ALCOHOLIC BEVERAGE MONTHLY DASHBOARD MARCH 2018 STRATEGIC & CAPITAL ADVISORY FOR CONSUMER COMPANIES

Transcription

1 ALCOHOLIC BEVERAGE MONTHLY DASHBOARD MARCH 2018 STRATEGIC & CAPITAL ADVISORY FOR CONSUMER COMPANIES

2 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Page 2 PUBLIC COMPANY STOCK PERFORMANCE TWELVE MONTHS ENDING MARCH 31, 2018 CRAFT BREWERS, LARGE BREWERS AND WINE & SPIRITS VS. S&P 500 INDEX ALCOHOLIC BEVERAGE RELATIVE SUBSECTOR STOCK PERFORMANCE 0.0% 35.0% 30.0% 25.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% 30.1% 21.1% 11.8% 30.0% 25.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% 26.7% 18.5% 1.3% 11.8% -2.9% -3.9% -8.9% -10.1% S&P 500 Craft Brewers % -18.% Large Brewers Wineries & Distillers Note: Market-weighted index from Cody Peak Advisors' Alcoholic Beverage Index TOP PERFORMING ALCOHOLIC BEVERAGE STOCKS BY SUBSECTOR 62.1% 1.6% 7.2% Craft Brewers Large Brewers Wine & Spirits EXCHANGE LISTED COMMODITY TRENDS MONTHLY AVERAGE Commodity Current Price 1 Month 1 Year 2 Year 52 Week Range Aluminum, LME, $ per metric ton $ $2, $1, $1,78.00 $1, $2,26.00 Corn, No. 2 yellow. Cent. Ill. bu-bp,u $3.53 $3.55 $3.39 $3.2 $3.13 $3.55 Rice, Long Grain Milled, No. 2 AR-U,W $25.75 $25.50 $20.25 $22.75 $25.75 $20.25 $25.75 Raw sugar FOB, $/metric ton-k $27.3 $ $ $ $27.30 $ Wheat, No. 1 soft white, del Portland, Ore-U $5.50 $5.58 $.55 $5.22 $.55 $5.58 Source: Wall Street Journal

3 Page 3 RELATIVE TRAILING 12-MONTH VALUATION MULTIPLES FOR ALCOHOLIC BEVERAGE COMPANIES EV / REVENUE RELATIVE SUBSECTOR VALUATION MULTIPLES EV / EBITDA RELATIVE SUBSECTOR VALUATION MULTIPLES 7.0x 25.0x 6.0x 6.0x x 5.0x.0x 15.0x 15.5x 13.6x 3.0x 2.0x 2.2x 1.9x 1 1.0x 5.0x Wineries & Distillers Large Brewers Craft Brewers Wineries & Distillers Craft Brewers Large Brewers TRAILING 12-MONTH VALUATION MULTIPLES FOR PUBLIC ALCOHOLIC BEVERAGE COMPANIES Market Data (Given in $Millions) Price 1 Yr Est. Price Performance Equity Firm Growth EV / LTM EBITDA Company ($ mm) Ticker 03/31/18 LTM Value Value Rate Sales EBITDA Margin Craft Brewers Big Rock Brewery Inc. TSX:BR $ % $26 $31 NA 0.8x NM 3.8% The Boston Beer Company, Inc. NYSE:SAM % 2,176 2, % 2.x 12.5x 19.6% Brick Brewing Co. Limited TSX:BRB % % 3.2x 18.x 17.6% BJ's Restaurants, Inc. NASDAQGS:BJRI % 921 1,060.5% 1.0x 9.x 10.9% Craft Brew Alliance, Inc. NASDAQGS:BREW % % 1.9x 23.x 8.1% Average 2.8%.2% 1.9x 15.9x 12.0% Median 30.7% 3.9% 1.9x 15.5x 10.9% Large Brewers Anheuser-Busch InBev SA/NV ENXTBR:ABI $ % $212,690 $329, % 5.8x 15.3x 38.0% Asahi Group Holdings, Ltd. TSE: % 2,5 35,852 NA 1.9x 13.9x 13.9% Heineken N.V. ENXTAM:HEIA % 61,326 78,907 NA 3.0x 1.0x 21.5% Kirin Holdings Company, Limited TSE: % 2,339 29, % 1.8x 13.2x 13.7% Molson Coors Brewing Company NYSE:TAP % 16,256 27, % 2.5x 10.x 23.9% Sapporo Holdings Limited TSE: % 2,27,7 NA 0.9x 11.3x 8.1% Average 16.0%.5% 2.7x 13.0x 19.9% Median 17.1% 2.5% 2.2x 13.6x 17.7% Wineries & Distillers Brown-Forman Corporation NYSE:BF.B $ % $25,76 $27, % 8.5x 23.1x 36.8% Constellation Brands, Inc. NYSE:STZ %,19 5,532 7.% 7.2x 19.1x 37.7% Diageo plc LSE:DGE % 83,056 98, % 6.0x 18.1x 33.1% Pernod Ricard SA ENXTPA:RI % 3,99 53,322 NA.9x 17.0x 28.9% Rémy Cointreau SA ENXTPA:RCO % 7,123 7,656 NA 5.8x 25.1x 22.9% Average 38.% 9.1% 6.5x 20.5x 31.9% Median 0.6% 9.0% 6.0x 19.1x 33.1% Source: Public company documents NA Not available NMF Not meaningful figure EBITDA Earnings before interest, taxes, depreciation & amortization Enterprise Value Market value of equity + interest-bearing debt - cash

4 Page MERGERS & ACQUISITIONS OVERVIEW ALCOHOLIC BEVERAGE M&A ACTIVITY BY SUBSECTOR* YTD 2018 Chart Source: Capital IQ & Cody Peak research Wineries Distilleries Breweries MEDIAN ALCOHOLIC BEVERAGE REVENUE MULTIPLES BY SUBSECTOR* MEDIAN ALCOHOLIC BEVERAGE EBITDA MULTIPLES BY SUBSECTOR* 3.0x 2.5x 2.0x 2.8x 2.8x 2.2x 1.2x 1.0x 13.8x 13.6x 1.0x 13.7x 1.5x 1.0x 0.5x 13.x 13.2x 13.0x 12.8x 13.2x Breweries Distilleries Wineries 12.6x Distilleries Wineries Breweries Note : Median from Note : Median from HIGHLIGHTED 2018 ALCOHOLIC BEVERAGE M&A TRANSACTIONS Target: Tsingtao Brewery Limited Buyer: Fosun Capital Transaction Value: $1,081.5 TV / Rev: 0.3x TV / EBITDA: 2.6x Fosun Capital acquired 20% stake in Tsingtao Brewery from Asahi Group Holdings for $1.08 billion. Asahi is withdrawing from China and will refocus its efforts on other geographic markets Tsingtao Brewery is China s second largest brewer and has successfully penetrated international markets Fosun s business model and global reach will help grow Tsingtao s brand and tap into Chinese demand for more premium beers Target: Fenglian Wine Holdings Buyer: Legend Holdings Transaction Value: $211.0 TV / Rev: 1.2x TV / EBITDA: NA Legend Holdings completed the acquisition of Fenglian Wine Holdings in April 2018 Legend holdings is a large conglomerate with investments in information technology, financial service and agriculture and food Fenglian Wine Holdings will be folded into Legend Holdings liquor subsidiary, Hebei Hengshui Laobaigan Liquor

5 Page 5 SELECT ALCOHOLIC BEVERAGE TRANSACTIONS Closed Date Target/Issuer Total Transaction Value ($mm) Transaction Type Buyers Subsector Target Business Description 03/30/2018 Anheuser-Busch - M&A Anadolu Efes Biracilik ve Brewery Malt Sanayii Anonim Sirketi (IBSE:AEFES) 03/30/2018 California & Nebraska Operations of Green Flash Brewing Co. Anheuser-Busch InBev SA/NV, Russia and Ukraine Business comprises production and distribution of beer. The asset is located in Russia. - M&A Muirlands Capital LLC Brewery California & Nebraska Operations of Green Flash Brewing Co. comprises brewing operations and are located in the United States. 03/29/2018 Sula Vineyards Pvt. Ltd. $39.3 M&A Undisclosed Winery Sula Vineyards Pvt. Ltd. produces and exports white, red, rose, and sparkling wines in India and internationally. 03/28/2018 Liverpool Organic Brewery Ltd - M&A Circus Holdings Limited Brewery As of March 28, 2018, All Assets of Liverpool Organic Brewery Ltd were acquired by Circus Holdings Limited. 03/26/2018 Winery in Portugal $.6 M&A Undisclosed Winery Winery in Portugal produces wine products. The asset is located in Portugal. 03/23/2018 Fenglian Wine Holdings Limited 03/23/2018 Hardywood Park Craft Brewery, LLC $211.0 M&A Hebei Hengshui Laobaigan Liquor Co., Ltd. (SHSE:600559) Winery Fenglian Wine Holdings Limited produces wine. The company was founded in 2012 and is based in China. As of March 23, 2018, Fenglian Wine Holdings Limited operates as a subsidiary of Hebei Hengshui Laobaigan Liquor Co., Ltd. $1.3 M&A Undisclosed Brewery Hardywood Park Craft Brewery, LLC operates as a brewery. The company was founded in 2011 and is based in Richmond, Virginia. 03/20/2018 Finest Made Ales - M&A Council Brewing Company, LLC 03/19/2018 Tsingtao Brewery Company Limited (SEHK:168) 03/19/2018 Wetherall Coonawarra Vineyards 03/15/2018 Saigon Beer - Alcohol - Beverage Corporation (HOSE:SAB) 03/1/2018 Broken Shed Distilleries, Inc. $1,081.5 M&A Fidelidade - Companhia de Seguros, S.A.; Star Insurance Company; - M&A Treasury Wine Estates Limited (ASX:TWE) Brewery Brewery Winery $13.6 M&A Dragon Capital Group Brewery Limited; Vietnam Enterprise Investments Limited Finest Made Ales offers craft beer brewery services. The company was founded in 2016 and is based in Santee, California. As of March 20, 2018, Finest Made Ales operates as a subsidiary of Council Brewing Company, LLC. Tsingtao Brewery Company Limited, together with its subsidiaries, engages in the production, distribution, wholesale, and retail sale of beer products primarily in the People's Republic of China. As of March 19, 2018, Wetherall Coonawarra Vineyards were acquired by Treasury Wine Estates Limited. Wetherall Coonawarra Vineyards comprises vineyards that produce wine. The assets are located in Australia. Saigon Beer - Alcohol - Beverage Corporation, together with its subsidiaries, produces and sells beer, alcohol, beverages, and related materials and packaging products in Vietnam. $0. M&A Undisclosed Distillery Broken Shed Distilleries, Inc. manufactures Vodka. TBroken Shed Distilleries, Inc. was incorporated in 2016 and is based in Southport, Connecticut with additional offices in Rhode Island, California, and New Zealand. Sources: Capital IQ / Cody Peak M&A database ABOUT CODY PEAK ADVISORS CONTACT Cody Peak Advisors is an independent strategic and capital advisory firm that focuses exclusively on the consumer sector. Our senior professionals have completed over 100 transactions with an aggregated value in excess of $7 billion. We have a successful track record of helping middle market branded and non-branded consumer manufacturing, marketing and distribution companies strategically unlock and enhance value through mergers, acquisitions and financings. Cody Peak Advisors, LLC 201 Continental Blvd, Suite 200 El Segundo, California Robert J. Parzick Managing Director bparzick@codypeakadv.com Jacques A. Perrone Managing Director jperrone@codypeakadv.com This report is for information purposes only and is not intended as an offer or solicitation with respect to any purchase or sale of any security. Cody Peak Advisors, LLC gathers its data from sources it considers reliable; however, it does not guarantee the accuracy of completeness of the information provided within this publication. The opinions presented herein reflect the current judgment of the authors and are subject to change. Cody Peak Advisors, LLC makes no warranties, expressed or implied, regarding the accuracy of this information or the subjective opinions expressed by the authors. Cody Peak Advisors, LLC, its officers, directors and partners may at any time have positions in the securities of the companies discussed herein. Copyright 2018 Cody Peak Advisors, LLC., all rights reserved. April 2018