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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?


To: richardred who wrote (4826)4/11/2018 1:08:38 PM
From: richardred  Read Replies (1) | Respond to of 6147
 
Food and beverage M&A will heat up this year, report says


Author
Cathy Siegner

Published April 10, 2018



The value of global mergers and acquisitions this year is likely to rise above last year's $392 billion because political events such as Brexit and the French elections are in the past, companies are sitting on large cash reserves, and legacy and other firms are actively exploring M&A for growth and innovation, according to an annual report from A.T. Kearney

For the report, the company's co-authors and researchers analyzed more than 100,000 deals in the food and beverage sector from 2006 through the first quarter of this year. They also gathered the views of 89 c-level executives via a survey on sector trends and future activity — with 71% reporting that M&A activities are creating value, compared to 48% saying so last year.







The study also found that large food and beverage companies are likely to keep using M&A in order to stay relevant, and more deals are likely to occur as the drive for sales, innovation and differentiation — and shareholder pressure — continue.







Bahige El-Rayes
A.T. Kearney

"While some key trends in the market will become even more entrenched — such as record-high cash reserves and the continued ease of global trade that M&A represents — others will shift," Bob Haas, leader of the firm’s global Mergers & Acquisitions Practice and co-author of the report, said in a release. "Much of the wait-and-see climate we saw in 2017 that has characterized M&A globally has dissipated. At the same time, with interest rates finally on the uptick, we will likely see an increase in U.S. companies making innovative acquisitions to stay relevant."

Valuations have been falling Along with the dip in deal volume and value last year — down 6% and 2% from 2016, respectively — the enterprise value divided by earnings before interest, taxes, depreciation and amortization multiple also fell to 10.4, the lowest since 2011, according to Bahige El-Rayes, principal in A.T. Kearney’s Consumer and Retail Practice, and co-author of the report.

Nevertheless, he expects activity and values to pick up in 2018 as food companies reach out to target new and returning consumers and bolster the bottom line.



"Legacy consumer and retail companies will fight back in 2018 and seek out adjacent and convergent businesses. Winners will be those that understand what consumers prefer and the channels they use, take a holistic view of their industry, and fearlessly pursue innovative, out-of-the-box opportunities."


Bahige El-Rayes

Principal, A.T. Kearney's Consumer and Retail Practice




"With valuations softening everywhere except [the Asia Pacific region], we’ve still seen consumer and retail deal activity rising every year since 2009," he said in a statement. "Uncertainty remains a constant, but it’s taking a back seat as traditional retail and consumer companies continue to go after more customers and more revenue. We predict that legacy consumer and retail companies will fight back in 2018 and seek out adjacent and convergent businesses. Winners will be those that understand what consumers prefer and the channels they use, take a holistic view of their industry, and fearlessly pursue innovative, out-of-the-box opportunities."

El-Rayes told Food Dive that additional factors impacting deals are online players and consumers moving away from big brands to smaller ones that tell a relatable story. At the same time, he noted top executives are looking for both domestic opportunities and those outside the U.S.

"They expect more cross-border deals, and because we can repatriate cross-border funds that were stuck abroad, we can do more M&A. We expect to see a lot more deals happening, both domestically and foreign," he said.






Blue Buffalo Co., Ltd.

Adjacencies and value are key Private-equity firms and corporations have been sitting on "dry powder" for six years, El-Rayes said. With today's still relatively low interest rates, they are looking around for attractive deals adjacent to their existing businesses — such as the recent General Mills announcement that it will pay $8 billion for Blue Buffalo Pet Products.

"As the future grows, it’s no longer about acquisition, it’s about adjacencies," he said. "Like General Mills and Blue Buffalo and Hershey with Amplify, etc., those adjacencies are going to be the name of the game as we go forward."

Collaboration will also be important in the coming days as retailers work more closely with food manufacturers ?in order to "future-proof" — or "Amazon-proof" — themselves from takeovers, he noted. Part of the advantage will be to duplicate the fast delivery service Amazon now offers through Whole Foods.

"Basically what you do as a food manufacturer is to use the retailer’s footprint to deliver and ship to homes," El-Rayes said. "Retailers have more opportunities to work with food manufacturers — and get products to them in one or two hours."

More M&A activity in the retail sector can be expected as private equity firms watch them struggling for market share against incoming price-cutters such as Aldi and Lidl and sense a good deal that will likely bring value down the line, El-Rayes said.

"You can get a prized asset, and if it has intrinsic value, you might get a good deal," he said. "The name of the game is private label. If you are able to have, as a retailer, a destination private label brand, if you are able to create that, then you are able as a retailer to control the economics and you are more able to set prices."






Flickr user Central Texas Food Bank

Culture clash and trade uncertainty Culture clash presents another minefield as M&A activity picks up. El-Rayes said that it is one of the biggest reasons acquisitions fail. He said there needs to be more post-acquisition planning to accommodate inevitable style differences that crop up between companies.

To pursue investments and acquisitions, CPG firms have launched venture capital arms and funding incubators and accelerators. A.T. Kearney's research found that only Tyson and Campbell had truly benefited from this trend.

For others, execution and culture haven't followed the initial investment, El-Rayes said. When a VC arm buys into a startup, it's buying into a set of people and processes and a culture that is "going to do things in a way that's more agile and mobile than what they do," he said. As a result, the larger company either has to change or the benefit won't be fully realized.

As recent tariff disputes between the U.S. and China roil global markets, many have wondered how it could impact M&A in the near term.

"I think it’s creative uncertainty, and big companies, especially global ones, look at that and say, ‘I want to invest, but there’s uncertainty, so let’s see how that plays out,’ " El-Rayes said. "It may delay some deals from happening."

fooddive.com




To: richardred who wrote (4826)6/7/2018 1:56:14 PM
From: richardred  Read Replies (1) | Respond to of 6147
 
Nibbled at some untimely HAIN today. IMO some of the latest food acquisition have come at a high goodwill cost (writedown), as CPB is finding out with Bolthouse & Garden Fresh. Hain's already has some respectable established organic brands with scale for some hypothetical parent with deep pockets. Campbell's already found the need to diversify again. This after things fell apart on their Bolthouse & Garden Fresh acquisition integration debacle. Personally I like the depressed food group a lot better than I liked the retail store group when they hit the dog house. Why, food is a necessity and lot closer to home than unnecessary discretionary items. It has been said recently big food producers are loosing their pricing power. One way to combat this is through consolidation. On the other hand. Amazon IMO could eventually add or keep hypothetically buying established Brand names such as HAIN or Campbells brands or others and deal with the blowback with Walmart and others? With Pepsi by far the biggest and most profitable snack company. What are they doing? IMO Coke has to be thinking down the road also. Will they venture away from drinks? The established food companies with scale also must be thinking the same. RE- Oligopoly-Chemicals Dow-Dupont- Monsanto- Bayer. IMO The Food business looks like an up and coming eventual oligopoly business. IMO the group will look a lot better if trucking prices come down. I think later this year fuel costs will come down. This because American Oil companies will be pumping. Natural Gas could also be making inroads into trucking. The insurance policy is ANWR. It's there and now partly available. IMO Prices would have to be compelling for a long time for development. With the exception of exploratory measures. I don't think it will have to be used any time soon.

BGS - HAIN - Speculation aspects - CAG had good earnings today. They sold their private label brands to Treehouse. The deal to sell it Wesson oil business is off due to regulatory concerns. I was used to remembering the talk of Private labels generally thriving in a recession environment. I think the economy is doing much better now a days. IMO meaning Brand names will see slower declines in historical traditional branded space and can withstand price increases better. I see companies using existing brand name awareness by creating or extending offshoot lines. This by way of healthier,organically,and strategically packaged lines geared for better for consumer tastes of today. IMO- A good earnings report today just might mean CAG is ready for a bigger acquisition? BGS & HAIN IMO BGS needs a bigger parent to compete better. IMO HAIN's itself has a good line of brands for newer consumers taste. The fact that GIS was willing to pay a big goodwill price (8 billion for a 1.3 billion business) for diversification. IMO Shows food companies are willing to make big moves for growth. Privately held Mars also made a big acquisition in the pet space. It's $9.1 billion acquisition of pet care company VCA. I also think wev'e got to the point now bigger food companies with want to fold in some of the acquisitions made by some of the smaller companies made to grow themselves faster. Pirate's Booty/Back to Nature Foods Company by BGS are examples.

P.S.
Costs are rising in the group and customers are trying to keep costs down. IMO Consolidation is one way to combat pressures from customers. I can't help but see some synergies here.

CAG snips> The Refrigerated & Frozen segment continued its growth momentum in the third quarter with 3.2% net sales growth.

>Volume declined 4%, driven by retailer inventory reductions, which were higher than anticipated, and deliberate actions to optimize distribution on certain lower-margin products, consistent with the Company's value over volume strategy. Price/mix declined 2% as the Company increased its investments with retail customers to drive brand saliency, enhanced distribution, and consumer trial. The acquisitions of the Duke's, BIGS, and Angie's BOOMCHICKAPOP businesses added approximately 500 basis points to the net sales growth rate.

BGS snip>Net sales growth was primarily driven by our three most recent acquisitions, all of which performed better than expected, as well as strong growth in Green Giant frozen and Pirate Brands



To: richardred who wrote (4826)6/22/2018 6:10:37 AM
From: richardred  Read Replies (1) | Respond to of 6147
 
BGS - TAKEOVER SPECULATION- Goes up a notch on CAG / Pinnacle talks. If talks fail. As I suggested In this years TT SITT list. Maybe a BGS Pinnacle merger?IMO For BGS they need a bigger parent. If the deal is successful. I see other bigger parents looking for adoptions.

Food deals- Frozen Foods are a hot commodity these days. Birds Eye- Green Giant

Conagra has approached Pinnacle Foods about a potential deal

A pairing of Healthy Choice-owner Conagra and Bird's Eye-owner Pinnacle would combine two companies with a large presence in frozen foods at a time when the category is seeing a resurgence.
A combination of Conagra and Pinnacle would create the second-largest U.S. frozen food company, analysts at RBC Capital Markets recently wrote.
Pinnacle has a market capitalization of $7.9 billion, while Conagra has a market capitalization of $15.1 billion.

Conagra Brands has approached Pinnacle Foods about a potential acquisition, sources familiar with the situation told CNBC on Thursday.

Pinnacle has a market capitalization of $7.9 billion, while Conagra's is $15.1 billion.

A pairing of Healthy Choice-owner Conagra and Bird's Eye-owner Pinnacle would combine two companies with a large presence in frozen foods at a time when the category is seeing a resurgence. Food companies, including Conagra, have poured money into previously neglected brands to highlight their healthiness, affordability and ease of use.

The two combined would create the second-largest U.S. frozen food company, analysts at RBC Capital Markets recently wrote. The other major players include Kraft Heinz and Nestle, the latter of which is the largest in the U.S., according to RBC.

It is at least the second time the two have had such talks in as many years. Conagra approached Pinnacle about a tie-up last year, but the two parties could not agree on a price and discussions were short-lived, sources have told CNBC.

The deal talks come after activist hedge fund Jana Partners recently disclosed a roughly 9 percent stake in Pinnacle and said it planned to talk with the company on a range of subjects, including a possible sale.

Bloomberg first reported the approach. Both companies declined to comment.

An acquisition of Pinnacle would, for Conagra, be a continuation of its efforts to reinvent itself since selling its private-label unit for $2.7 billion in 2016 to focus on its branded food business. At the time of the sale, Jana had taken a roughly 7.2 percent stake in the company and was pushing for changes.

In 2016, Conagra spun off its $6.9 billion frozen potato business, Lamb Weston Holdings. It has since been buying a number of small brands to modernize a portfolio that includes Orville Redenbacher's popcorn and Hebrew National hot dogs. Its acquisitions include the parent of Angie's Boomchickapop and the parent of Duke's meat snacks.

Such deals, though, are small bites in comparison to a potential acquisition of Pinnacle. Conagra's CEO, Sean Connolly, recently told analysts that "M&A remains a central part of [the company's] plan," and that Conagra intends to pursue a range of deals including, "modernizing acquisitions, synergistic acquisitions and select divestitures."

Connolly has a history with Pinnacle. In his former role as CEO of Hillshire Brands, he also attempted a 2014 takeover of the company, though Hillshire ultimately scrapped that deal in favor of a sale to Tyson Foods.

In the time since, Pinnacle has undergone its own changes. It acquired Boulder Brands, owner of healthy food brands like Udi's and Glutino, for roughly $975 million in 2016.

Still, Pinnacle is seeing its strongest growth in its frozen food business, which is the company's largest and last quarter grew at a rate of 7.5 percent. Its Boulder business grew 0.5 percent and its grocery business, which includes brands like Vlasic pickles, Duncan Hines cake mix and Wish-Bone salad dressing grew 0.6 percent. The latter has been squeezed as consumers eye healthier, cheaper or newer alternatives.

While big food companies across the board have seen sales stall as they struggle with the burden of having large brands out of touch with today's shoppers, frozen food has been one of few the categories they have been able to revive through investment. It is a category that benefits particularly from scale.

It has also, therefore, been a center of M&A activity. Schwan's Co., maker of frozen foods like Tony's pizza, hired a bank last year to weigh a sale, CNBC then reported. Nomad Foods earlier this month announced its plans to acquire U.K. frozen potato and pudding company Aunt Bessie's. The company has swooped up a number of frozen food brands over the past few years, including Findus and Iglo.

cnbc.com

To: richardred who wrote (4835)4/20/2018 9:39:19 AM
From: richardred of 4890
Activist investor Jana takes 9.1% stake in Pinnacle Foods
  • Activist investor Jana Partners disclosed a 9.1 percent stake in Pinnacle Foods.
  • Jana said it would seek talks with the company on a range of subjects including a possible sale of the packaged foods maker.


cnbc.com


Message #4826 from richardred at 3/22/2018 1:06:07 PM

BGS - HAIN - Speculation aspects - CAG had good earnings today. They sold their private label brands to Treehouse. The deal to sell it Wesson oil business is off due to regulatory concerns. I was used to remembering the talk of Private labels generally thriving in a recession environment. I think the economy is doing much better now a days. IMO meaning Brand names will see slower declines in historical traditional branded space and can withstand price increases better. I see companies using existing brand name awareness by creating or extending offshoot lines. This by way of healthier,organically,and strategically packaged lines geared for better for consumer tastes of today. IMO- A good earnings report today just might mean CAG is ready for a bigger acquisition? BGS & HAIN IMO BGS needs a bigger parent to compete better. IMO HAIN's itself has a good line of brands for newer consumers taste. The fact that GIS was willing to pay a big goodwill price (8 billion for a 1.3 billion business) for diversification. IMO Shows food companies are willing to make big moves for growth. Privately held Mars also made a big acquisition in the pet space. It's $9.1 billion acquisition of pet care company VCA. I also think wev'e got to the point now bigger food companies with want to fold in some of the acquisitions made by some of the smaller companies made to grow themselves faster. Pirate's Booty/Back to Nature Foods Company by BGS are examples.

P.S.
Costs are rising in the group and customers are trying to keep costs down. IMO Consolidation is one way to combat pressures from customers. I can't help but see some synergies here.

CAG snips> The Refrigerated & Frozen segment continued its growth momentum in the third quarter with 3.2% net sales growth.

>Volume declined 4%, driven by retailer inventory reductions, which were higher than anticipated, and deliberate actions to optimize distribution on certain lower-margin products, consistent with the Company's value over volume strategy. Price/mix declined 2% as the Company increased its investments with retail customers to drive brand saliency, enhanced distribution, and consumer trial. The acquisitions of the Duke's, BIGS, and Angie's BOOMCHICKAPOP businesses added approximately 500 basis points to the net sales growth rate.

BGS snip>Net sales growth was primarily driven by our three most recent acquisitions, all of which performed better than expected, as well as strong growth in Green Giant frozen and Pirate Brands
To: richardred who wrote (4176)5/1/2016 7:42:36 PM
From: richardred Read Replies (1) of 4890
IMO PL Pinnacle Foods is Hypothetical Hunter. This even after Boulder Brands acquisition. I personally buy & like the Bird eye varieties of steam bag of frozen veggies. Noted acquirers, Pinnacle and B&G foods both work to bring unwanted and boring brands back to life. I'm still looking to buy back into HAIN if the opportunity presents itself. Still thinking GIS for this one.

PL snip> Overall, the company boasts a strong brand portfolio and intends to continue to invest in innovation to further differentiate its brands in the marketplace. It has also been pursuing various acquisitions over the years to enhance distribution network, customer base and long-term growth.

Pinnacle Foods also has an operational excellence program to generate annual productivity savings across the supply chain. The company has raised its savings target in 2016 to a range of 3.5% to 4% of annual cost of products sold, compared with 3% to 4%, which has been achieved over the last five years. These productivity savings, along with higher pricing, have been mitigating the impact of input cost inflation to drive gross margins.
To: richardred who wrote (4254)8/21/2017 12:16:47 PM
From: richardred Read Replies (1) of 4890
sold out of SENEA in the high thirties, however the speculation still exists if founder approved.
Pinnacle Foods to acquire frozen vegetable facility Aug. 16, 2017 - by Monica Watrous


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Pinnacle Foods, maker of Birds Eye frozen vegetables, expects to begin integration of the facility into its supply chain network in the second half of this year.


PARSIPPANY, N.J. — Pinnacle Foods, Inc. has agreed to acquire a frozen warehouse and vegetable packaging facility from Ryder Integrated Logistics for $37.5 million, according to an Aug. 9 filing with the U.S. Securities and Exchange Commission.

The maker of Birds Eye frozen vegetables said the acquisition will be funded with cash on hand and expects to begin integration of the facility into its supply chain network in the second half of this year.

The facility, located in Beaver Dam, Wis., is expected to drive productivity and margin enhancement, consistent with the network optimization initiatives in Pinnacle Foods’ long-term strategic plan, beginning in the second half of 2018, the company said.

In the recent quarter, Pinnacle Foods’ Birds Eye business posted double-digit sales growth behind the launch of new product lines, including organic and superfood blends. But net earnings overall in the second quarter decreased 59% to $18,618,000, while net sales fell 1.6% to $744,608,000. Results were negatively impacted by a recall and exit of certain Aunt Jemima products, the company said.

foodbusinessnews.net