Food & Beverage Report Q2 2016 - SDR Ventures

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FOOD & BEVERAGEREPORTQ2 2016Explore M&A Activity, Capital MarketConditions and Current Trends for theFood & Beverage Industry720.221.9220 SDRVENTURES.COMInvestment Banking & Securities Offered Through SDR Capital Markets, Inc., Member FINRA & SIPC.

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTQ2 INDUSTRY UPDATEIn 1957, applied mathematician and UCLA marketing professor Igor Ansoffintroduced a concept called the Ansoff Matrix. The Ansoff Matrix was designedto visualize the strategy in which companies formulate products to entermarkets. The purpose of the matrix was to give management teams the abilityto think strategically about the potential risks and returns on various growthstrategies.The characteristics of each quality are explained below: Market Penetration Quadrant:Least risky because product andmarket fit already have beenproven/established. Least returnbecause the lack of risk creates alow barrier to entry, meaninglots of competition. Usually acommodity/price-driven marketwhere players who compete onprice and capitalization win. Market Development andProduct DevelopmentQuadrants: Incrementally morerisk and return because either the product or the channel has been proven,but not both. Incrementally more return because something special orinnovative must be done to create a new product or enter a new market. The Diversification Quadrant: Riskiest because the company is not justtrying to acquire market share, but it’s also trying to create a new marketaltogether. There is no proof that existing channels for the product evenexist.Over the past five years, we have observed rapid venture capital investmentand M&A activity in the diversification and product development quadrants,where innovation is derived from the conscious consumer demand forhealthier, more functional, simpler, and allergen-free ingredients. Theseinnovations started in many cases 25 years ago, but the rate at which consumerdemand has accelerated toward these product features has rapidly outpacedthe innovation cycles at large for food & beverage companies. This has createdfertile ground for M&A activity.Catalina’s 2015 mid-year review revealed a dramatic loss in share across nearlyall categories by top 100 CPG brands. It is clear that the strategy for largeentities in this 1.2-trillion industry has shifted from “Market Penetration” tothe other three quadrants. Consumers rapidly are shifting to new markets, andto keep up the large players must either innovate quickly or acquire companiesthat are doing so.CONTENTSTransaction ActivityActive BuyersPublic BasketM&A Market ActivityAbout SDR VenturesABOUT SDREstablished in 2002, SDR Ventures hasdeveloped deep M&A and capitaltransaction knowledge and expertise.SDR offers transaction advisory, privatecapitalformationandbusinessconsulting services across a wide rangeof industries. We serve business ownersand operators of privately heldcompanies and provide them with aprofessional-class experience.FOOD & BEVERAGECONTACTSTravis ConwayManaging Director –Food & Beverage Team720.221.9220tconway@sdrventures.comBen RudmanDirector –Food & Beverage Team720.221.9220brudman@sdrventures.comEric BosveldDirector –Food & Beverage Team226.777.3078ebosveld@sdrventures.comThe information contained herein is based on sources we believe reliable but is not guaranteed by us and is not to be considered all-inclusive. It is notto be construed as an offer or consultation of an offer to sell or buy any securities.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.2

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTTop 100 CPG Brands Change in Sales vs. CategoriesCoffeeHBCSoft DrinksDairyGroceryCandy and SnacksRefrigerated MeatsPaperCrackers, Cookies, 0%-2.50%Top off, I.: Strategies for Diversification, Harvard Business Review, Vol. 35 Issue 5,Sep-Oct 1957, pp. studies/Hormel has led the charge on the M&A front by acquiring Applegate and Justin’s, each of which brings new products to thechannels in which Hormel already occupied major shelf space (we would classify both of these acquisitions as “ProductDevelopment” strategies). The Applegate valuation reflected the premium that Hormel paid (2.3x revenue is large for abusiness with approximately 330 million of sales at the time). Applegate’s accomplishments in supply chain and productdevelopment innovation were rewarded by a differentiated presence as the leading natural and sustainable brand in the proteincategory.Krave seems to be a product that has crossed into the Diversification Quadrant. Krave not only brought an existing product intonew markets (i.e., jerky to the masses), it created an entire sub-category: the premium jerky category. It brought jerky to peoplewho would not normally eat jerky at all. This leadership was a catalyst for the emergence of the meat snack category to erupt,which is part of the reason why every major retailer has an entire set in its snack aisle. So, what was its reward for building outthis new customer set? Krave sold for 6.9x revenue to Hershey’s as Hershey’s sought to unlock vast new horizons with thisproduct line.What does this mean today for SDR’s clients and their peers? The most attractive businesses for investment or sale in the foodspace are those that unlock the shifting customers alluded to in chart above for the large strategic buyers. For example, KhoslaVentures, 301 (General Mills’ VC arm) and CAVU Venture Partners just made an 18-million investment in the fast-emergingplant based dairy brand Kite Hill. Currently, there are entire product categories that dairy-free consumers do not access, butKite Hill is unlocking that customer set in the category.Similarly, Amplify Brands just acquired snack bar brand Oatmega, a product that is in an existing category but aligns well withAmplify’s portfolio (and thus distribution footprint), making the acquisition a Market Development play for Amplify.As consumer preferences complete the shift to healthier, artisanally-crafted, simpler and more sustainable products, companiesthat bring new products or access to new customers for existing products will be the most highly favored by investors andacquirers.The information contained herein is based on sources we believe reliable but is not guaranteed by us and is not to be considered all-inclusive. It is notto be construed as an offer or consultation of an offer to sell or buy any securities.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.3

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORT604020TRANSACTIONS BY TYPETRANSACTIONS BY urce: S&P Capital IQTRANSACTIONS BY LOCATION11 or more transactions6-10 transactions1-5 transactions0 transactionsSource: S&P Capital IQTRANSACTION ACTIVITYDateAmount( in t6/30/2016The Hershey CompanyCPG Foods6/27/2016Milk Specialties CompanyMondelez International,Inc.American SecuritiesDairy---6/17/2016Ceres, Inc.Land O Lakes Inc.Dairy111.64-6/14/2016Wm. Wrigley Jr. CompanyMars, IncorporatedCPG Foods50--6/9/2016Brooks Peanut Company, Inc.Olam International Limited Produce85--6/2/2016The Ridgefield's Brand CorporationCountry Pure Foods, Inc.CPG Foods141.07-5/23/2016Givaudan SAIngredients & Flavors340--5/23/2016Conagra Foods Food IngredientsCompany, Inc.B.T.T.R Ventures LLCProduce10--5/18/2016Monsanto CompanyRed Sea Ventures; S2GVentures; Acre VenturePartnersBayer AG4.4815.325/18/2016Justin's, LLCHormel Foods Corporation Natural & Organic Foods--Ingredients & FlavorsACCESS FULL LIST25,47162,322286Source: S&P Capital IQNote: These data represent recorded transactions only, and are not all-inclusive. Nevertheless, they are typically representative of the industry.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.4

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTACTIVE BUYERSMOST ACTIVE STRATEGIC BUYERSStrategic BuyerE. & J. Gallo Winery, Inc.Inv. DatesSelect Corporate /20145/18/20165/26/20156/30/2014 Orin Swift Cellars, LLCRutherford Wine Studios, LLCTalbott VineyardsAsti WineryJ Vineyards & Winery LLCBreckenridge Brewery, LLCGolden Peaks Brewing10 Barrel Brewing CompanyBudweiser of OwensboroMorgan Distributing, IncJustin's, LLCApplegate Farms LLCCytoSport, Inc.McCormick & Company, Incorporated(NYSE:MKC)4/19/20166/24/20153/9/2015 Botanical Food Company Pty Ltd.One World Foods, Inc.Brand Aromatics, Inc.Amplify Snack Brands, Inc. (NYSE:BETR)5/2/20164/21/2015 Boundless Nutrition, LLCPaqui, LLCAnheuser-Busch Companies, LLCHormel Foods Corporation (NYSE:HRL)SELECT SPONSORS WITH ACTIVE PORTFOLIO HOLDINGSFinancial BuyersInv. DateSelect HoldingsTSG Consumer Partners7/29/2015 My Fit Foods Inc.9/28/2014 SweetWater Brewing Company, LLCKarpReilly LLCKainos Capital, LLCEncore Consumer CapitalL Catterton11/13/2014 Pabst Brewing Company, LLC6/6/2011 Stumptown Coffee Roasters, Inc.10/5/2010 Julian's Recipe, LLC7/19/2016 LifeAID Beverage Co. LLC3/8/2016 Hungryroot, Inc.7/24/2015 Fitlife Foods Tampa, LLC7/13/2015 Taylor Gourmet, LLC5/11/2015 Eureka! Restaurant Group, LLC12/31/2007 Advanced Refreshment LLC9/8/2014 JTM Foods, LLC8/21/2015 Kettle Cuisine, LLC7/10/2014 Slim-Fast Brand8/7/2015 Trilliant Food & Nutrition3/31/2015 THANASI Foods, LLC3/9/2015 Full Sail Brewing, Inc.1/20/2015 Van Law Food Products, Inc.10/10/2008 Atlantic Aqua Farms, Inc.5/23/2008 Ciao Bella Gelato Company, Inc.12/22/2015 The Piada Group, LLC7/30/2015 Lily's Kitchen Limited7/14/2015 Snap Kitchen LLC6/22/2012 Edible Arrangements, LLC10/3/2013 PB Restaurants, LLCSource: S&P Capital IQSource: S&P Capital IQNote: These data represent recorded transactions only, and are not all-inclusive. Nevertheless, they are typically representative of the industry.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.5

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTPUBLIC BASKETFOOD & BEVERAGE SEGMENTS VS. S&P 500Running 12 lcoholic BeveragesNon-Alcoholic BeveragesCPG Foods (includes snacks)Natural & Organic FoodsDairyProteinsProduce/AgribusinessIngredients & FlavorsCo-PackersS&P 500 IndexSource: S&P Capital IQALCOHOLIC BEVERAGESCompany NameSymbolStateMarket Cap ( in Mil)Stock PriceQuarter ChangePriceYTD ChangePrice/LMT Price/ TEV/TEV/EPSBook Rev EBITDAAnheuser-Busch InBev SA/NV ENXTBR:ABIN/A 189,129 1187.6%3%42.8x5.1x6.1x16.2xSABMiller plcN/A 70,385 442.7%7%39.7x4.4x7.6x18.7xLSE:SABDiageo plcLSE:DGEN/A 52,353 2110.9%12%32.3x6.4x6.0x18.4xConstellation Brands Inc.NYSE:STZNY 33,178 1659.5%16%31.7x4.8x6.1x18.1xMolson Coors BrewingCompanyBrown-Forman CorporationNYSE:TAPCO 21,711 1015.1%8%39.4x2.2x6.3x18.9xNYSE:BF.BKY 20,348 1001.3%0%32.5x12.6x7.0x19.5xThe Boston Beer Company,Inc.MGP Ingredients Inc.NYSE:SAMMA 2,168 171-7.6%-15%25.3x4.9x2.2x11.1xNasdaqGS:MGPIKS 638 3857.7%47%24.6x5.2x2.1x12.2xCraft Brew Alliance, Inc.NasdaqGS:BREWOR 221 1240.0%38%NM1.9x1.2x22.8xCastle Brands Inc.AMEX:ROXNY 118 1-22.1%-40%NM5.8x2.1x68.0xWillamette Valley VineyardsInc.Truett-Hurst, Inc.NasdaqCM:WVVIOR 42 821.2%19%19.4x1.8x2.6x10.2xNasdaqCM:THSTCA 7 2Segment Average 2x22.4xSource: S&P Capital IQNote: These data represent recorded transactions only, and are not all-inclusive. Nevertheless, they are typically representative of the industry.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.6

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTPUBLIC BASKET (CONTINUED)NON-ALCOHOLIC BEVERAGESCompany NameSymbolStateMarket Cap( in Mil)Stock PriceQuarter ChangeYTD Change 1691.4%5%PricePrice/ Price/ TEV/TEV/LMT EPS Book Rev EBITDAFomento EconómicoMexicano, S.A.B de C.VThe Coca-Cola CompanyBMV:FEMSA UBDNL 573,934NYSE:KOGA 196,107 45-2.3%6%29.1x7.9x5.0x17.4xPepsico, Inc.NYSE:PEPNY 153,022 1063.4%6%28.3x13.6x2.8x14.6xMonster BeverageCorporationDr Pepper Snapple Group,Inc.Treehouse Foods, Inc.NasdaqGS:MNSTCA 32,631 16120.5%8%51.8x6.5x10.7x28.3xNYSE:DPSTX 17,955 978.1%4%24.0x8.6x3.3x13.2xNYSE:THSIL 5,793 10318.3%31%37.6x2.1x2.4x20.7xThe Hain Celestial Group,Inc.National Beverage Corp.NasdaqGS:HAINNY 5,147 5021.6%23%29.7x2.8x2.1x16.0xNasdaqGS:FIZZFL 2,924 6348.4%38%55.3x14.8x4.1x29.2xCott CorporationTSX:BCBFL 2,454 180.1%19%260.2x2.2x1.2x10.0xSodaStream InternationalLtd.Primo Water CorporationNasdaqGS:SODAN/A 450 2151.5%31%38.7x1.3x1.1x12.9xNasdaqGM:PRMWNC 305 1217.0%48%118.6x11.3x2.5x19.5xCoffee Holding Company,Inc.REEDS, Inc.NasdaqCM:JVANY 34 644.9%47%18.7x1.4x0.4x8.8xAMEX:REEDCA 33 2-47.1%-54%NMNM1.0xNMCrystal Rock Holdings, Inc.AMEX:CRVPCT 15 1-4.2%19%19.9x3.5x0.4x5.0xLeading Brands Inc.NasdaqCM:LBIXBC 5 xSegment Average 5,61642.5xSymbolState1.9x12.2xSource: S&P Capital IQCPG FOODS (INCLUDING SNACKS)Company Name2.5xMarket Cap( in Mil)PriceStock PriceQuarter ChangeYTD ChangePrice/ Price/ TEV/TEV/LMT EPS Book Rev EBITDAMondelez International, Inc.NasdaqGS:MDLZIL 70,634 4613.4%1%39.5x2.5x3.1xGeneral Mills, Inc.NYSE:GISMN 42,393 7112.6%24%27.2x8.6x3.1x18.7x14.8xKellogg CompanyNYSE:KMI 28,581 826.7%13%40.5x14.1x2.7x17.8xConAgra Foods, Inc.NYSE:CAGIL 20,865 487.1%13%47.7x5.5x2.2x18.3xCampbell Soup CompanyNYSE:CPBNJ 20,534 674.3%27%29.4x12.3x3.0x15.0xHormel Foods CorporationNYSE:HRLMN 19,393 37-15.4%-7%25.9x4.5x2.1x14.1xMead Johnson NutritionCompanyMcCormick & Company,IncorporatedPinnacle Foods Inc.NYSE:MJNIL 16,940 916.8%15%35.6xNM4.6x17.8xNYSE:MKCMD 13,533 1077.2%25%35.7x7.7x3.4x19.8xNYSE:PFNJ 5,408 463.6%9%24.1x3.0x3.1x15.7xPost Holdings, Inc.NYSE:POSTMO 5,318 8320.2%34%122.3x1.8x1.8x11.5xFlowers Foods, Inc.NYSE:FLOGA 3,878 191.6%-13%21.3x3.4x1.3x11.2xLancaster ColonyCorporationB&G Foods Inc.NasdaqGS:LANCOH 3,498 12815.4%11%31.6x7.0x2.9x16.9xNYSE:BGSNJ 3,019 4838.5%38%27.2x4.9x4.1x17.9xJ&J Snack Foods Corp.NasdaqGS:JJSFNJ 2,221 11910.1%2%31.3x3.7x2.2x14.0xCal-Maine Foods, Inc.NasdaqGS:CALMMS 2,151 44-14.6%-4%6.2x2.4x0.9x3.1xDean Foods CompanyNYSE:DFTX 1,660 184.4%5%14.3x2.9x0.3x5.6x*Continued on next page.Note: These data represent recorded transactions only, and are not all-inclusive. Nevertheless, they are typically representative of the industry.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.7

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTPUBLIC BASKET (CONTINUED)CPG (CONTINUED)Company NameSymbolStateMarket Cap( in Mil)PriceStock PriceQuarter ChangeYTD ChangePrice/ Price/ TEV/TEV/LMT EPS Book Rev EBITDAAmplify Snack Brands, Inc.NYSE:BETRTX 1,103 153.0%28%39.5x44.8x6.7x20.8xFarmer Brothers Co.NasdaqGS:FARMCA 522 3215.0%-1%45.5x5.0x0.9x12.4xLifeway Foods Inc.NasdaqGM:LWAYIL 156 10-10.7%-13%64.6x3.4x1.3x21.7xInventure Foods, Inc.NasdaqGS:SNAKAZ 153 838.2%10%NM3.0x1.0x34.4xGolden Enterprises Inc.NasdaqGM:GLDCAL 81 .4xSegment Average 11,914Source: S&P Capital IQNATURAL & ORGANIC FOODSCompany NameSymbolStateMarket Cap( in Mil)Stock PriceQuarter ChangePriceYTD ChangePrice/ Price/ TEV/TEV/LMT EPS Book Rev EBITDAWhole Foods Market, Inc.NasdaqGS:WFMTX 10,279 322.9%-4%19.3x3.2x0.7x7.5xThe WhiteWave FoodsCompanyPinnacle Foods Inc.NYSE:WWAVCO 8,305 4715.5%21%49.1x6.3x2.6x22.2xNJ 5,408 463.6%9%24.1x3.0x3.1x15.7xThe Hain Celestial Group,NasdaqGS:HAINInc.Sprouts Farmers Market, Inc. NasdaqGS:SFMNYSE:PFNY 5,147 5021.6%23%29.7x2.8x2.1x16.0xAZ 3,452 23-21.1%-14%25.2x4.2x1.0x11.5xDarling Ingredients Inc.NYSE:DARTX 2,452 1513.1%42%41.6x1.3x1.3x8.8xUnited Natural Foods, Inc.Nasdaq:UNFIRI 2,358 4716.1%19%17.4x1.6x0.3x9.2xCalavo Growers Inc.NasdaqGS:CVGWCA 1,168 6717.4%37%38.8x5.7x1.4x21.1xAmplify Snack Brands, Inc.NYSE:BETRTX 1,103 153.0%28%39.5x44.8x6.7x20.8xSunOpta Inc.TSX:SOYON 463 5-6.6%-43%270.1x0.9x0.7x15.5xNatural Grocers by VitaminCottage, Inc.Limoneira CompanyNYSE:NGVCCO 294 13-38.6%-36%20.4x2.4x0.5x6.6xNasdaqGS:LMNRCA 250 1815.9%18%NM2.1x3.8x99.7xLifeway Foods Inc.NasdaqGM:LWAYIL 156 10-10.7%-13%64.6x3.4x1.3x21.7xInventure Foods, Inc.NasdaqGS:SNAKAZ 153 838.2%10%NM3.0x1.0x34.4xAMCON Distributing Co.AMEX:DITNE 54 909.8%12%9.4x0.9x0.1x5.5xREEDS, Inc.AMEX:REEDCA 33 2-47.1%-54%NMNM1.0xNMRiceBran TechnologiesNasdaqCM:RIBTAZ 17 248.2%-13%NM2.3x0.8xNMTofutti Brands Inc.AMEX:TOFNJ 11 Segment Average 2,283Source: S&P Capital IQNote: These data represent recorded transactions only, and are not all-inclusive. Nevertheless, they are typically representative of the industry.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.8

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTPUBLIC BASKET (CONTINUED)PRODUCE/AGRIBUSINESSCompany NameMonsanto CompanySymbolNYSE:MONStateMOMarket Cap( in Mil)Stock PriceQuarter ChangePriceYTD ChangePrice/ Price/ TEV/TEV/LMT EPS Book Rev EBITDA 45,250 10317.9%5%31.9x8.9x4.1x15.1xFresh Del Monte Produce Inc NYSE:FDPFL 2,766 5429.4%40%24.0x1.6x0.8x11.3xCalavo Growers Inc.NasdaqGS:CVGWCA 1,168 6717.4%37%38.8x5.7x1.4x21.1xLimoneira CompanyNasdaqGS:LMNRCA 250 1815.9%18%NM2.1x3.8x99.7xS&W Seed CompanyNasdaqCM:SANW23.4xCA 74 44.3%3%NM1.1x1.2xChina Green Agriculture, Inc. NYSE:CGAN/A 49 1-1.5%-13%2.2x0.1xNMNMAgria CorporationNYSE:GRON/A 48 1-12.1%-37%NM1.0x0.4x8.0xOrigin Agritech LimitedNasdaqGS:SEEDN/A 41 234.8%24%NM1.4x1.5x22.3x 6,206 13.3%9.7%24.2x2.7x1.9x28.7xSegment AverageSource: S&P Capital IQINGREDIENTS & FLAVORSCompany NameSymbolStateMcCormick & Company,IncorporatedIngredion IncorporatedNYSE:MKCMDNYSE:INGRSensient TechnologiesCorporationDarling Ingredients Inc.NYSE:SXTSunOpta Inc.Market Cap( in Mil)PriceStock PriceQuarter ChangeYTD Change7.2%25%Price/ Price/ TEV/TEV/LMT EPS Book Rev EBITDA 13,533 107IL 9,316 12921.2%35%22.3x4.1x1.9x11.3xWI 3,184 7111.9%13%27.3x3.7x2.8x15.0xNYSE:DARTX 2,452 1513.1%42%41.6x1.3x1.3x8.8xTSX:SOYON 463 5-6.6%-43%270.1x0.9x0.7x15.5xTerraVia Holdings, Inc.NasdaqGS:TVIACA 222 329.1%6%NMNM7.8xNMFeronia Inc.TSXV:FRNON 35 Segment Average 4,17235.7x3.4x19.8xSource: S&P Capital IQCO-PACKERSCompany Name7.7xSymbolStateMarket Cap( in Mil)PriceStock PriceQuarter ChangeYTD ChangePrice/ Price/ TEV/TEV/LMT EPS Book Rev EBITDAPilgrim's Pride CorporationNasdaqGS:PPCCO 6,486 250.3%15%12.2x4.7x0.9x6.4xHigh Liner Foods Inc.TSX:HLFNS 582 1925.7%21%16.1x2.1x0.7x9.5xJohn B Sanfilippo & Son Inc. NasdaqGS:JBSSIL 478 43-38.3%-21%16.2x1.9x0.6x8.4xLandec Corp.NasdaqGS:LNDCCA 291 112.5%-9%36.0x1.4x0.6x16.0xAmira Nature Foods Ltd.NYSE:ANFIN/A 266 7-24.3%-19%9.6x1.4x0.7x5.5xBridgford Foods Corp.NasdaqGM:BRIDCA 115 132.6%46%16.6x2.9x0.8x7.4xCoffee Holding Company,Inc.RiceBran TechnologiesNasdaqCM:JVANY 34 644.9%47%18.7x1.4x0.4x8.8xNasdaqCM:RIBTAZ 17 ment Average 1,034Source: S&P Capital IQNote: These data represent recorded transactions only, and are not all-inclusive. Nevertheless, they are typically representative of the industry.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.9

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTPUBLIC BASKET (CONTINUED)DAIRYCompany NameSymbolStateMarket Cap( in Mil)Stock PriceQuarter ChangePriceYTD ChangePrice/ Price/ TEV/TEV/LMT EPS Book Rev EBITDADanoneENXTPA:BNN/A 38,769 631.4%2%23.9x3.1x2.1x12.2xMead Johnson NutritionCompanyThe WhiteWave FoodsCompanyDean Foods CompanyNYSE:MJNIL 16,940 916.8%15%35.6xNM4.6x17.8xNYSE:WWAVCO 8,305 4715.5%21%49.1x6.3x2.6x22.2xNYSE:DFTX 1,660 184.4%5%14.3x2.9x0.3x5.6xSynutra International Inc.NasdaqGS:SYUTMD 216 4-23.3%-19%10.2x1.6x1.7x9.8xLifeway Foods Inc.NasdaqGM:LWAYIL 156 1x14.9xSegment Average 11,008Source: S&P Capital IQPROTEINSCompany NameSymbolStateMarket Cap( in Mil)PriceStock PriceQuarter ChangeYTD ChangePrice/ Price/ TEV/TEV/LMT EPS Book Rev EBITDATyson Foods, Inc.NYSE:TSNAR 25,731 670.2%25%16.9x2.7x0.8x9.0xHormel Foods CorporationNYSE:HRLMN 19,393 37-15.4%-7%25.9x4.5x2.1x14.1xPilgrim's Pride CorporationNasdaqGS:PPCCO 6,486 250.3%15%12.2x4.7x0.9x6.4xPost Holdings, Inc.NYSE:POSTMO 5,318 8320.2%34%122.3x1.8x1.8x11.5xSeaboard Corp.AMEX:SEBKS 3,360 2,871-4.4%-1%20.4x1.2x0.5x9.2xCal-Maine Foods, Inc.NasdaqGS:CALMMS 2,151 44-14.6%-4%6.2x2.4x0.9x3.1xSanderson Farms, Inc.NasdaqGS:SAFMMS 1,956 87-3.9%12%14.3x1.8x0.6x5.8xPremium Brands HoldingsCorporationNomad Foods LimitedTSX:PBHBC 1,576 54-0.7%42%35.1x4.5x1.2x15.8xNYSE:NOMDN/A 1,424 8-11.4%-34%NM0.9x1.7x0.0xBridgford Foods Corp.NasdaqGM:BRIDCA 115 132.6%46%16.6x2.9x0.8x7.4xPingtan Marine Enterprise Lt NasdaqCM:PMEN/A 97 1-2.2%-12%25.0x0.7x4.6xNMAoxin Tianli Group, Inc.N/A 27 ment AverageNasdaqCM:ABAC 5,636Source: S&P Capital IQNote: These data represent recorded transactions only, and are not all-inclusive. Nevertheless, they are typically representative of the industry.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.10

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTOVERALL U.S. LOWER MIDDLE MARKET M&A ACTIVITYCAPITAL STACK100%80%48.0% 45.4% 48.5%47.4% 53.3% 49.3%41.9% 48.0% 51.4%39.8% 45.3% 46.8%44.9% 41.2% 55.2%17.1% 16.4% 15.0%13.1%18.0% 14.7%12.0%16.5% 10.7% 11.5%17.3% 19.6%40.1% 37.3% 36.5%43.7% 44.1% 41.8%37.9% 39.2% 36.3%60%40%20%34.3% 38.2% 36.6%11.0% 13.1%39.5% 35.6% 37.6%18.5%0%201220132014Senior DebtSub Debt20152016EquitySource: GF 1,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000Capital Invested ( mm)Deals ClosedM&A ACTIVITY 02015 Q22015 Q32015 Q4Deals Closed2016 Q12016 Q2Capital InvestedSource: S&P Capital IQTRANSACTION MULTIPLESEBITDA Multiples By Transaction Size9.0x9.0x8.6x7.5x 7.7x6.0x6.4x5.3x5.8x6.2x6.7x7.4x6.8x 1x3.0x0.0x20112012 10-25mm2013 25-50mm2014 50-100mm2015 100-250mmYTD 2016Source: GF Data**The most current source of GF Data is as of March 31, 2016, and lags one quarter behind the current quarter.720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.11

Q2 2016 VOL 4 ISSUE 2FOOD & BEVERAGE REPORTCOMPREHENSIVE FOOD & BEVERAGEEXPERTISECONTACT USThe food & beverage industry may have stolen the national spotlight in recentyears, but we have been involved in the food & beverage industry for well overa decade. Our experience and drive puts us at the leading edge of informationin the market, giving you the advantage when the time comes to buy, sell orseek investments to grow your business.Our food & beverage industry investment banking expertise includes thefollowing segments: Alcoholic BeveragesNon-Alcoholic BeveragesCPG FoodsNatural & Organic FoodsDairy ProteinsProduce/AgribusinessIngredients & FlavorsCo-PackersTravis ConwayManaging Director –Food & Beverage Team720.221.9220tconway@sdrventures.comBen RudmanDirector –Food & Beverage Team720.221.9220brudman@sdrventures.comEric BosveldDirector –Food & Beverage Team226.777.3078ebosveld@sdrventures.comFEATURED M&A CASE STUDYSDR has completed numerous transactions types throughout the Food & Beverage industry, including:Hollandia Produce, L.P. (“Hollandia Produce” or “Hollandia”) has implemented an EmployeeStock Ownership Plan (“ESOP”), with structuring and funding co-led by Mosaic Capital Partners,LLC (“Mosaic Capital Partners” or “Mosaic”) and The SEAM Fund (“SEAM”). SDR Venturesserved as Hollandia’s transaction advisor throughout the process.California-based Hollandia Produce is a leading producer of greenhouse-grown leafy greens,and has built a strong reputation around its production of Live Gourmet brand butter lettuce aswell as Grower Pete’s Certified Organic brand butter lettuce and watercress. As Hollandia’sexclusive transaction advisor, SDR Ventures was able to help Hollandia capitalize on its uniquegrowing and packaging process and its high growth potential. SDR utilized its extensiveconsumer-products network to locate two qualified investors in Mosaic Capital and The SEAMFund, each of which fit the financial and ESOP-related goals of Hollandia.SDR SERVICE OFFERINGSSELL-SIDE ADVISORYPRIVATE CAPITAL FORMATIONBUY-SIDE ADVISORYSTRATEGIC CONSULTING720.221.9220 SDRVENTURES.COMInvestment Banking and Securities Offered Through SDR Capital Markets, Inc., Member FINRA and SIPC.12

Food & Beverage Team. 720.221.9220. tconway@sdrventures.com Ben Rudman Director – Food & Beverage

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