InSight

Exit and Growth Strategies for Middle Market Businesses

M&A Quarterly News In The Food and Beverage Industry Sector

By Terry Fick | Sep 19, 2018

The report below gives a good overview of the third quarter M&A activity in the Food and Beverage Industry Sector. M&A activity for North American based target companies in the Food and Beverage sector for Q2 2018 included 70 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in May when Lassonde Industries, Inc. acquired Old Orchard Brands, LLC for US$158.9 million in cash, contingent payout and other payment. Under the terms of the agreement, Lassonde Industries paid US$146 million in cash and an additional US$10 million over next two years subject to specified financial milestones. The transaction is in line with Lassonde Industries’ growth strategy and improves its manufacturing footprint in the Midwestern United States. Founded in 1985, Old Orchard Brands, is located in Sparta, Michigan and processes and bottles fruit juices, frozen juice concentrates and nonalcoholic drink mixers.

The recent acquisition of Body Armor by Coca Cola is a continued example of the growth in the specialty beverage sector. This has been particularly evident in the tea sector.

Industry Indicators

  • The consumer price index for food, an indicator of food product values, rose 1.4% in July 2018 compared to the same month in 2017.
  • US nondurable goods manufacturers’ shipments of food products, an indicator of demand for food manufacturing, rose 2.3% year-to-date in June 2018 compared to the same period in 2017.
  • US retail sales for food and beverage stores, a potential measure of food demand, increased 3.9% in the first seven months of 2018 compared to the same period in 2017.
  • Total US wholesale sales of nondurable goods, a potential measure of food demand, rose 7.9% in June 2018 compared to the same period in 2017.

Posted by Terry Fick.

Read the Entire Food & Beverage 3rd Quarter Newsletter Here


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