attributed to the volatility in interest rates.
Q3 2023 saw several significant North American deals in the alcoholic beverages and general categories. Notable transactions within these areas
include Campbell Soup Company’s proposal to acquire Sovos Brands and Tilray Brands’ acquisition of Anheuser-Busch Companies’ assets. The
alcoholic beverages, general, confectionery/snacks and protein producer categories were the most active in terms of deal volume, representing 63%
of total transactions in the quarter.
M&A activity in the food and beverage sector in TTM September 2023 remains predominantly driven by strategic buyers (including companies
primarily owned by private equity investors), with strategic transactions representing 78% of total deal volume. Of the 283 deals announced over
the year, 238 (84%) were completed by privately owned buyers.
In Q3 2023, deal activity declined in the food and beverage industry with transaction volumes near pandemic lows. Although interest rates hikes
seem to have tapered off, the high-rate environment has decreased buyer leverage leading to lower valuations. Companies are moving away fromexpansion prospects and have shifted to driving efficiencies in core operations. Similarly, investors have trended away from high-growth
opportunities in favor of businesses with consistent and stable cash flows. As global inflation persists, companies have implemented hedging
strategies to manage pricing on the supply of raw materials. Corporations and private equity funds continue to sit on large cash balances, ready todeploy for cash flow generating assets.

Source: S&P Capital IQ as of September 30, 2023.
Note: M&A deal count is defined by a list of subsectors viewed as the best representation of the industry.

3

M&A Market Overview—Cont’d
Number of Announced Deals (as of September 30, 2023)

By Number of Announced Deals(TTM September 30, 2023)

99999492878080939785857982847461716865

Strategic78%

89

Strategic vs.
Financial
Buyer

7362

Financial
22%

5956

Private84%

Public vs.
Private
Buyer
Q4
2017

Q1

Q2

Q3

2018

Q4

Q1

Q2

Q3

2019

Q4

Q1

Q2

Q3

Q4

Q1

Q22020Note: Includes food and beverage sector deals where the target was based in North America.
Source: S&P Capital IQ. Transactions with more than 50% of the company acquired are included in the analysis.

Q3

2021

Q4

Q1

Q2

Q3

2022

Q4

Q1

Q22023

Q3

Public16%

4Select Recent Transactions
The J. M. Smucker Company (NYSE:SJM) Agreedto Acquire Hostess Brands Inc. (NASDAQ:TWNK)Campbell Soup Company (NYSE:CPB) Agreed toAcquire Sovos Brands Inc. (NASDAQ:SOVO)

On September 11, 2023, Hostess Brands entered into an agreement with The J.M.
Smucker Co. to acquire all of the outstanding shares of Hostess Brands in a cash andstock transaction valued at $34.25 per Hostess Brands share, representing atransaction value of approximately $5.6 billion. “[Hostess Brands is] a unique
opportunity to accelerate our focus on delighting consumers with convenientsolutions,” said Mark Smucker, CEO of The J.M. Smucker Co.

On August 7, 2023, Campbell Soup Company agreed to acquire Sovos Brands, Inc. for$23 per share in cash, representing a total enterprise value of approximately $2.7billion. “This acquisition fits perfectly with and accelerates our strategy of focusing on
one geography, two divisions and select key categories that we know well. Our
focused strategy has enabled us to deliver strong results over the last five years …
[and] enhance our brands and capabilities,” said Mark Clouse, CEO of Campbell

Mars Incorporated Acquired
Kevin’s Natural Foods

Tilray Brands (TSX:TLRY) Acquired Assets ofAnheuser-Busch Companies LLC (NYSE: BUD)On September 11, 2023, Mars Incorporated acquired Kevin’s Natural Foods forapproximately $800 million. “Kevin’s products are of a very high quality, nutritious,and convenient, without compromising on flavor, and are enjoyed by an engaged andloyal customer base across North America. The Kevin’s Natural Foods team hasdelivered impressive growth since it was founded four years ago, and we lookforward to drawing on our experience of nurturing and scaling founder-led brands,”
said Shaid Shah, Global President, Mars Food & Nutrition

On September 29, 2023, Tilray Brands acquired eight beer and beverage brands fromAnheuser-Busch for $83 million. The acquired businesses include Shock Top,Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company,
Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall
Energy. “I am confident that we will successfully integrate our current beer assets,”
said Irwin Simon, CEO of Tilray Brands.

John B. Sanfilippo & Son Inc. (NASDAQ:JBSS) Acquired
Snack Bars Assets of Treehouse Foods Inc. (NYSE:THS)

Kar Nut Products Company Acquired
Sahale Snacks Inc.

On September 29, 2023, John B. Sanfilippo & Son acquired certain assets relating tothe snack bars business unit of Treehouse Foods for $63 million. “This is a
momentous day for our Company as we close the largest and most transformational
acquisition in our history. This acquisition significantly accelerates our productdiversification strategy and allows us to offer our private label customers a complete
offering of snack bars,” said Jeffrey Sanfilippo, CEO of John B. Sanfilippo & Son.

On September 27, 2023, Kar Nut Products Company entered into a definitive
agreement to acquire Sahale Snacks, Inc. from The J. M. Smucker Company (NYSE:SJM)
for approximately $34 million. “"Sahale Snacks adds a fantastic super-premium
product to our range, considerably broadens our snack mix & nut portfolio and unlocks
significant new opportunities for us to help grow the category, which we are very
excited about,” said Victor Mehren, CEO of Second Nature Brands, the parent companyof Kar Nut Products.

1Deals in the U.S. and Canada, closed or announced over Q3 2023, selected subjectively based on being representative of recent market activity, excluding bankruptcy sales. All figures are denoted in USD.

Sources: S&P Capital IQ, Mergermarket, company press releases and various news sources (e.g., Newswire, GlobeNewswire).
Note: All trademarks, trade names, or logos referenced herein are the property of their respective owners.

5

Recent North American M&A Activity by Subsector
Food and Beverage Subsector Definitions

Deals by Subsector (TTM as of September 30, 2023)

Bakery:Production and distribution of baked goods
Better-for-You:
Differentiated food products with health benefits

Food

Confectionery/Snacks:
Chocolate, candy, nuts and other convenient snack foods
Dairy:
Production and distribution of dairy or dairy by-products, suchas cheese or yogurt
General:Conglomerates and general food businesses

Ingredients:
Goods used in the production of other food-related items
Produce:Fresh produce or other agricultural productsProtein Producers:
Meat and seafood producers and distributors

Beverages

Specialty-Pet:
Producers of pet food and treats

Alcoholic Beverages:
Wine, beer and spirits

Confectione
ry/Snacks
8%

Produce6%

Ingredients
6%

Bakery9%Nonalcoholic
Beverages
8%

Protein Producers
9%
Specialty-Pet
3%

Better-for-You
8%
Alcoholic
Beverages
27%

Dairy
5%
General11%

Nonalcoholic Beverages:
Beverages that do not contain alcohol

TTM = Trailing 12 months.

6Select Food and BeverageExperienceSelect Kroll Corporate Finance Food and Beverage Experience
SELL-SIDE ADVISOR

has been acquired by

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

has been acquired byhas been acquired byhas been acquired byhas been acquired bySELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

BUY-SIDE ADVISOR

has been acquired by

Gum Products Internationalhas been acquired bya portfolio company ofNote: All trademarks, trade names, or logos referenced herein are the property of their respective owners.

has been acquired by
has acquired

has been acquired bya portfolio company of8Select Kroll Corporate Finance Food and Beverage Experience—Cont’dFINANCIAL ADVISOR

has secured senior debt
financing from aconsortium of lenders

FINANCIAL ADVISOR

has secured senior debt
financing fromBUY-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

portfolio companies ofhas been acquired by

has acquired
has been acquired by

SELL-SIDE ADVISOR

BUY-SIDE ADVISOR

has been acquired byhas been acquired by

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

a division ofhas been acquired byhas been acquired byhas been acquired by

Note: All trademarks, trade names, or logos referenced herein are the property of their respective owners.

9Select Kroll Corporate Finance Food and Beverage Experience—Cont’d
SELL-SIDE ADVISORSELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

has been acquired byhas been acquired byhas been acquired by

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

a portfolio company ofhas been acquired byhas been acquired by

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

has merged withhas been acquired byhas been acquired byhas been acquired byhas been acquired bya portfolio company ofNote: All trademarks, trade names, or logos referenced herein are the property of their respective owners.

10Select Kroll Corporate Finance Food and Beverage Experience—Cont’d
SOLVENCY OPINION

ESOP ADVISORYSOLVENCY OPINION

TRANSACTION ADVISORYFAIRNESS OPINION

has been acquired byhas been acquired by

Performed financial and tax
due diligence on behalf of theBuyer

Financial advisor to the boardof managers of The Bardstown
Bourbon Company LLC

VALUATION OPINION

TRANSACTION ADVISORY

Cargill, Incorporated(nka)has completed the spinoff
has completed the spinoff ofFinancial advisor to the trusteeof the of Cargill, Incorporated
Employee Stock Ownership PlanSOLVENCY OPINION

TRANSACTION ADVISORYFAIRNESS OPINION

Driscoll’s, Inc.

has completed the sale ofhas been acquired by

Performed financial and tax
due diligence on behalf of theBuyer

Note: All trademarks, trade names, or logos referenced herein are the property of their respective owners.

has been acquired byhas been acquired by

Financial advisor to Driscoll’s,Inc.

Performed financial and tax
due diligence on behalf of theBuyer

11

For more information, please contact:
Bob Bartell, CFA

Joshua BennDr. Howard E. Johnson

Farzad Mukhi

Jon PrattPresident

Global Head of Consumer, Food,
Restaurant and RetailManaging Director, Canadian M&A
Advisory

Managing Director, Consumer, Food,
Restaurant and RetailManaging Director,

Corporate FinanceCorporate FinanceCorporate Finance

New York

TorontoLos Angeles

Bostonbob.bartell@kroll.com+1 212-450-2840+1 416-597-4500+1 424-249-1661

joshua.benn@kroll.com

howard.johnson@kroll.com

farzad.mukhi@kroll.com

Mark Kramer

Devin Kennealy

Stephanie Lau

Jennifer TerrellManaging Director, Transaction
Advisory Services

Director, Canadian M&A Advisory

Director, Canadian M&A Advisory

Corporate FinanceCorporate FinanceCorporate FinanceDirector, Fairness and Solvency
Opinions

TorontoToronto+1 416-361-6749+1 416-361-6761

devin.kennealy@kroll.com

stephanie.lau@kroll.com

Corporate Finance

Chicago+1 302-697-4654

Chicago+1 302-697-4522

mark.kramer@kroll.com

Growth Team
+1 857-327-6000
jon.pratt@kroll.com

Corporate Finance
Chicago+1 302-980-9650

jennifer.terrell@kroll.com

A b o u t Kr o ll
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