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Our team served as sell side advisors by. deriving the intrinsic value of fictitious company using four valuation methods to create a cohesive slide deck that defined the firm’s market position.
We further examined the industrial filtration industry and proposed multiple potential strategic acquirers and financial sponsors.
Placed 1st out of 20 teams advising board members of a medical technology company on various strategic alternatives and maximizing shareholder value by utilizing discounted cash flow (DCF), precedent transactions, and comparable companies in a pitchbook presentation
15th Annual William Blair Investment Banking Case CompetitionRobertNahigian
Our team served as sell side advisors by. deriving the intrinsic value of fictitious company using four valuation methods to create a cohesive slide deck that defined the firm’s market position.
We further examined the industrial filtration industry and proposed multiple potential strategic acquirers and financial sponsors.
Placed 1st out of 20 teams advising board members of a medical technology company on various strategic alternatives and maximizing shareholder value by utilizing discounted cash flow (DCF), precedent transactions, and comparable companies in a pitchbook presentation
Conducted numerous valuation methodologies and thorough research for Steinkeller Solutions, a highly specialized staffing firm focused on Life Sciences, Technologies, Healthcare IT, and Energy. Assessed Bloomberg data, company financials, and company strategy to make an informed strategic sale recommendation to a sponsor to William Blair bankers.
William Blair Investment Banking Case Competition Jake White
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Was one of five teams to present in front of a panel of equity research analysts and associates. Pitched Mobileye (MBLY) stock as a buy with a 12 month price target of $70.00 with a 67% upside from its current share price. As of 9/9/2016, MBLY is up 31% since our pitch.
The 2013 Deloitte Undergraduate Case Competition challenged students to develop strategy, technology, and human capital recommendations for MAD HATS, a company that donates a hat to a person in need for each hat purchased by one of their customers.
This is a stock pitch for BlackBerry that was presented to faculty and investment professionals for the Cleveland Research Company Stock Pitch Competition in April 2017. My team's pitch was selected as one of the four finalist groups.
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Conducted numerous valuation methodologies and thorough research for Steinkeller Solutions, a highly specialized staffing firm focused on Life Sciences, Technologies, Healthcare IT, and Energy. Assessed Bloomberg data, company financials, and company strategy to make an informed strategic sale recommendation to a sponsor to William Blair bankers.
William Blair Investment Banking Case Competition Jake White
Performed comprehensive strategic analysis for a fictitious educational services provider to identify and evaluate potential exit opportunities that would position the company for strong future expansion. Constructed public comparables, precedent transactions, discounted cash flow and leveraged buyout analyses to form a valuation range.
Cleveland Research Company Stock Pitch Competition Finalist PresentationNick Meyerson
Finished in the top 5 teams, presented this slideshow to a panel of equity research analysts and associates, and fielded questions about Mobileye's capital structure, its share price's sensitivity to excitement in the media, and projections including a DCF analysis, comparables analysis, and multiple sensitivity analyses.
Was one of five teams to present in front of a panel of equity research analysts and associates. Pitched Mobileye (MBLY) stock as a buy with a 12 month price target of $70.00 with a 67% upside from its current share price. As of 9/9/2016, MBLY is up 31% since our pitch.
The 2013 Deloitte Undergraduate Case Competition challenged students to develop strategy, technology, and human capital recommendations for MAD HATS, a company that donates a hat to a person in need for each hat purchased by one of their customers.
This is a stock pitch for BlackBerry that was presented to faculty and investment professionals for the Cleveland Research Company Stock Pitch Competition in April 2017. My team's pitch was selected as one of the four finalist groups.
Comparison for the Supply Chains to Admire and the Gartner Top 25Lora Cecere
What is supply chain excellence? In this powerpoint, we analyze and compare two methodologies--The Supply Chains to Admire by Supply Chain Insights and the Gartner Top 25. There is no perfect method: both give insights. Note the differences in industry sectors and the gap in business leader perceptions when compared to corporate performance.
2016 Supply Chains to Admire - Report - 26 July 2016Lora Cecere
Executive Summary
Supply chain excellence is easier to say than define. To make progress, companies need to clearly define the journey and the goals. For many this is problematic. The goals are unclear and the financial metrics are not well-understood. We want to provide research to help supply chain leaders correct these issues.
Supply chain leaders want to improve results to drive shareholder value, but there is a problem. There is no industry standard definition of supply chain excellence or clarity on the how actions of the supply chain team drive shareholder value. In this report we try to help fill in the gaps by giving definitions to both.
The Supply Chains to Admire analysis is now in its third year. It is a deep analysis of performance, improvement, and Price to Tangible Book Value (PTBV) of 320 companies across 31 industries for the period of 2009-2015. The source data for the analysis is public reporting of balance sheets and income statements. (Our source of balance sheet and income statement data is YCharts .)
Accenture works with the leading agrochemical companies to annually benchmark supply chain and business performance. This report highlights the key findings and insights from our 2015 study, which focused on the quantitative aspects of performance within the crop protection segment.
2016 Supply Chains to Admire - Slide Deck - 20 July 2016Lora Cecere
The 2016 Supply Chains to Admire
Not all supply chains are equal. Similarly, not all rankings of supply chain performance are equal. In this webinar we will talk about the methodology used to rank the 2016 Supply Chains to Admire, and discuss the results with select winners from 2015 and 2016. Join us to understand how to improve your performance using quantitative methods and hear from winners how they have achieved their success.
Cleveland Research Company 2016 Stock Pitch Competition- Tempur Selay Finalist Alexander Liscum
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Supply Chains to Admire Analysis for 2019Lora Cecere
This analysis of 2010-2018 is a study of supply chain excellence for 515 public companies in 28 industries. Four percent of companies outperform their peer group while driving improvement. This is the sixth year of the analysis based on a study of growth, operating margin, inventory turns and Return on Invested Capital.
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Now in its eighth year, the Supply Chains to Admire methodology charts the progress of companies to drive financial results for their companies through their supply chain process. Companies that drive improvement while outperforming their peer group in the metrics of growth, margin, inventory turns, and Return on Invested Capital make it to the Winner's Circle. This year, there are 20 winners. Their stories are shared through case studies and presentations at the Supply Chain Insights Global Summit. The goal is to understand what makes a difference.
In this presentation, we share the industry results by industry along with the analysis of industry winners.
Optimizing Assortments by Focusing on Attribute-Based Demand PatternsG3 Communications
View the full webcast here: http://rtou.ch/2p7g5qg
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"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
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3. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Executive Summary
Potential Buyers
Valuation Ranges
Compelling
Story
Key
Financials
andValuation
Sell-Side
Advisory
Armstrong Foods is a leading distributor of
food & beverage products with forays into
restaurant products
Maintains market position with a proven
management team, strong brand recognition,
and a loyal customer base
Valuation analyses place Armstrong’s enterprise
value between $450mm — $480mm
2015E Revenue: $318.3mm
2015E EBITDA: $49.7mm
Historic 3 year EBITDA CAGR: (2.4%)
Analyses of past transactions and potential for
synergies leads to a recommendation of
pursuing a sale to a financial sponsor
A strategic buyer is viable as well, particularly if
they would consider retaining current
management
3
Sources: Company Financials, Team Projections
Enterprise Value (mm)
400 440 480 520 560 600
Comparable Companies (9.0x - 9.5x)
Precedent Transactions (8.6x - 9.1x)
DCF Perpetuity Growth (9.1x - 10.1x)
DCF Exit Multiple (10.5x - 11.4x)
Leveraged Buyout (8.9x - 9.8x)
5. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Industry Overview
The foodservice
distribution industry is
currently very
fragmented with no
single company
controlling more than
3% of the total market.
Additionally, there are
low barriers to entry.
Moderate revenue
growth in the food &
beverage industry,
combined with a low
volume environment
and a desire for
suppliers to innovate, is
placing downward
pressure on distributors
moving forward.
Armstrong is well-
positioned for the top
channels in the industry
and has potential to
move into the growing
segments
$200
$210
$220
$230
$240
$250
$260
$270
2009 2010 2011 2012 2013 2014 2015P
Billions
Foodservice Industry Growth
$87
$66
$27
$18
$18
$13
$0 $20 $40 $60 $80
LSR
FSR
Retail hosts
Travel and Leisure
Education
Healthcare
2015ETop Distributor Channels by Sales
Billions
Armstrong can succeed
in a low-growth
environment by
concentrating on high-
margin revenue segments
while gaining market
share
5
Sources: Sysco Investor Presentation, IBIS World
6. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Margins and Multiples
Distribution EBITDA Margins
CurrentTransaction Environment
There are currently strong multiples (relative to
historicals) being placed on high-quality companies
for several reasons
Few strong companies available
Vertical integration is being explored as an
option
M&A remains as one of the few ways to drive
growth in this industry
F&BTransaction Multiples
Distribution margins vary significantly by industry
Food service is very low at ~3% due to high costs
of raw materials
Armstrong is very well-positioned in the industry
with an EBITDA margin of ~18%
Distributors need to cut costs and continue to innovate
in order to remain competitive
Food Service Margins
14.8%
6.5%
3.2%
15.1%
5.1%
3.1%
5.8%
0.0%
4.0%
8.0%
12.0%
16.0%
Auto Building Food &
Consumer
Industrial Healthcare Technology Electrical
8.7x 8.5x 8.2x
9.7x
8.9x
12.6x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
2009 2010 2011 2012 2013 2014
EV/EBITDA EV/Sales
6
Sources: Harris Williams, Bloomberg
8. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Armstrong’s Profile
Armstrong Foods is a
leading distribution
company with a
nationwide network
focused primarily on
food & beverage and
restaurant products.
The Company is
moving to expand into
restaurant services to
maintain its strong
growth rate as well as
working to grow an
already large and
diverse customer base.
53.9%
25.4%
17.3%
3.5%
2015 Revenue Breakdown
Food Products
Beverage Products
Restaurant Supply Products
Restaurant Service
Superior margins
compared to competitors
While currently focused
on product sales,the
Company is pushing
service sales,which
should result in
increased margins in the
future
$50
$55
$59
$63
$70
$77
10%
12%
14%
16%
18%
20%
$40
$60
$80
2015E 2016P 2017P 2018P 2019P 2020P
Projected EBITDA Growth and Margins
EBITDA EBITDA Margin
Sources: Team Projections, Company Materials
8
9. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Customer and Product Diversification
Customer Philosophy
Armstrong focuses on building long-term
relationships with customers
Top 10 customers were responsible for 64.3% of
revenue in 2015
Potential to build relationships with schools and
universities and a larger number of individual
restaurants
Breakdown of Customer Base
Breadth of Products
60.5%
28.4%
8.9% 2.2%
Larger Chains
Grocery Stores
Family owned
International
Food Products
2013-2015E Sales
CAGR: (1.3%)
Beverage Products
2013-2015E Sales
CAGR: 3.7%
Restaurant Supplies
2013-2015E Sales
CAGR: 10.3%
Restaurant Service
2013-2015E Sales
CAGR: 40.0%
Packaged foods, fresh and organic foods, pre-
prepped meals
Packaged drinks, fountain drink machine refills,
kegs and alcohol for restaurants and bars
Flatware, linens, cleaning supplies
CO2 system service for carbonated beverages,
beverage system installation, appliance repair and
maintenance
Core Segments
Food
Products
Beverage
Products
Secondary Segments
Restaurant
Supplies
Restaurant
Services
9
Sources: Team Projections, Company Materials
10. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Positioning Analysis
W
TO
S
The Company boasts top-three rankings
in food products & restaurant products
Top management in the industry
Expansive distribution network
for restaurants and grocery
stores
Further expansion into the
high margin restaurant service
industry
Potential for relationships with
school and university customer bases
Strategic acquisition to supplement
current organic growth prospects
Armstrong’s biggest customer accounts
for 20.5% of 2015E sales
Net cash position does not make for an
optimal capital structure
Variable transportation costs
could swing upwards and
depress margins
Low barriers to entry and high
fragmentation lead to very
competitive landscape
Low switching costs pose threat
of lost customers
Low growth in core segments
10
Sources: Team Projections, Company Materials
13. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
($ in millions except per share data)
Company Name
Ticker &
Price
Market Enterprise LTM 2015E LTM EBITDA Enterprise Value
Exchange Cap Value EBITDA Revenue EBITDA Margin LTM EBITDA LTM Revenue 2015E EBITDA
Chefs' Warehouse, Inc., The CHEF US $15.35 409.4 719.8 44.1 918.1 72.6 4.9% 16.3x 0.8x 9.7x
Colabor Group, Inc. GCL CN $0.88 23.2 168.4 15.8 1,238.3 34.9 1.6% 10.7x 0.1x 6.9x
Core-Mark Holding Company, Inc. CORE US $80.05 1,844.8 1,979.1 110.6 10,618.7 153.4 1.0% 17.9x 0.2x 12.6x
Performance Food Group PFGC US $22.51 2,259.2 3,692.5 289.4 15,270.0 320.7 1.8% 12.8x 0.2x 10.5x
SpartanNash Company SPTN US $28.67 1,071.9 1,596.5 202.0 7,880.7 233.1 2.6% 7.9x 0.2x 6.7x
United Natural Foods, Inc. UNFI US $51.71 2,581.7 3,113.7 305.8 8,185.0 333.1 3.7% 10.2x 0.4x 9.3x
Armstrong Foods 49.7 318.3 49.7 15.6%
High 2,581.7 3,692.5 305.8 15,270.0 333.1 4.9% 17.9x 0.8x 12.6x
3rd Quartile 2,155.6 2,830.1 267.5 10,010.3 298.8 3.4% 15.4x 0.3x 10.3x
Median 1,458.3 1,787.8 156.3 8,032.8 193.3 2.2% 11.7x 0.2x 9.5x
Mean 1,365.0 1,878.3 161.3 7,351.8 191.3 2.6% 12.6x 0.3x 9.3x
1st Quartile 575.0 939.0 60.7 2,898.9 92.8 1.6% 10.3x 0.2x 7.5x
Low 23.2 168.4 15.8 918.1 34.9 1.0% 7.9x 0.1x 6.7x
Comparable CompanyAnalysis
Valuation Commentary ImpliedValuation
Armstrong Foods' 2015E EBITDA $49.7
Comparable Multiple Range 9.0x 9.5x
Enterprise Value Range $447.3 $472.9
Comparable companies derive majority of revenue from food &
beverage distribution in North America
Much of the industry is comprised of vertically
integrated food companies that operate from
manufacturing to distribution
2015E forward multiples better represent Armstrong’s valuation
13
Sources: Team Projections, Bloomberg
*as of October 29, 2015
14. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
PrecedentTransactionsAnalysis
($ in millions except per share data)
Target Company Acquirer
Transaction Announcement Transaction
Premium
Transaction Value
Type Date Value Revenue EBIT EBITDA
Michael Foods Group, Inc. POST Holdings, Inc. Strategic 4/17/2014 2,450.0 -- -- -- 9.5x
Allen Brothers, Inc. The Chefs' Warehouse, Inc. Strategic 12/11/2013 29.9 -- -- -- 7.0x
Nash Finch Company Spartan Company Strategic 7/22/2013 688.1 0.8% 0.1x 11.7x 6.9x
T&G Global LTD BayWa AG Strategic 3/9/2012 241.6 11.2% 0.6x 18.4x 9.6x
Skor Food Group, Inc., The Colabor Group, Inc. Strategic 3/22/2011 35.6 91.9% 0.2x 8.6x 6.7x
Michael Foods Group, Inc. Goldman Sachs Capital Sponsor 5/20/2010 1,568.8 -- 1.7x 16.7x 11.8x
High 1.7x 18.4x 11.8x
3rd Quartile 0.9x 17.1x 9.6x
Median 0.4x 14.2x 8.3x
Mean 0.7x 13.8x 8.6x
1st Quartile 0.2x 10.9x 7.0x
Low 0.1x 8.6x 6.7x
ImpliedValuationValuation Commentary
Armstrong Foods' 2015E EBITDA $49.7
Precedent Multiple Range 8.6x 9.1x
Enterprise Value Range $427.4 $452.3
14
Sources: Team Projections, Bloomberg, Harris Williams
Numerous precedent transactions were strategic acquisitions by
comparable companies
Lack of recent deals lead to depressed multiples
Multiple expansion in past 18 months
15. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Discounted Cash Flows Analysis
ImpliedValuation
Perpetuity Growth Method
Perpetuity Growth Rate 2.75%
Terminal Value 553.2
PV of Terminal Value 351.5
Plus: PV of Future FCF 115.5
Enterprise Value 467.0
Exit Multiple Method
Exit Multiple 9.0x
Terminal Value 690.5
PV of Terminal Value 438.8
Plus: PV of Future FCF 115.5
Enterprise Value 554.2
WACC Calculations
Capital Structure
Debt 35.1
Market Value of Equity 536.7
Beta* 0.93
Equity Risk Premium 6.6%
Size Premium 1.6%
Risk Free Rate 2.0%
Cost of Equity 9.8%
Pretax Cost of Debt* 7.0%
Tax Rate 37.5%
Cost of Debt 4.4%
WACC 9.5%
* Using comparables
Valuation Commentary
Growth assumptions
Revenue growth peaks in 2017 at 6.6%
Normalized margins
Comparable assumptions
Beta was calculated from unlevering then relevering
comparable betas
Cost of debt was estimated using debt comparables
15
Sources: Team Projections, Bloomberg
($ in millions) Estimated Projected
2015E 2016P 2017P 2018P 2019P 2020P
EBITDA 49.7 54.5 58.9 63.3 70.3 76.7
Less: D&A 15.9 16.7 17.8 18.2 19.2 20.1
EBIT 33.8 37.8 41.1 45.2 51.1 56.6
Tax Effect @ 37.5% 12.7 14.2 15.4 16.9 19.2 21.2
NOPAT 21.1 23.6 25.7 28.2 31.9 35.4
Add: D&A 15.9 16.7 17.8 18.2 19.2 20.1
Less: CapEx 12.5 12.6 13.4 15.1 16.8 18.4
Less: Acqusition Costs 0.0 0.0 0.0 0.0 0.0 0.0
Less: Changes in NWC 2.6 2.3 0.9 1.0 0.7
Free Cash Flow 25.1 27.8 30.4 33.3 36.3
PV of FCF 22.9 23.1 23.1 23.2 23.1
16. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Leveraged Buyout Analysis
SensitivityAnalysisValuation Commentary
Strong, consistent cash flows make Armstrong a good target
for an acquisition by a financial sponsor
Low capital expenditures drive cash available for debt
repayment
Transaction assumptions:
Purchase Multiple: 9.3x
Exit Multiple: 9.3x
Investment horizon of 5 years
Exit Multiple
8.3x 8.8x 9.3x 9.8x 10.3x
SponsorTarget
IRR
15.0% 478.1 496.9 515.7 534.6 553.4
17.5% 454.8 471.7 488.6 505.5 522.4
20.0% 434.3 449.5 464.7 479.9 495.1
22.5% 416.2 429.9 443.6 457.3 471.0
25.0% 400.1 412.5 424.9 437.3 449.7
16
Sources: Team Projections, Bloomberg
Capital Structure Assumptions
Interest Rates
Revolver L+ 175 bps
Term Loan A L+ 340 bps
Subordinated Note 7.6%
Principal Repayment Rates
(per Annum)
Revolver N/A
Term Loan A 5.0%
Subordinated Note 0.0%
0
200
400
600
800
2016P 2017P 2018P 2019P 2020P
Equity Debt
% of
Total Ratio
Leverage Ratio 5.5x
Revolver 0.0% 0.0x
Term Loan A 63.6% 3.5x
Subordinated Note 36.4% 2.0x
Check 100.0% 5.5x
(inmillions)
18. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Potential AcquisitionTargets
Industry:
Financials:
Rationale:
Distributor of OEM repair and
maintenance equipment for the
restaurant and foodservice industry
No Financials
Food distributor that focuses on specialty
foods. Provides perishable products from
vendors to restaurants and other clients
$42.5m Revenue
$19.3m Market Cap
($6.65m) EBITDA
PartsTown would provideArmstrong
Foods with additional exposure to the
restaurant services segment, where
they command high margins. Parts
Town is currently a portfolio
company of Summit Partners, who
would be looking for an exit in 2017,
after their principle investment in
2013.
Innovative Food Holdings would
allowArmstrong to diversify their
food product distribution offerings.
IFH has major contracts with US
Foods, this mismanaged company
would be a solid acquisition at a
reasonable price.
18
Sources: Bloomberg, Google, Company Websites
20. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Strategic Buyer Universe
Description RationaleMetrics
LTM Revenue:
$8,185mm
Market Cap:
$2,695mm
Privately Held
Privately Held
Privately Held
Privately Held
TriMark delivers foodservice
supplies and equipment on a
national scale to primarily the
restaurant industry.
Food Services of America is a
family owned foodservice
distributor operating in the
west and Midwest.
United Natural Foods is an
industry leading distributor of
organic and other nutritional
foods.
Gordon Food Service is the
largest broadline foodservice
distributor in the US. They
serve restaurants, schools, and
the healthcare system.
Reinhart FoodService
distributes a wide range of
branded foods as well as
provides services for its diverse
client base.
Reinhart has the size to acquire Armstrong, and has
complementary operations. They also have access to key
end-markets including the healthcare and education
industries that are untapped by Armstrong.
Gordon would offer Armstrong a customer base in new end-
markets and boasts the strong consumer brands that fit with
existing product lines. Gordon also has the value-add
services that Armstrong is expanding into.
United Natural Foods would enable Armstrong to grow its
business substantially in the organic sector. UNFI’s
experience with the acquisition of Trudeau Distributing
Company would also offer a number of advantages.
Food Services of America has the requisite size and capital to
finance Armstrong’s future growth endeavors. FSA also has
the extensive distribution experience to make the acquisition
mutually beneficial.
TriMark has market-leading expertise in kitchen equipment
and foodservices. They would enable Armstrong position
itself better in the high growth restaurant equipment and
services sectors.
20
Sources: Bloomberg, Google, Company Websites
21. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Financial Sponsors Universe
Criteria Rationale
Revenue < $300mm
EBITDA $5mm - $50mm
Revenue < $300mm
Castle Harlan
EV < $1B
EV < $1B
EBITDA < $200mm
Arbor Investments focuses exclusively on middle-market food & beverage
companies.Arbor has experience in the food distribution industry and a number
of currently held companies that could offer synergy opportunities.
Swander Pace Capital looks to partner with the management teams of middle-
market firms who can provide synergies to their current holdings.Their portfolio
includes beverage, branded foods, foodservice, and specialty distribution
companies.
Castle Harlan targets middle-market firms with moderate growth profiles.They
currently hold Gold Star Foods, the leading food distributor for schools in the
southwest. Castle Harlan also owns a distributor of books, videos, and music
products, further demonstrating their relevant experience.
TSG Consumer Partners looks for companies with a conservative capital structure
who have a competitive advantage in their distribution channels.Their current
portfolio boasts a variety of branded foods & beverages, as well as a restaurant
segment.
21
Sources: Bloomberg, Google, Company Websites
22. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Financial Sponsors (cont.)
Criteria Rationale
Revenue $50mm-$1.5B
EV $50mm-$500mm
EV < $500mm
EV < $2B
Sun Capital Partners is extremely active in the food & beverage space and looks
for companies that need growth capital.They have an extensive portfolio of both
restaurants and branded foods & beverages.
H.I.G. Capital seeks to partner with experienced management teams to add value
through portfolio synergies.Their current holdings include a focus on specialty
distribution and the food & beverage industries.
Brynwood Partners targets companies that operate in niche sections of the
middle-market.Their current portfolio consists of firms who are in the
production and distribution of packaged foods.
Olympus Partners has a team approach that spans a number of target industries.
One such industry is the consumer and restaurant space with holdings in fast food
franchises and branded foods.
22
Sources: Bloomberg, Google, Company Websites
23. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Selected Buyers
Arbor has extensive experience in food & beverage companies that operate in several stages of
the overall supply chain.The firm has managed food manufacturers, food distributors and
packagers, and food retailers.Additionally,Arbor currently maintains a broad portfolio that
would allow for potential synergies. Because they operate companies in many parts of the supply
chain, it may be possible for greater synergies to be realized than in a more singular transaction.
Some portfolio companies are shown below.
Reinhart represents the best strategic buyer for a number of reasons.They have the strong
branded food & beverage products to push through existing distribution channels, as well as the
expertise with restaurant equipment and services that Armstrong needs to grow their burgeoning
segments. Reinhart’s size would make this acquisition possible, and there would be significant
potential synergies as a result of the transaction. Some brands are shown below.
23
Sources: Bloomberg, Google, Company Websites
25. Executive
Summary
Industry Drivers Company
Overview
Valuation
Analysis
Strategic
Options
Final Thoughts
Recommendation
Strategic vs. Sponsored
Final Recommendation
We recommend thatArmstrong Foods engages in a
sale to Arbor Investments
Expertise in the food & beverage industry and high
potential synergies with portfolio companies
We believe that this route represents the greatest value
forArmstrong Foods
Implied valuation range of $450 — $480mm
A sale to a sponsored buyer offersArmstrong a
number of advantages
Broadest range of experiences within the food &
beverage industry
Synergies with both upstream and downstream portfolio
companies
Strategic buyers typically get rid of the existing
management team: one of Armstrong’s greatest assets
Acquisition Recommendation
25
Sources: Team Projections, Company Websites
Appropriate size and
improvement opportunities
Strong product offerings to
diversify Armstrong’s
distribution
Enterprise Value (mm)
400 440 480 520 560 600
Comparable Companies (9.0x - 9.5x)
Precedent Transactions (8.6x - 9.1x)
DCF Perpetuity Growth (9.1x - 10.1x)
DCF Exit Multiple (10.5x - 11.4x)
Leveraged Buyout (8.9x - 9.8x)