DPC Acquisition Proposal Summary

D.P.C. Diversified Products Corporation
Table of contents
ACQUISITION RATIONALE
BRAND SITUATION ANALYSIS
RECOMMENDATION #1 Acquisition & Integration
RECOMMENDATION #2 Invest in Marketing and Promotions to Revitalize Existing
Product
RECOMMENDATION #3 Launch a Brand Extension
FINANCIAL IMPACT

D.P.C. Diversified Products Corporation 3
Acquisition Rationale
Motivation to Sell
• Hungry-Man is a foundation brand
& not a core asset
• Not a cash generator
• Decline in sales (actual and
projected)
Motivation to Buy
• Strong brand awareness
• Opportunity to increase units sold
to each customer
• Potential to increase efficiency from
corporate culture integration

ACQUISITION RATIONALE
BRAND SITUATION ANALYSIS
RECOMMENDATION #1 Acquisition & Integration
RECOMMENDATION #2 Invest in Marketing and Promotions to Revitalize Existing
Product
RECOMMENDATION #3 Launch a Brand Extension
FINANCIAL IMPACT

Frozen Meal Industry & Trends
Predicted growth of 1.2% in 2013, and 0.9% in
each of the next three years
Sources: * Mintel; ** Ibis World; *** Pinnacle 10-K
5
Key Industry Trends:
 Health conscious
consumers
 Recovering economy,
increased disposable
income
Opportunities for
Differentiation:
 Follow consumer trends
 Innovation
Growth rate is expected to
be nominal until 2016

The Frozen Meals Single Serve
Full-Calorie Market
(in millions)
The Frozen Meals market ($7.9B)
(in millions)
Single Serve -
Full Calorie
$1,740
22%
Single Serve -
Low Calorie
$2,260
29%
Multi Serve
$1,600
20%
Hand Held
$1,540
19%
Other
$760
10% Hungry-Man
$206
12%
Stouffer's
$506
29%
Other
$764
44%
Marie
Callender's
$263
15%
Frozen Meal Market

Main Shopper Hungry-Man Banquet Marie Callender’s Stouffer’s
Gender
Women (58%)
Consumed by Men
(70%)
Women Women Women
Education Mid education Mid education High school+ College+
Age 25-45 45-54 55+ 35-54
Income <$20K $75-149K $75-150+ $75-150K
Married No Yes Yes No
7
Frozen Meal Consumers
Sources: MRI Database; Conversation with Tony Hatok
Meet Robert.
Single, 35 years old from FL.
Start working right after high
school. Cashier at Target.
Hungry-Man consumer.

Hungry-Man Decision Making Unit
Sources: MRI Database; Conversation with Tony Hatok
Role
Criteria
Power
Perception
Motivations
Men
Manly,
hearty, large
portion
Influencer
Quality, Size,
price, Health
Extremely
High
Positive
Women
Convenience
Primary
Purchasers
Price,
perceived
value
High
Neutral

Hungry-Man Product
 Hungry-Man is segmented into five
categories – frozen dinners and
entrees account for 98% of the entire
brand’s revenues.
 In 2012, the brand is expected to
generate just over $206 million in
total retail sales.
Sources: Neilsen Database; Conversation with Matt Troyka, Hungry-Man Brand Manager; Mintel
9
52 Weeks Sales, Period Ending (in millions)
2010 2011 2012
Hungry-Man
Sales $ 218 $213 $206
% Change -2.5% -3.2%
Total Single
Serve Full
Calorie Meal $1,781 $1,730 $ 1,740
% Change -2.9% 0.6%

Current Brand Marketing
0
500
1000
1500
2000
2500
3000
3500
2007 2008 2009 2010 2011 2012
Total
Ad
(Dollars
in
000)
Direct Advertising Spending
Year
Sources: Conversation with Matt Troyka, Hungry-Man Brand Manager; Ad$pender
10
2012 UFC Promotion
2007 Television Commercial
The brand spent only $2,200 on advertising in
2012, compared to the $3 million spent in 2007

 Capital intensive industry. High mechanization
 Raw materials account for 55% of cost of products
sold
 Economies of scale and cost reduction are key factors
Manufacturing & Distribution
11
 Located in Fayetteville, Arkansas
 Four warehouses and eight distribution centers,
owned and operated by a third-party
 Market penetration (ACV) is 67%
Manufacturing
Distribution

12
McKinsey’s 7S Model
• Hierarchical management
structure, with business unit
separation
• Traditional grocery distribution;
both direct and indirect channels
• No vision, mission, or shared
values defined or
communicated by leadership,
leading to a disjointed culture
• Lean organizational structure
• Fewer employees and resources
dedicated to foundation brands
• No formalized training or
development
• Focus and investment is on
leadership brands
• Foundation brands are used as
a source of generating cash flow
• Top down management style
• Lack of transparency
• Part of the BirdsEye frozen foods
division
• As a foundation brand, has
fewer dedicated employees
• Not many formalized
opportunities for advancement
• Foundation brand
• Lack of investment in the brand
will result in an inability to
keep up with industry trends
• Hierarchical structure does not
empower employees to take
ownership
• Employees aren’t embedded in
the Pinnacle community
Structure
Systems
Shared
Values
Staff
Skills
Strategy
Style
• Only frozen prepared meals
brand within Pinnacle
Sources: Conversation with Mary Lou Kehoe

Current Brand SWOT Analysis
13
Strengths
• One-of-a kind
• Brand awareness and self
identification
Weaknesses
• Neglected foundation brand
• Hard to reach new
consumers
• Perceived as being
unhealthy
Opportunities
• Increase repurchasing
• Capitalize on brand
awareness
• Position as everyday brand
from the “man-cave”
Threats
• Changing frozen meal
industry
• New competition
• Without attention to the
brand, neglected foundation
brand

Valuation and Strategy Timeline
Selected Financial Information (Pre-Acquisition)
Projections
2012 2013 2014 2015 2016 2017
Net Income $ 3.3 $2.6 $2.7 $ 2.7 $ 2.6 $ 2.5
Total Assets $ 99.3 $100.6 $ 104.3 $ 107.8 $ 111.0 $ 114.1
Unlevered
Free Cash
Flow
$ 17.5 $ 17.6 $ 16.7 $ 17.9 $ 18.0
Present Value
(6.76% WACC)
$16.4 $ 15.4 $ 13.7 $ 13.8 $13.0
Net Present Value
$ 268 Million
Multiple
8.12x EBITDA
Q4 2012
• Acquire Hungry-Man
2013
• Existing product marketing
• Integration into DPC
• Develop new Hungry-Man
Grill Favorites
2014
• Debut Hungry-Man Grill
Favorites
• Existing product and new
product marketing
2015
• Existing product and new
product marketing
Objective: Increase market share within the Single
Serve, Full Calorie frozen meal market and
increase our net income.

President, Frozen
Foods Division
Chief Financial
Officer
Dir of Finance,
Hungry-Man
VP of Sales
Sales Reps,
Hungry-Man (4)
Sales Rep,
Hungry Grill
Favorites(1)
VP of Human
Resources
Hungry-Man
Integration Team
Chief Marketing
Officer
Brand Manager,
Hungry-Man
Associate Brand
Manager
Brand Manager,
Hungry-Man Grill
Favorites
Associate Brand
Manager
16
Target Acquisition:
Organizational Structure

Target Integration
Phase 1:
Pre-Acquisition
• Integration team
development
• Culture assessment
• Prepare strategy
Phase 2:
Acquisition &
Integration
• Talent gap analysis
• Restructuring and
recruiting
• Onboarding, training
and development
Phase 3:
Implementation
& Evaluation
• Integration team
meetings
• Training and job
shadowing programs
• Quarterly town hall
meetings

Mission & Community Commitment
Sources: Feeding America
Our Mission
To deliver exceptional products and brands, positively impacting the
lives of families across the nation.
Our Commitment to the Community
One in six Americans face hunger,
and we want to help. DPC has
partnered with Feeding America, the
nation’s leading organization working
to combat hunger. We will donate
$0.01 for each unit sold.

Quality
We strive to provide our
customers with the highest
quality of ingredients,
manufacturing, and ultimately
final product.
Integrity
We act with honesty and
transparency. We respect and
value the opinions and diverse
backgrounds of our
employees and customers
alike.
Accountability
We are dedicated to positively
impacting the communities
where we operate. We are a
solution oriented culture,
taking responsibility for our
own actions and results. We
make decisions as though we
are the owners of the
company.
Shared Values
19

Post Acquisition Goals:
Existing Product
Brand Average Units purchased per
person per year
Hungry-Man 7
Marie
Callender’s
13
Stouffer’s 19
Sources: MRI Database; RDS Database
Increasing
annual units
purchased by
Hungry-Man
consumers.
Leverage current
online activity to
expand brand
awareness to
non-customers
and improve
loyalty.
Improve
retention rate
and repurchases
by investing in
coupons.
Continue to
promote the
brand’s online
presence as a
way to build
self
identification.
Long term

Marketing & Promotions
Sources: MRI Database; DMA 2010 Statistical Fact Book; Content Ads; Facebook Ad Conversion Rates
Current
product
marketing
plan
Current
budget +
$485K
Facebook
campaign
Yahoo! E-
Mail
Campaign
In-Store
Coupons
Website
Redesign
Generate repeat purchases
and attract new consumers.
30.4% of Hungry-Man
shoppers
167.5M US FB Users,
76.2M Men, 739K interested
in frozen food, 58% conversion rate

Why Launch a Brand Extension
Current perception
Cannibalization
Launch
brand
extension
Consumer Preferences
Competitors First to Market
Actual Demand

Flavors: Grilled
Pepper and
Garlic Chicken,
Grilled Steak
Tips
Quality: Raw
materials and
production
process will be
similar to
existing
products
Packaging:
green
(associated with
health) and
benefits in front
Pricing:
Maintain line
pricing as with
current product
Manufacturing
facilities: plant
running under
capacity (66%)
Distribution:
Existing
structure.
Slotting fees .
67% ACV.
Hungry-Man Grill Favorites

Target Market & Consumer
Market Size by Segmentation Household
(M)**
Current Sales
(M $)
Projected
Awareness
Marie Callender’s & Stouffer’s (Age 18-35) 3 161 Very High
Marie Callender’s & Stouffer’s(Age > 35) 11.2 608 Medium to High
Remaining Households 116 Low to Medium
Sources: Mintel; MRI Database
Target:
Marie
Callender’s &
Stouffer’s
customers,
ages 18-35
Consumers with
awareness of the
brand.
Existing frozen
meal eaters.
Competitors’
efforts focused
on families with
older children.
Interested in a
healthier
product and a
satisfying meal.

Holistic Digital Marketing Plan:
Hungry Man Grill Favorites
27
AWARENESS CONSIDERATION SELECTION LOYALTY
Facebook
Blogs
Ads
Website
Coupons
Video
POS
In-Store
Coupon
PURCHASE
Mailing
list
There are 1.72 million
monthly Google searches
for frozen food, Hungry-
Man, Marie Callender’s and
Stouffer’s.
Food blogs are an
important tool for driving
word-of-mouth, as 47% of
those who are 25-45 and
online read blogs.
YouTube in-stream
ads
Facebook coupons e-Mail marketing

Hungry-Man Grill Favorites Marketing
Sources: Marketers Guide to Media 2011; DMA 2010 Statistical Fact Book; Conversation with Tony Hatok; Beauty Redefined; Catalina Marketing FAQ; Conversation with Tony Hatok; MRI Database
Us Weekly
Sports Illustrated: Swimsuit Issue Coupons: Catalina & In-Store
In-Store Samples

Hungry Man Grill Favorites Projections
Based on the substantial future positive contribution, Hungry-Man Grill
Favorites has potential to be lucrative
Brand Extension Projections
(in thousands) Year 1 Year 2 Year 3
Revenue $ 12,625.16 $ 21,054.72 $ 23,580.75
Units sold 6,684 10,955 12,060
Net Contribution $ (423.38) $ 982.63 $ 3,696.38
Source: New Products and The Pivotal Consumer
29
Competitors:
Benefits advertising
campaign and an
aggressive
promotions strategy
Hungry-Man:
Focus on new
customer retention
Expected reaction to new brand extension

Income Statement Projections
Net Income 2012
New Management
New Slotting Fees
Increased
Marketing
Budget
Net Income 2014 Increased Sales Growth
Reduced SG&A expenses
after launch
Net Income 2017
31
Sources: Schonfeld & Associates and Conversation with Matt Troyka, Hungry Man Brand Manager; Tracking Prices of Commodity Prices and Food Costs
Selected Income Statement Information
($ in millions)
Projections
2012 2013 2014 2015 2016 2017
Growth Rate 1.5% 9.6% 4.8% 3.4% 2.0%
Revenue $ 139.0 $ 141.1 $ 154.6 $ 162.1 $ 167.5 $ 170.9
Gross Profit
(32.5%)
$ 45.2 $ 46.3 $ 54.0 $ 58.6 $ 62.2 $ 64.7
Operating Income
(19.3%)
$ 26.9 $ 26.0 $ 28.1 $ 33.2 $ 36.5 $ 38.8
Net Income $ 3.3 $ 1.9 $ 2.0 $ 4.3 $ 5.5 $ 6.1
Manage COGS expense

Balance Sheet Projections
32
Sources: eStatement Studies, IBIS Report, Pinnacle 10-K, Schonfeld & Associates
Selected Balance Sheet Information
($ in millions)
Projections
2012 2013 2014 2015 2016 2017
Current Assets $ 43.7 $ 43.6 $ 49.3 $ 62.1 $ 71.9 $ 89.8
Non-Current Assets $ 55.6 $ 57.4 $ 59.3 $ 59.7 $ 60.1 $ 60.4
Total Assets $ 99.3 $ 101.0 $108.6 $ 121.8 $ 131.9 $ 150.2
Current Liabilities $ 30.6 $ 31.0 $ 34.0 $ 35.7 $36.9 $ 37.6
Non-Current Liabilities $ 48.2 $ 48.2 $ 51.2 $ 58.9 $ 62.7 $ 74.2
Total Liabilities $ 78.8 $ 79.2 $ 85.2 $ 94.5 $ 99.6 $ 111.8
Owners Equity $ 20.5 $ 21.8 $ 23.3 $ 27.2 $ 32.3 $38.4
Total L + OE $ 99.3 $ 101.0 $ 108.6 $ 121.8 $ 131.9 $ 150.2

12.0
14.0
16.0
18.0
20.0
22.0
24.0
2013 2014 2015 2016 2017
Unlevered
Free
Cash
Flows
($
in
Millions)
Year
Unlevered Free Cash Flows
Before Acquisition After Acquisition
33
Hungry Man Brand Valuations
Beta (be) 1.17
Risk-free Rate (rf) 1.65%
Market Risk Premium 7.50%
Cost of Equity (re) 10.41%
Cost of Debt (rd) 8.0%
Tax Rate (t) 38%
Equity Ratio (E/V) 0.33
Debt Ratio (D/V) 0.67
WACC 6.76%
WACC Calculation
ConAgra Beta (be) 0.49
ConAgra Enterprise Value (V) 15.24
ConAgra Market Cap (E) 12.11
ConAgra (E/V) 0.79
Unlevered Beta (bu) 0.39
Hungry-Man (E/D) 2.0
Hungry-Man Beta (be) 1.17
Beta Calculation
Sources: Yahoo! Finance

Current Valuation:
$268 Million
8.12x EBITDA
Valuation After Revitalization:
$355 Million
10.76x EBITDA
Initial Offer: $241M (90% of Current Valuation)
Maximum Price: $308M (15% Premium)
34
Final Valuation
EBITDA
Multiple
•Typically 8-10x EBITDA
Company
Valuation
•33% Increase in NPV after
revitalization
Purchase
Price
•Ranges between industry
EBIDTA multiples
Sources: Schonfeld & Associates and Conversation with Matt Troyka, Hungry Man Brand Manager; Tracking Prices of Commodity Prices and Food Costs

The Bottom Line
Acquire
Hungry-
Man
Integrate
and
Revitalize
Launch
Brand
Extension
Increased
Revenue
and Net
Income

Questions

References
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References (Continued)
Hatok, Tony / Category Manager Frozen at Giant Eagle, Giant Eagle, Inc. Email communication and internal Pinnacle document regarding brand usage. 15 Oct. 2012
Hatok, Tony / Category Manager Frozen at Giant Eagle, Giant Eagle, Inc. Telephone Interview 6 Dec. 2012
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