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Agriculture Technology Industry Update, October 2015

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Bridgepoint Merchant Banking releases an update on the Agriculture Technology industry with industry background, financial performance, valuation trends and corporate strategy considerations. The Principals of Bridgepoint has over $104 billion in transaction experience.

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Agriculture Technology Industry Update, October 2015

  1. 1. 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 20.0x 1bridgepointmb.com Source:  Bridgepoint   Merchant  Banking,   IBIS   World,  Capital  IQ Agriculture  Technology   Valuations  Bring  Sustained  Premium Key  Takeaways § Current Ag Tech industry valuation multiples are at historicalhighs – about 2x last cycle trough § Strong capital markets are supporting buyouts & acquisitions § Valuations reflect sustainable growth due to infancy of industry;; strategic approach critical to maximize value for Ag Tech companies § Bridgepoint Merchant Banking advises Ag Tech company owners that timing is attractive to consider exploring monetization, financing and other strategic options Executive Summary § Ag Tech company valuation multiples have demonstrated sustainable growth in recent years, driven by demand from consumers and agribusiness, government assistance and technologicalchange § Ag Tech demand is expected to rise as population, ag-­related innovation, production demand and spending continue to grow § Investments in Ag Tech are up over 2,000x year-­over-­year, reflecting the surplus of capital flowing in to promote development October  2015 Agriculture  Technology   Industry  Update Agriculture  Technology  Valuation  Cycle  – TEV  /  LTM  EBITDA Bridgepoint    Insights Bridgepoint   Merchant  Banking   is  a  division  of  Bridgepoint   Holdings,  LLC.  Securities  offered   through   an  unaffiliated   entity,  M&A  Securities  Group,   Inc.,   member  FINRA/SIPC 5.4x 12.4x 10.5x Current  Median 10.5x Historical  5-­Year  Median 9.6x Trough  Median  (2009) 5.4x
  2. 2. 2bridgepointmb.com Valuation § For publicly traded companies in the Ag Tech industry, TEV to LTM EBITDA multiples have increased roughly 200% from the 2009 trough (5.4x multiple) to a current median multiple of 10.5x, which is a moderate 9% premium over the historical 5-­year median multiple of 9.6x (see chart above) Corporate StrategyConsiderations § Transaction multiples and capital markets support for buyouts/acquisitions are at high levels. Ag Tech companies are well positioned to capture premium multiples relative to historicalnorms § Performing companies in the Ag Tech industry are, and will stay, attractive to strategic buyers. Bridgepoint Merchant Banking foresees an increase in the number of private equity buyers in the next 18 months due to an increase in debt availability on acceptable terms § Selling/financing from a position of strength will be key towards maximizing value. Bridgepoint sees Ag Tech as a premium play Industry Background § In order for the agricultural sector to meet demand, food production must increase by 70% to feed the projected world population of 9.6B people in 2050 § As an emerging industry in the agriculturalsector, Ag Tech’s goal is to make agriculture more efficient, sustainable and of higher quality through the implementation of technology § Ag Tech is comprised of the following subsectors: food ecommerce, water, precision ag (drones and robotics, decision support technology), bioenergy, biotech, biochemicals, sustainable protein, cannabis and food storage Activity § Investments have climbed to $2.06B midway through 2015;; $300M short of last years record breaking total. 2015’s year end projection of $4.1B is 4x greater than 2013, generating an attractive outlook for the industry § Deal volume is up 71% year-­over-­year, triggered by strong activity from investors. This compelling increase in funding shows the growth potential Ag Tech has moving forward Not  Disclosed Acquired  by  Galcon Bridgepoint  Portfolio   Company Biopharmaceutical   Company Not  Disclosed Equity  and  debt  capital   raise  (pending) Lead  Financial  Advisor USD26   million Common  stock  PIPE   with  warrants Sole  Placement  Agent USD50+   million Equity  capital  raise  to   support  acquisition  of   agricultural   manufacturing  company Financial  Advisor USD20+   million Sell-­side  advisory Sole  Financial  Advisor Selected  Bridgepoint  Merchant  Banking  Ag  Tech  Transactions About  Us Contact  Us Adam  Claypool Managing  Principal 515.325.7615 aclaypool@bri dgepointmb.com Matt  Plooster Managing  Principal 402.817.7900 mplooster@bridgepointm b.com § $2 billion  in  Ag  Tech  transaction  experience § $104+  billion  of  M&A  and  capital  raising  experience § 35+  completed  M&A  assignments  spanning  more   than  $29  billion § 40+  completed  corporate  finance  transactions,  raising   more  than  $74  billion  in  capital § 35+  years  cumulative  investment  banking  &  private   equity  experience   Agriculture  Technology  Industry  Update  – October  2015 Source:  Bridgepoint   Merchant  Banking,   IBIS   World,  Capital  IQ,  Forbes USD1.63   billion Sell-­side  Advisor  to  Dow   Chemical  on  the  sale  of   its  Styron  division  to   Bain  Capital Sole  Bookrunner Ag   Services   Company Wm.  Lee  Merritt Managing  Principal 402.817.7900 wmerritt@bridgepointmb.com Office  Locations Des  Moines,   IA Lincoln,   NE Omaha,   NE Denver,   CO Private  Equity   Firm  

Bridgepoint Merchant Banking releases an update on the Agriculture Technology industry with industry background, financial performance, valuation trends and corporate strategy considerations. The Principals of Bridgepoint has over $104 billion in transaction experience.

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