Health & Nutrition Industry Census 2011 - Trends in Mergers & Acquisitions

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Health & Nutrition Industry Census 2011 - Trends in Mergers & Acquisitions

  1. 1. Health & Nutrition Industry 2011 Census Trends in Mergers and Acquisitions Marco V. Galante, Principal Marco V. Galante, Principal J.H. Chapman Group, L.L.C. J.H. Chapman Group, L.L.C. 773-693-4800 773-693-4800 mgalante@jhchapman.com mgalante@jhchapman.com ©2012 J.H. Chapman Group, L.L.C.This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  2. 2. Contents Objective of Census . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Sub-Segment Analysis and Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Healthy, natural, organic, functional foods and beverages . . . . . . . . . . . . . . . . . . 9 Health and nutrition ingredients suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Contract manufacturers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Branded nutritional supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 OTC and natural personal care products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Licensing and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Retailers and distributors of these products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Conventional ingredients suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Recent Financings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 J.H. Chapman Group, L.L.C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 J.H. Chapman Group, L.L.C. makes no representation as to the accuracy and completeness of the information provided. The information in this presentation is obtained from various public sources. In the listings of Acquirers and Targets, the columns are blank if amounts are unavailable. Please do not reproduce it for third parties, but notify us of others who would like to receive it and we will contact them directly. ©2012 J.H. Chapman Group, L.L.C. 2This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  3. 3. Objective of Census Provide for market participants a Census of M&A activity and trends in the sub-segment of their industry, within the $5 million to $100 million transaction value range. Identify, where applicable, future trends that are likely to have an influence on transaction activity and valuations. ©2012 J.H. Chapman Group, L.L.C. 3This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  4. 4. Executive SummaryM&A Transactions Licensing and joint ventures continued to grow, with an increase of 26% over 2010. This trend is aWhile the 2011 M&A transactions for the total food strong indicator of companies seeking alternativeindustry sector eked a small increase of 7.6% over strategic options for growth.2010, the “Food & Beverage Processor” categorydeclined by 21% (55 transactions in 2011 versus 77 Organic and Functional Food & Beveragein 2010). This category continues to be the largest M&AThe following information is a summary of M&A contributor accounting for 51% of the transactions.activity in the health and nutrition sector, followed by This expanding area enjoyed an increase of 28%statistical information for each identified segment. above 2010 and double the number of 2006 transactions. Health and Nutrition Health and Nutrition Ingredients Suppliers Steady and growing M&A activity is reflective of 2011 in the Health and Nutrition Sector. Objectives As the second largest transaction contributor, this were focused by acquirers on strategic transactions category was 39% higher than in 2010, achieving supporting their growth and to augment their the highest number of transactions since 2006. product and application offering. Branded Nutritional Supplements In the health and nutrition category, there were a total of 109 transactions in 2011 (excluding Transactions in 2011 were flat with one transaction less than that of 2010 and 2006. licensing, joint ventures, financing, retail and distribution), an increase of 20% over 2010 and a Licensing & Joint Ventures substantial increase of 56% over the peak of 2006. The organic/natural food and beverage sector was An increase of 26% to 53 transactions indicates that the largest contributor with 51% of the total, companies seeking growth are pursuing other ways followed by health and nutrition ingredients and means in addition to traditional M&A. suppliers at 23%. 4 ©2012 J.H. Chapman Group, L.L.C.This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  5. 5. Executive Summary (cont’d) Financing recovered by year-end resulting in higher growth than was expected for the year as a whole. While the first half of 2011 experienced some easing in the capital markets, this appeared to A significant factor against this backdrop is that slow in the second half. At 38 financings, 2011 food manufacturers are facing considerable and was 22% below that of 2010. increasing pressure from rising commodity prices, which are making an impact on margins that are Growth Prospects being squeezed as consumers continue to resist Companiesandmarkets.com predicts that the price increases. functional beverages market will experience the North American M&A Activity highest growth at 8.8%, rising from $57 billion to $87 billion over the five-year period. While buy and sell side activity of the first half of Nutraceutical foods will be the second highest 2011 showed a steady pace of M&A activity in growth at 8.4% – making it achieve an estimated both strategic and financial acquisitions across $49 billion in five years time. various industries as compared to the preceding six-month period, the second half ‘stalled’ inEconomic and Market Environment in 2011 comparison to 2010 levels. The US Economy That said, robust cash positions, strong balance Regardless of investor positive sentiment or sheets and improved credit markets, coupled with underlying financials, all it took was scary news mounting pressure for growth in a low internal from Europe and/or Capitol Hill to send markets growth environment, are cited as strong indicators into a funk! that more transactions will likely be announced during the course of 2012. Equally, the appetite Despite that volatility, growth in financial markets for M&A increases as companies are less likely to exceeded expectations at the beginning of the feel inhibited by the volatile economy and the year, then retreated in mid-year, but substantially political unrest in Washington DC, as evidenced ©2012 J.H. Chapman Group, L.L.C. 5This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  6. 6. Executive Summary (cont’d) by the return of the large strategic acquirers. Also, buyer-seller expectation gaps are narrowing and valuations are stabilizing.Raw Materials and Food Prices – InflationPricing pressures and volatile commodity/input pricesare cited as the most significant growth barriers in thenext year, much more so than labor costs and lack ofcustomer demand.Price levels in 2012 hinge significantly on severalmacro-economic factors: supply-side risks, bothpolitical and weather-related (US drought, La Ninapatterns), fuel prices, and the value of the US dollar, allwith considerable risks for price and volatility.However, government agency forecasts for 2012 foodprices is that inflation is expected to "abate" while stillslightly above the historical average for the past twodecades. According to The Food Institute’s analysis ofgovernment data, the all-food 2012 CPI is projected toincrease 2.5% to 3.5% over 2011. ©2012 J.H. Chapman Group, L.L.C. 6This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  7. 7. Sub-Segment Analysis and Commentary Health & Nutrition focuses on those “sub-segments” at the intersection of the giant healthcare, personal care and food industries. Personal Care Natural Personal Care Healthcare Nutritional Supplements Ingredients Suppliers Functional OTC Foods Natural and Food Pharmaceuticals Organic Foods ©2012 J.H. Chapman Group, L.L.C. 7This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  8. 8. Sub-Segment Analysis and Commentary Number of Transactions Number of Transactions Segment YE 2006 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 Healthy, Natural, Organic, Functional Foods and Beverages 25 22 24 30 43 55 Health and Nutrition Ingredients Suppliers 21 20 17 7 17 25 Contract Manufacturers 3 2 4 3 7 4 Branded Nutritional Supplements 14 12 14 7 14 13 OTC & Natural Personal Care Products 7 6 2 5 9 12 Total 70 62 61 52 90 109 Licensing and Joint Ventures NA NA 21 52 42 53 Retailers and Distribution 13 12 6 2 8 8 Financings 25 19 25 44 49 39 Conventional Ingredients Suppliers NA 48 28 28 12 22 ©2012 J.H. Chapman Group, L.L.C. 8This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  9. 9. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and BeveragesFresh Juice and fruit processing transaction activity continued in 2nd half of 2011 Lorton’s Fresh Squeezed Juices Starbucks entered into the fresh juice category by acquiring Evolution Fresh for $30 million. Starbucks plans to replace Pepsico’s Naked Juice products with Evolution juice in 2012 as well as open up juice bars to compete directly with Jamba Juice. Follow-on acquisitions by Starbucks is expected in the coming years. In an effort to expand their produce offering, Dole acquired the parent company of blueberry provider SunnyRidge Farm Inc. SunnyRidge also sources and sells blackberries, strawberries and raspberries which will complement Dole’s fresh and frozen berry operations that have so far focused on strawberries. Blueberries and blackberries are some of the fastest growing items in the produce category. SunOpta Inc. announced that its subsidiary SunOpta Global Organic Ingredients acquired Lortons Fresh Squeezed Juices, Inc., located in San Bernadino, California. With approximately $10 million in sales, Lorton’s produces citrus based products in both industrial and packaged formats. ©2012 J.H. Chapman Group, L.L.C. 9This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  10. 10. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Corporate Strategic acquirers remain active As part of their growth strategy, The Hain Celestial Group announced two more acquisitions outside the USA. The company acquired Europe’s Best, a leading Canadian brand of natural frozen fruits and vegetables. Europes Best was previously a brand of Smucker Foods of Canada Corp., a subsidiary of The J.M. Smucker Company. Hain also acquired the Daniels Group, a marketer and manufacturer of natural chilled foods in the United Kingdom with three leading brands. This builds on Hain’s previous acquisitions in the UK (Linda McCartney brand in 2006 and Daily Bread in 2008) to create a strong portfolio of natural and fresh brands in the United Kingdom. Smart Balance, a leading manufacturer of heart healthy spreads and oils, acquired gluten-free food manufacturer, Glutino for $66.3 million. As the gluten-free market continues to grow, Smart Balance plans to further build upon this momentum, offering new products and building upon its existing portfolio of products. Farmer-owned cooperative, Sunsweet Growers Inc, announced their acquisition of Function Drinks. This marks the first foray into functional beverages by Sunsweet which recently developed the New Ventures Initiatives at Sunsweet. ©2012 J.H. Chapman Group, L.L.C. 10This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  11. 11. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans. Sales Multiple of EBITDA Multiple of 2011 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Dec. Bella Petrallas Holdings Advanced Nutritional Solutions Nov. Protenergy Natural Foods FoodSwing Nov. ConAgra Foods Agro Tech Foods Limited Kretschmer Wheat Germ Brand and Nov. Brynwood Partners VI L.P. Manufacturing Facility from The Quaker Oats Company Nov. Hearthside Food Solutions Roskam Baking Co (granola business unit) Nov. Starbucks Evolution Fresh 30.0 Oct. Richardson International Limited Innovative Foods Corporation Oct. The Hain Celestial Group Daniels Group 230.0 280.0 0.8 Oct. The Hain Celestial Group Europes Best brand Oct. Big Red Inc. Thomas Kemper Soda Company Oct. Dole SunnyRidge Farms Sept. C.H. Robinson Timco Worldwide, Inc. Golden Guernsey and La Vaca Bonita Aug. OpenGate Capital Brands & Dairy Processing Plant (Dean Foods) Arlon Food and Agriculture Aug. Kettle Cuisine Investment Aug. SunOpta Lortons Fresh Squeezed Juices 2.5 10.0 0.3 Aug. Blount Fine Foods Neco Foods LLC Aug. Bright Food Group Manassen Foods 516.0 Aug. Smart Balance Inc. Glutino Food Group 66.3 53.9 1.2 Aug. Groupe Danone Wockhardt Group (nutrition business) 354.7 Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 11This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  12. 12. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans. 2011 Sales Multiple of EBITDA Multiple of Acquirer Target Value (Contd) (US $M) Sales (US $M) EBITDA (US $M) Aug. MidOcean Partners South Beach Diet brand Aug. Sunsweet Growers Function Drinks July Associated Seafoods Lossie Seafood Natural Foods Holdings (Niman Ranch, June LNK Partners Sioux-Preme trade brand and Prairie 68.0 Grove Farms) June Yungevity Javalution Coffee Company June Lassonde Industries Clement Pappas and Company 390.0 390.0 1.0 60.0 6.5 June Cell-nique Cherrybrook Kitchen June TSG Consumer Partners Stumptown Coffee June Sun Rype Naumes Concentrates Inc. 11.0 SunOptas frozen fruit processing June Cal Pacific Specialty Foods, LLC. 1.8 equipment June General Mills Yoplait 1039.0 June Third Street Chai Cooper Tea Pita King Bakery (Commercial Baking May Kronos Foods Assets) May Calavo Growers Renaissance Food Group, LLC, May Mariani Packing Company Urban Processing, LLC SunOptas frozen fruit assets in Rosarito, May Fruvemex 3.2 Mexico May Blue Gold Beverages Epic Nutrition May Sara Lee Aidells Sausage Company 87.0 May Nestle W aters Sweet Tea Leaf Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 12This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  13. 13. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans. 2011 Acquirer Target Value Sales Multiple of EBITDA Multiple of (Contd) (US $M) Sales (US $M) EBITDA (US $M) April Nestle Yinlu Foods Group of China April Lidestri Food & Beverage M.H. Zeigler’s & Sons, LLC April Orkla Brands Rasoi Magic Foods March Cargill Sweekar March Beam Global Skinnygirl Spirits Brand Premier Foods plc (Quorn and Cauldron March Exponent Private Equity 331.9 brands) March Bazooka Candy Sharkies Organic Fruit Chews March Coca Cola Honest Tea March Heinz Coniexpress S.A. Industrias Alimenticias 2720.0 Feb. Evolv Health XOW ii Feb. Raisio Big Bear Group 130.2 89.0 1.5 18.6 7.0 Feb. Hain Celestial Group GG UniqueFiber AS 2.0 Feb. Hain Celestial Group Danival SAS 10.0 Jan. Smart Balance Bestlife Brand Dean Foods’ customer-brand yogurt Jan. Schreiber Foods business Jan. Thomas H. Lee Partners Acosta Sales and Marketing Jan. Lea Nature Ekibio Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 13This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  14. 14. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans. Sales Multiple of EBITDA Multiple of 2010 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Western European Sunny Delight juice Dec. Orangina Schweppes drink Dec. Cellnique Hibix Corporation Dec. Meyer Natural Foods Dakota Beef Dec. High Road Capital Partners Panos Brands 22.0 Dec. Yoplait Liberté 175.0 Dec. New Image Group Somnaceutics Nov. General Mills Mountain High Yoghurt Nov. W eston Foods Ace Bakery 110.0 Nov. Danone YoCream International 103.0 Nov. Umami Sustainable Seafood Baja Aqua Farms Sept. Lactalis Ebros dairy business Aug. Emmi Cypress Grove Chèvre 10.0 Aug. Usana Health Sciences BabyCare Limited 62.7 15.0 4.2 Aug. Cott Corporation Cliffstar 569.0 100.0 5.7 Aug. Lactalis Rachels Yogurt Aug. Lion Capital Picard Surgele 1970.0 1440.0 1.4 Aug. Nestle Vitaflo 42.0 Aug. SAIF Partners Huiyuan Juice Aug. Danone Proviva 50.0 July Gertrude Hawk Chocolates Drews All Natural July The Hain Celestial Group 3 Greek Gods 10.0 June Heart Health Blue Gold Beverages Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 14This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  15. 15. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans. 2010 Sales Multiple of EBITDA Multiple of Acquirer Target Value (Contd) (US $M) Sales (US $M) EBITDA (US $M) June Darwin Private Equity Plum Baby 15.0 22.0 0.7 June Danone Unimilk June Hain Celestial Group Churchill Food Products Ltd. May Hearthside Food Solutions Golden Temple (Cereal Division) May Coffee Holding Co. Inc. Organic Products Trading Company May Hain Celestial Group W orld Gourmet May Empire Kosher Kosher Valley April E&A Industries Udis Healthy Foods April Coca Cola Innocent April China Haisheng Juice Holdings Yitian Group April Sweet Tea Leaf Tradewinds Beverage March Mach One W hite Hat Brands March T reeHouse Foods Sturm Foods 660.0 340.0 1.9 March Fresh Harvest Products, Inc. AC La Rocco Pizza 1.5 Feb. Kore Go All In Feb. North Castle Partners Flatout, Inc. Feb. Raisio Glisten 29.7 Feb. Diamond Foods Kettle Foods 615.0 250.0 2.5 Jan. Malt-O-Meal Farina Mills Brand Jan. Shashi Foods MJs Fine Foods Specialty Foods Indias healthcare nutrition Jan. Nestle India 6.3 business Where available, data is b eing provided. ©2012 J.H. Chapman Group, L.L.C. 15This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  16. 16. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans. Sales Multiple of EBITDA Multiple of 2009 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Dec. DS Waters Owaters LLC Dec. Attune Foods Uncle Sam and Erewhon brands Dec. Danone Danone Clover Nov. Brynwood Partners VI L.P. Balance Bar Company (from Kraft Foods) Oct. Hain Celestial Group Infinitea Kombucha Oct. Food Collective Helens Kitchen and Organic Bistro Sept. Pulmuone Monterey Gourmet Foods Sept. Full Motion Beverage Performaxx Brands, Inc (Energize Brand) Aug. Full Motion Beverage Mojava Aug. AMI Brands Embodi Aug. Pepsico Amacoco Aug. Foster Farms Dairy Humboldt Creamery July Skinny Nutritional Corp. "Skinny" Trademarks July Pegasus Capital Advisors Hain Pure Protein June Fresh Harvest Products Organic Chef June Renaissance Food Group Really Cool Food Company June Beverages Holdings LLC Bossa Nova June Dean Foods Alpro 458.0 366.0 1.3 June Dinewise Home Bistro June Nutrition Solutions (Atkins) Bora Bora April Swander Pace Applegate Farms Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 16This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  17. 17. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans.2009 Sales Multiple of EBITDA Multiple of Acquirer Target Value (Contd) (US $M) Sales (US $M) EBITDA (US $M) BAZZA High-Energy Tea trademark from March BYB Brands, Inc. Cooper Tea Company Feb. Andromeda Acquisition Corp. Galaxy Nutritional Foods, Inc. 6.8 24.8 0.3 1.2 5.7 Feb. Lifeway Foods Fresh Made Dairy 14.0 10.0 1.4 Feb. M&K Acquisitions Gleukos, Inc. Feb. Nest Collective Plum Organics Frucor Beverages Group Ltd (from Groupe Feb. Suntory 775.0 270.0 2.9 Danone SA) Jan. Otsuka Pharmaceuticals Nutrition & Santé Jan. Hilco Equity Partners Niman Ranch 47.8 Jan. Tivall (a division of Osem Group) Foodtech International 20.0 Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 17This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  18. 18. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans. Sales Multiple of EBITDA Multiple of 2008 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Oct. Osem Group Tribe Mediterranean Foods 57.0 32.0 1.8 Oct. Pepsico Spitz International Company Sept. Green Mountain Coffee Roasters Tullys 40.0 30.4 1.3 Sept. Ians Natural Foods Inc. Healthy Handfuls LLC Aug. Aventura Equities Inc. Byers Food Inc. Aug. Promax Nutrition Corp. Pure of Holland LLC Aug. SunOpta Pure Nature Organics July W essanen So Good 11.7 July Olympus Partners Anns House of Nuts Inc. July Campbell Soup Co. Country Gourmet Foods June General Mills Humm Foods June Meyer Natural Angus Coleman Natural Foods May Pepsico V Water April SunOpta Tradin Organics 120.0 April T he Hain Celestial Group Daily Bread, Ltd. April T SG Consumer Partners MonaVie March Natures Products Inc. Champion Nutrition March T he Hain Celestial Group MaraNatha and SunSpire Brands 40.0 Pilgrims Pride Corporation (Turkey March T he Hain Celestial Group Operation) Feb. Coca-Cola Honest Tea Where available, data is b eing provided. ©2012 J.H. Chapman Group, L.L.C. 18This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  19. 19. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans.2008 Sales Multiple of EBITDA Multiple of Acquirer Target Value (Contd) (US $M) Sales (US $M) EBITDA (US $M) Feb. Coca-Cola NutriJoy Inc. Feb. Robertet Group Plantes Aromatiques du Diois 8th Continent (A General Mills and Dupont Feb. Stremicks Heritage Foods JV) Jan. Meyer Natural Angus Lauras Lean Beef Co. 150.0 Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 19This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  20. 20. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans. Sales Multiple of EBITDA Multiple of 2007 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) W holesome and Hearty Foods Company Nov. Kelloggs (Gardenburger brand) Nov. Kelloggs Bear Naked 20.0 Oct. Amish Naturals Schlabach Amish Wholesale Bakery Oct. Amish Naturals Prima Pasta Oct. Clearlight Partners Apple and Eve Zero Debt Bottling Corp. (a.k.a. 505 Aug. Creo Capital Partners Southwestern) Aug. T he Hain Celestial Group Plainville T urkey Farm 30.0 July ConAgra Alexia Foods 35.0 July Nestle Novartis Medical Nutrition 2500.0 Vialat (70% of its fresh dairy activity in May Group DANONE Chile) May Clearly Canadian Beverage Corp. My Organic Baby 2.5 May Coca Cola Glaceau 4100.0 355.0 11.5 May T he Hain Celestial Group Tofu Business of WhiteWave Foods March Integrated Biopharma BevSpec (Syzmo Brand) Feb. Clearly Canadian Beverage Corp. DMR Food Corporation Feb. Rich Products GLP Free Manufacturing Susquehanna International Group Feb. U.S. Mills (SIG) Investments Jan. Coca Cola Fuze Beverage Jan. Catterton Partners CoolBrands Dairy, Inc. Where available, data is b eing provided. ©2012 J.H. Chapman Group, L.L.C. 20This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  21. 21. Sub-Segment Analysis Healthy, Natural, Organic, Functional Foods and Beverages Trans. 2007 Sales Multiple of EBITDA Multiple of Acquirer Target Value (Contd) (US $M) Sales (US $M) EBITDA (US $M) Eskimo Pie, Chipwich brands, Real Fruit Jan. Dreyers Grand Ice Cream trademark and Eskimo Pie foodservice business (Coolbrands) Jan. Health Sciences Group Kalahari Tea Jan. ICBS DNA Distribution (maker of GO-JI Plus) Where available, data is b eing provided. ©2012 J.H. Chapman Group, L.L.C. 21This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  22. 22. Sub-Segment Analysis Health and Nutrition Ingredient Suppliers • Israeli based, Frutarom Industries announced their fifth acquisition of 2011, acquiring USA based Flavor Systems International for $35.3 million. Flavor Systems most recently reported revenue of approximately $18.4 million. With this acquisition, Frutarom intends to further build its presence in North America, entering new markets such as flavored coffees and shakes as well as savory flavors where it only has a presence in Europe. Just prior to this announcement, the company acquired, Aromco for $25 million. Aromco is a UK-based flavors company serving developing markets such as Eastern Europe, Africa and Asia. The company was founded in 1985 by Keith Brown and achieved $13 million in revenue in 2010. • US based, CHS Inc, a leading cooperative owned by farmers, ranchers and co-ops, announced their acquisition of Solbar, in a deal valued at approximately $133 million. CHS is a diversified energy, grains and foods business and a Fortune 100 company while Solbar is headquartered in Ashdod, Israel, and provides soy protein ingredients to manufacturers in the meat, vegetarian, beverage, bars and crisps, confectionery, bakery and pharmaceutical manufacturing markets. Both companies are publicly traded and CHS achieved sales of $25.3 billion in 2010. ©2012 J.H. Chapman Group, L.L.C. 22This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  23. 23. Sub-Segment Analysis Health and Nutrition Ingredients Suppliers Trans. Sales Multiple of EBITDA Multiple of 2011 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Nov. CHS Solbar 133.0 Nov. Innophos Holdings Kelatron Corporation 21.0 Oct. Naturex Burgundy Botanical Extracts 18.0 Oct. FMC Corporation South Pole Biogroup Ltda A.M. Todd Groups Ingredients and Flavors Oct. W ILD Flavors GmbH Division Sept. Synergy Flavors Sensus, LLC Sept. Frutarom Flavor Systems International Inc. 18.4 Sept. W ILD Flavors GmbH A.M. Todd Ingredients/Flavors 100.0 Aug. Ashland Inc Specialty Products Inc. 3200.0 The C.F. Sauer Company (margarine Aug. Bunge North America assets) Aug. Frutarom Aromco 25.0 13.0 1.9 Aug. ADM Elstar Oils S.A. of Poland July AarhusKarlshamn (AAK) Golden Foods/Golden Brands 120.0 June Viterra Premier Pulses International June Israel Chemicals Cosmocel Quimica June Stepan Company Lipid Nutrition B.V. May Royal DSM N.V. Vitatene S.A.U . May Palsgaard Emulsion Holland Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 23This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  24. 24. Sub-Segment Analysis Health and Nutrition Ingredients Suppliers Trans. 2011 Acquirer Target Value Sales Multiple of EBITDA Multiple of (Contd) (US $M) Sales (US $M) EBITDA (US $M) April Evolva Abunda Nutrition March Azelis S&D Group Limited Feb. Nestle CM&D Pharma Jan. HallStar BioChemica International Jan. ICV Partners Stauber Performance Ingredients Jan. Frutarom East Anglian Food Ingredients Ltd. 4.8 8.4 0.6 Jan. Dupont Danisco 6300.0 Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 24This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  25. 25. Sub-Segment Analysis Health and Nutrition Ingredients Suppliers Trans. Sales Multiple of EBITDA Multiple of 2010 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Dec. DSM Martek 1087.0 450.0 2.4 Dec. Omega Protein Cyvex Nutrition Sept. DSM Microbia Sept. Solbar Green Planet Farms 7.8 Martek Biosciences manufacturing plant in Sept. Alltech 14.0 W inchester, KY Aug. T rygg Pharma AS EPAX AS 91.0 51.2 1.8 July Marco Hi-Tech Reducol Assets (from Forbes Medi-tech) June Novus International IQF Group June BASF Cognis 3833.0 3215.0 1.2 450.0 8.5 May Viterra 21st Century Grain Processing 90.5 March Lallemand Health Ingredients Lal’Food March H2 Equity Partners Kirin Agribio Company Nutra Cea (Natural Glo, Satin Finish, and March Manna Pro Products 0.7 Max-E-Glo Brands and Trademarks) March Institut Rosell-Lallemand DSM (LAFTI range of probiotic strains) NutraCeas cereal ingredient Feb. Kerry Group 4.0 business Albion Laboratories, Inc. (Animal Nutrition Feb. Novus International Division) Jan. Kemin Industries Soda Feed Ingredients Where available, data is b eing provided. ©2012 J.H. Chapman Group, L.L.C. 25This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  26. 26. Sub-Segment Analysis Health and Nutrition Ingredients Suppliers Trans. Sales Multiple of EBITDA Multiple of 2010 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Dec. DSM Martek 1087.0 450.0 2.4 Dec. Omega Protein Cyvex Nutrition Sept. DSM Microbia Sept. Solbar Green Planet Farms 7.8 Martek Biosciences manufacturing plant in Sept. Alltech 14.0 W inchester, KY Aug. T rygg Pharma AS EPAX AS 91.0 51.2 1.8 July Marco Hi-Tech Reducol Assets (from Forbes Medi-tech) June Novus International IQF Group June BASF Cognis 3833.0 3215.0 1.2 450.0 8.5 May Viterra 21st Century Grain Processing 90.5 March Lallemand Health Ingredients Lal’Food March H2 Equity Partners Kirin Agribio Company Nutra Cea (Natural Glo, Satin Finish, and March Manna Pro Products 0.7 Max-E-Glo Brands and Trademarks) March Institut Rosell-Lallemand DSM (LAFTI range of probiotic strains) NutraCeas cereal ingredient Feb. Kerry Group 4.0 business Albion Laboratories, Inc. (Animal Nutrition Feb. Novus International Division) Jan. Kemin Industries Soda Feed Ingredients Where available, data is b eing provided. ©2012 J.H. Chapman Group, L.L.C. 26This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  27. 27. Sub-Segment Analysis Health and Nutrition Ingredients Suppliers Trans. Sales Multiple of EBITDA Multiple of 2009 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Nov. Symrise (Germany) Futura Labs Oct. Advitech Botaneco Sept. Qualsec Vitamin Spice Aug. Naturex Natraceutical March Burgundy Botanical Cognis botanicals extract business Feb. Mach One Corporation Ceres Organic Harvest 8.0 20.0 0.4 Jan. Chr. Hansen Urex Biotech Where available, data is b eing provided. ©2012 J.H. Chapman Group, L.L.C. 27This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  28. 28. Sub-Segment Analysis Health and Nutrition Ingredients Suppliers Trans. Sales Multiple of EBITDA Multiple of 2008 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Nov. Biorigin PTX Food Corp. Oct. Danisco GraceLink Ltd. (Glucagel brand) Sept. RFI Ingredients W ilsey and Sons Qufu Shengwang Stevia Biology and Sept. Sunwin International Neutraceuticals Science Company Aug. DSM Provexis (30% purchased) 2.0 Aug. Glanbia Optimum Nutrition 315.0 185.0 1.7 July Besins Healthcare S.A. Olympian Labs July Dynova Laboratories SiCap Industries July Rousselot PEPTAN June All American Pharmaceutical Laurel Dairy May Premium Ingredients International Bulk Pharmaceuticals Inc. April Iranex Group Bio-Serae 11.0 March Cognis InterMed Discovery March NutraCea Irgovel 14.0 Feb. Barentz Europe Vitablend Holding Jan. Eurogerm Leag 5.8 Jan. Naturex Berkems "Actifs Innovants" division 14.0 5.6 2.5 Where available, data is b eing provided. ©2012 J.H. Chapman Group, L.L.C. 28This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  29. 29. Sub-Segment Analysis Health and Nutrition Ingredients Suppliers Trans. Sales Multiple of EBITDA Multiple of 2007 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Dec. Chr. Hansen Medipharm Dec. Natrol, Inc. Plethico Pharmaceuticals Limited 81.0 Dec. Naturex Chart Corporation Nov. Frutarom RAD Technologies 4.1 1.5 2.7 Tat Nisasta (Galam and Tat Nisasta, a Turkish starch, glucose and isoglucose manufacturer, have Nov. Galam formed a partnership to meet the increasing global demand for fructose) Oct. Galam Group Atomer S.L. Oct. Novozymes Biocons enzyme business 115.0 27.0 4.2 Pizzeys Milling (Omega 3 ingredient Sept. Glanbia business) Sept. Natraceutical Cevena Bioproducts 2.8 July Avesthagen Renaissance Herbs May Gadot Biochemical Industries Ltd. Pharmline Holding Inc. (85%) 37.0 May Lonza S.A.M. Electron Technologies First Israeli Turnaround Enterprise May Solbar (51% stake) 19.6 Fund May Naturex HP Botanicals 3.0 3.8 0.8 MDB Twello BV (operates under the name April Barentz Europe Fa. L.I. Frank - Fa. Wed. W. Miedendorp) Chinook Group Limited (certain choline March Balchem Corporation chloride business assets) Tempo Canada (expansion of strategic Feb. Lipid Nutrition partnership) Feb. Univars Czech Ekozym Jan. Naturex Hammer Pharma 13.0 10.1 1.3 1.2 11.2 Jan. Polifenoles Naturales National Bioscience Corp 29 ©2012 J.H. Chapman Group, L.L.C.This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient withoutWhere available, data isChapman Group. permission from the J.H. b eing provided.
  30. 30. Sub-Segment Analysis Contract Manufacturers • Omega Protein Corporation, an ingredients supplier and the nations leading producer of Omega- 3 fish oil and specialty fish meal products, announced their acquisition of InCon Processing LLC, a Batavia, Illinois based specialty toll processor that utilizes molecular distillation technology to concentrate a variety of compound products, including Omega-3 fish oils. This acquisition further develops Omega Protein’s vertical integration of their commercial fishery and human nutrition distribution channels. The concentrated fish oils manufactured by InCon will be marketed and sold under the Companys OmegaActivTM brand by Cyvex Nutrition, a subsidiary of Omega Protein that the company acquired in December 2010. ©2012 J.H. Chapman Group, L.L.C. 30This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.
  31. 31. Sub-Segment Analysis Contract Manufacturers Trans. Sales Multiple of EBITDA Multiple of 2011 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Sept. Omega Protein Corporation InCon Processing LLC Kohlberg Kravis Roberts & Co L.P. April Pfizers Capsugel business 2375.0 750.0 3.2 (KKR) April Gumlink A/S Tab Labs Skyline Global Partners & Prairie April Captek Softgel International Capital Trans. Sales Multiple of EBITDA Multiple of 2010 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Nov. SunOpta Edner of Nevada 4.0 10.0 0.4 Nov. UAS Labs APN Labs Aug. Danisco Research Solutions July National Enzyme Company Sora Laboratories April Pharmachem AmeriFill April ConAgra Elan Nutrition April Milk Specialties Global Protient’s Dairy Processing Facility Trans. Sales Multiple of EBITDA Multiple of 2009 Acquirer Target Value (US $M) Sales (US $M) EBITDA (US $M) Aug. Herbalife Micelle Laboratories April CapsCanada Two additional gelatin production facilities March Milk Specialties Global Edan Naturals Where available, data is being provided. ©2012 J.H. Chapman Group, L.L.C. 31This document contains proprietary and confidential information of J.H. Chapman Group and may not be distributed or discussed beyond the original recipient without permission from the J.H. Chapman Group.

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