PRODUCE REPORT: M&A, Investment Activity and Key Trends in the Produce Industry

Free Summer 2018 Produce Report Available Now

As consumers continue to incorporate healthier eating habits into their daily routines, the Produce Industry is responding with product and packaging innovations that drive consumption and convenience. However, the industry is facing significant headwinds such as food safety scares and escalating trade disputes both within the North American market and abroad.

SDR’s Summer 2018 Produce Report explores these trends and includes a performance analysis of produce-related public companies and a data-driven analysis of private and public company M&A transactions, deal multiples and private placement activity over the past several years.

The full report is available for download below.

Produce Report Preview

Introduction

The store perimeter continues to be an area of differentiation amongst major retailers, with the fresh produce industry playing an integral role. According to Nielsen Perishables Group, consumer spending on fresh food including dairy, deli, bakery, meat/poultry and seafood, along with fresh fruits and vegetables, is growing at the expense of the centre-of-the-aisle processed foods. Eye-catching displays of quality fruits and vegetables, promotions, sampling and value-added convenience continue to drive demand for produce producers, packers, processors and distributors as well as for those that supply the industry with their products and services.

Since we began tracking private company M&A transactions in the produce industry, the median multiple has been 0.7x revenue and 7.7x EBITDA. The average multiples are slightly higher at 0.9x revenue and 8.0x EBITDA, given the heavier weighting for larger transactions. These are adjusted with a 30% Discount for Lack of Marketability (DLOM) for acquisitions of publicly traded companies, which typically better reflect conditions in the private capital markets…

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Produce Report - Summer 2018

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About the Author:

Eric Bosveld
Eric Bosveld, Director of Food and Agribusiness, utilizes his extensive experience to assist clients in navigating the M&A and private capital markets within the Food and Agribusiness industries. Eric is also President and Founder of Bosveld and Associates, a management consulting firm with a mission to assist its clients in building and incorporating business management systems and practices that drive profit, accelerate growth, reduce risk and increase enterprise value.