Food & Agribusiness Corporate Finance Review - Unprecedented M&A deal volume in unprecedented times
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Food & Agribusiness Corporate Finance Review Unprecedented M&A deal volume in unprecedented times Growing a better world together
Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
2021 is witnessing deal-making increases to above pre-pandemic levels, buoyed by optimistic economic outlooks as
more economies reopen and vaccination programs gain traction. Although Covid-19 remains an ongoing threat in
particular with the rise of the Delta variant, 2021 is seeing a surge in deal volume spurred on by accelerated strategic
agendas, as companies hasten their portfolio optimization towards post-pandemic growth. The pandemic has
illuminated several areas where change is overdue, including supply chain modernization and digitalization. The
question becomes whether supply chain disruptions, labor shortages and inflationary pressures on the value chain will
continue to compel dealmakers to reassess their key competencies and make transformative acquisitions.
2021 kept the momentum from 2020, Notable transactions continue to be Consolidation activity picked up in several
reaching new heights in terms of deal driven by great emphasis on markets over H1 2021, especially in
activity and value due to low interest e-commerce, (re-)focus on supply fragmented European markets or markets
rates, large cash reserves and increased chain resilience and shifting with increased consumer interest. We
competition from private equity and consumer attitudes towards health expect deal activity to remain high through
SPAC appetite and wellness products the rest of the year and 2022
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Rabobank Corporate Finance Review | September 2021 | 2
Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Global M&A activity – full year Global Food & Agri M&A activity – full year
Record-setting M&A activity ctivity
ctivity
ctivity
ctivity
– full
– full
– full
year
– full
year
year
year
Global M&A activity in H1 2021 reached new heights, with an over 140% year-on-year increase in
deal volume to USD 2.9tn in combined value, setting the record as the most active half-year in history.
This record-breaking deal activity was fuelled by a combination of pent-up demand with ample
cash reserves and appealing debt financing options, renewal of transactions postponed in 2020,
and an influx of new M&A opportunities as post-COVID-19 strategies are devised and pursued.
Similarly, global Food & Agri M&A levels recovered to pre-pandemic levels in H1 2021 with 2,171
deals vs. 1,638 the previous year; albeit with a more reserved recovery rate in terms of value.
Notable transactions continue to be driven by heightened investor interest in consumer-facing
Total deal value (USD bn) Number of deals Total deal value (USD bn) Number of deals
industries, health and nutrition, sustainability, and supply chain optimisation.
Over half of the global M&A value was recorded in the US, with more than 5,148 deals announced
Global M&A activity – 1H Global Food & Agri M&A activity – 1H totalling close to USD 2.0tn combined. This represents an almost 150% rise in activity year-on-
year. European cross-border dealmaking continues to rise with inbound and outbound M&A
recording sizeable increases this year. Sponsor-led activity also continues to soar in Europe, and is
expected to remain rife through the rest of 2021, buffered by favourable debt markets.
A rising proportion of deal activity involves Special Purpose Acquisition Companies (SPACs),
which fuelled IPO issuance on US exchanges in the last year and reached unprecedented levels in
the first quarter, only to drop significantly in April. SPAC mergers continue to be a major theme of
US M&A this year, and are expected to continue unabated in the coming quarters. SPAC interest
follows broader transaction themes, including visible F&A transactions motivated by technology
Total deal value (USD bn) Number of deals Total deal value (USD bn) Number of deals
and supply chain resilience. An increasing number of US-listed SPACs are also looking across the
ocean towards Europe to complete their business combinations.
-./012
-./012
Source: Mergermarket; Deal value only includes transactions with disclosed deal figures -./012
-./012
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&!!!&!!!Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
Farm Inputs
M&A activity Food & Agri Market Trends
The pace of deal activity in the farm inputs markets has increased specialty plant nutrition, ICL completed two acquisitions in Brazil: One of the big changes over 2021 has been the relative improvement
substantially compared to H1 2020, as seen in a large number of deals Fertiláqua and Compass Minerals’ South American Plant Nutrition in the balance sheets across farm inputs companies due to increased
that have been done in keeping with sustainability trends, including Business. corn and soybean prices that indirectly led to higher inputs prices. In
biologicals (which encompass bio-pesticides, bio-stimulants and bio- addition, lower borrowing costs as players refinance, better cash on
The enhanced seed breeding space has seen a lot of partnerships,
fertilizers), digital agriculture and specialty seeds. hand, and a focus on sustainability has changed the timing dynamics
such as the announced strategic collaboration between Inari and
of companies to open up new markets.
Sustainability is a galvanizing topic, and many feel that sustainability is Beck’s. On the M&A front, Bridgepoint acquired leading global fruit
going to be the biggest driver of change between now and 2030. For genetics business Sun World International, with the ambition to Sustainability is driving several trends across the farm inputs markets:
different segments within the farm inputs space, this means different things. create a broader-based platform investment in fruit genetics. i) Biofuel mandates for renewable diesel necessitates an investment in
cover or high yielding oil crops that requires a foundation in seed
Biologicals are top-of-mind in the sector, driving deals such as the Building on to its vegetable seeds business, Syngenta acquired
breeding, new crop platforms, and data platforms to validate them.
acquisition of Verdesian Life Sciences by AEA Investors. Due to the Verisem, a global vegetable and herb seed production partner, from
ii) Consumers are increasingly concerned about the use of pesticides,
fragmented nature of the biologicals landscape, sponsors are Paine Schwartz Partners.
and this in turn trickles down into regulatory pressure on synthetic
consolidating this space in a ‘buy and build’ strategy with the view to
From a hardware perspective in terms of sustainability, farm machinery pesticides which forces companies to reposition, either through
exiting to strategics or publicly listing in the coming years. There are
companies are looking at enhancing their precision agriculture investments in biological platforms or in ‘output based solutions’.
fewer large biologicals platforms that would fit within strategics at the
capabilities, such as CNH Industrial’s acquisition of Raven Industries. iii) New seed breeding techniques are also primarily focused on getting
moment, but Nutrien (Actagro), ICL (Fertilaqua and Produquimica) and
more from less, including accelerated breeding platforms.
Syngenta (Valagro) are examples of larger players who increasingly like Antibiotic regulation and the demand for novel feed alternatives has
to add these platforms to their portfolios. also sparked investor interest in the feed additives market, where IK Looking ahead, increased investment by fertiliser companies in
Investment Partners will acquire Innovad, a global supplier of animal biological stabilisers as well as transition platforms are key, while
Other deal activity in the biologicals space includes a consortium by NB supply chains remain a long-term concern.
health and nutrition solutions.
Renaissance and Intesa Holding, which launched a successful voluntary
public tender offer for Sicit shares; Stirling Square Capital Partners There has also been some action through SPACs, such as food
acquired Spain-based agricultural biostimulants producer Sustainable Agro technology company Benson Hill’s combination with Star Peak Corp. II,
Solutions; and Aqua Capital sold a minority stake to GIC in Biotrop, a and vertical farming company Aerofarms’ combination with Spring
leading biologicals player in Brazil. In a move that positions the global Valley Acquisition Corp.
speciality minerals and chemicals company as a leader in Brazil’s
*Publicly disclosed transaction with Rabobank’s involvement Rabobank Corporate Finance Review | September 2021 | 4Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
Grains, Oilseeds and Sugar
M&A activity Food & Agri Market Trends
On the M&A front, the transactions announced in 2021 to date The most significant transaction in the sector during this period
In 2021, agri-commodity prices reached their highest levels since July 2013, putting
have been few, proving that the top priority for most of the has been Tate & Lyle’s sale of a controlling stake in its
in multi-year highs. The rally in commodity prices has been driven by both supply-
players has been to manage through the COVID-19 pandemic sweeteners business to KPS. Within the sugar & sweeteners
and demand-side issues. Many of the world’s major grain and oilseed growing
and its impact on all aspects of their business. sector, one of Tate & Lyle’s main competitors, Ingredion, has been regions, including the US, experienced less than favorable weather for developing
On the back of the trend already shown in 2020, the sector enjoyed particularly busy during the last couple of months. Ingredion crops in 2020 which has continued into the 2021 growing season. In addition,
strong tailwinds and companies are now in expansion mode. announced the acquisition of KaTech, a German specialist in growing global demand for food, particularly from China, has increased global grain
texture and stabilisation solutions for the food & beverage and oilseed trade which has resulted in a significant decline in stock levels. Until
Regarding portfolio optimisation, Bunge has announced the sale of industry, and the contribution of its activities in Argentina, Chile, stocks levels can be restored, agri-commodity prices will be well supported.
their grain terminal in Rostov and the acquisition of the 35.8% stake
and Uruguay into a Joint Venture with Grupo Arcor. Also in
in Kruszwica that it did not own; LDC announced the sale of Biosev One particular development in the grain and oilseed space which has the potential
Argentina, Viterra and 2 other local players have submitted an to be transformational is the rapid evolution of the renewable diesel space in
to Raizen and the sale of Imperial Sugar to U.S. Sugar; Cargill
offer for the acquisition of soy producer Vicentin, that was under response to carbon reduction initiatives like California’s Low Carbon Fuel Standard
announced its intention to sell its 50% stake in Alvean, global raw
bankruptcy proceedings. (LCFS). Due to the ramp up in renewable diesel refining capacity and the resulting
and white sugar origination and trading specialist, to Copersucar and
The oilseeds sector is experiencing a surge in interest, with J-Oil demand for vegetable oil as a feedstock, vegetable oil prices and prices in the entire
the sale of Cevasa, also in Brasil, to Batatais; and Olam announced
Mills announcing the creation of a Joint Venture with Nisshin Oil oilseed complex will be well supported.
its intention to dispose of its Indian sugar activities to Wilmar.
in Japan; Dubai investment Industries selling its crushing plants After seven years of economic challenges in the grain and oilseed sector, profitability
Teros has announced its intention to dispose of several assets,
to Al Ghurair; and Ukraine’s Allseeds announcing it is putting itself has returned to the entire supply chain as seen in increased farmer margins, higher
including the sale of its Romanian and Mozambique operations
up for sale. farmland values, and better financials from grain companies, farm input suppliers,
and 49% of its Asian starch operations. Dutch cooperative Cosun
and food manufacturers alike.
acquired the remaining 49% it did not control in trader Limako from Despite the slow start of the year, we expect an increase in M&A
ED&F Man. Last but not least, Richardson acquired Italgrani’s deal activity in Grains and Oilseeds in the second half of the year
US operations, the largest durum miller in North America. as confidence in the sector starts to recover.
*Publicly disclosed transaction with Rabobank’s involvement Rabobank Corporate Finance Review | September 2021 | 5Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
Animal Protein
M&A activity Food & Agri Market Trends
Animal protein M&A activity picked up significantly in H1 Tyson Foods acquired a 49% stake in Malayan Flour US demand for animal protein is back at record levels compared to 2020 due to a combination
2021, with consumer demand and prices above historical Mills' vertically integrated poultry business, adding more of high consumer income and savings, restaurants reopening, grilling season, and strong
norms, while production industries continue to battle higher supply flexibility for both companies. Pif Paf’s acquisition export demand. Some of this demand will be sticky going forward, primarily due to continued
costs for feed, shipping, packaging, and building. of Uniaves will expand its poultry processing capacity and growth in export demand.
In one of the largest food deals of 2021, Sofina Foods, a accelerate its expansion in Brazil and abroad. Labor shortages and slower processing related to Covid-19 safety protocols continue to
leading Canadian food producer, acquired Eight Fifty Deal activity has also picked up in the seafood sector. In challenge animal protein operational packing capacity. As a result, the backlog of livestock
Food Group, a leading European multi-protein specialist. from the early days of the pandemic still hasn’t completely cleared. For beef markets, this
aquaculture, NTS’ owned fish-farming subsidiary Midt-Norsk
Eight Fifty Food Group was created through the combination large supply of market-ready cattle relative to operational packing capacity has kept cattle
Havbruk acquired Salmonor, bringing together two of the
of Karro Food Group and Young’s Seafood, and thereafter prices low relative to high beef prices, strengthening packer margins. The imbalance of cattle
earliest pioneers in Norway’s aquaculture sector. Scottish
consolidating five other protein businesses across Europe to supplies is expected to normalise towards the end of the year.
Sea Farms acquired Grieg Seafood Hjaltland UK from Grieg
create a leading supplier of both branded and own-label
Seafood. Down the line, consolidation of the European Higher costs (e.g. feed, shipping, packaging) continue to pressure industry margins, with labor
seafood and pork. The acquisition marks Sofina’s first step to being the leading cost pressure. Much of the industry continues to struggle retaining reliable daily
deliver on their ambitious global growth plans. seafood market continued with the acquisition of Copesco &
labor in the plants and is raising wages and benefits in an effort to improve relations.
Sefrisa, a leading Spanish company in salmon and cod
In the pork market, ECOM and Smithfield/WH Group However, even with these added cost pressures, margins are sharply higher on exceptional
products, and their remaining stake in Nakulas by Angulas
renegotiated their stakes in the joint venture Granjas strength in prices. We expect seasonal moderation later this year, but for returns to remain
Aguinaga, backed by PAI Partners.
Carroll de Mexico, with Smithfield increasing their above historical norms.
ownership to a controlling stake. In keeping with consumer trends, animal protein companies Drought conditions in North and South America and strong feed demand from China have
As consumer demand for poultry and poultry products are diversifying their portfolio to include plant-based tightened the global balance sheet for feedstuffs. These same drought conditions are creating
remain strong, strategic moves focus on expansion and alternatives. The third largest European plant-based poor grazing conditions and high hay prices across much of the western US and northern
supply flexibility. Cargill Inc. and Continental Grain Co. producer, Vivera, was acquired by JBS in a move that plains, which will force some liquidation in the US cow herd.
announced the acquisition of the third-largest US poultry thrusts the world’s largest protein company and second-
Finally, sustainability continues to be a major topic across animal protein industries, with
producer, Sanderson Farms Inc. largest food producer into the plant protein market.
several companies making GHG and traceability commitments. There is also substantial R&D
ongoing from methane-reducing feed additives and remote grazing management, to meat
processing automation.
*Publicly disclosed transaction with Rabobank’s involvement Rabobank Corporate Finance Review | September 2021 | 6Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
Dairy
M&A activity Food & Agri Market Trends
Most activity in H1 2021 involved portfolio optimisation by leading dairy Greater China business of the Mead Johnson Nutrition Company from Dairy markets are gradually returning to normal, as Covid-19 related
companies. Bel Groupe, a market-leading cheese brand owner and major Reckitt Benckiser, marking another milestone for Primavera in the restrictions on foodservice and events are being lifted in many
player in healthy snacking, ramped up its strategic rollout with the sale of consumer industry. important dairy consuming markets around the world. However,
iconic European cheese brand Leerdammer to Lactalis. For Lactalis, the world disruptions from the pandemic are far from over and recovery will
Exponent Private Equity-backed Vibrant Foods acquired Everest Dairies, a
leader in dairy products, this transformative acquisition is also in line with be uneven.
leading manufacturer of South Asian dairy products, including paneer. Paneer
its strategic priorities, and bolsters the group’s European roots. Royal is a fast-growing category, as it is being discovered by main-stream Milk supply growth is expected to be modest at 1% YOY for the next
FrieslandCampina sold their Russian subsidiary, Campina LLC, to Ehrmann, consumers looking for culinary adventures and non-meat sources of protein. year among the big-7 milk producing regions. The US will be driving
allowing FrieslandCampina to focus on consumer markets elsewhere. General most of this growth with an expanding milk cow herd and a production
Mills will sell its European Yoplait operations to Sodiaal, in exchange for full The pandemic has also increased interest in digital solutions for prevalent
sector, which fared comparatively well through the pandemic thanks to
ownership of the Canadian Yoplait business and a reduced royalty rate. themes such as sustainability and a growing focus on social good. A
various forms of government aid. The continued supply growth in the
group co-led by KKR and DCP Capital acquired an undisclosed stake in
Consolidation continues across European dairy markets: Sodiaal US is pressuring prices downward compared to global markets.
Adopt A Cow, a fast-growing, direct-to-consumer dairy company in China
International sold their German cheese business Stegmann Emmentaler that integrates digital solutions into its core operations. Inflation is a challenge throughout the dairy supply chain. So are rising
Käsereien to local peer Meggle, consolidating the Bavarian cheese feed costs, pressuring margins at the farm level in many regions of the
market, and Parmareggio merged with Agriform, forming a reference In the dairy alternative category, fast-growing Swedish oat milk brand
world, and input costs pressuring food companies. Ultimately, these
point in the Italian agri-food sector. Continuing their consolidation, Oatly made its market debut in H1 2021, with an IPO that valued the
pressures are appearing in the form of higher food costs for consumers,
Granarolo acquired 100% of Mulino Formaggi, a major cheese packaging company at USD 10bn. Valio, the Finnish food producer, is seeking to
which could weigh on demand as excitement about re-openings
company in the Parma area, from Mulino Alimentare. accelerate growth of its Oddlygood dairy alternative products through
settles down.
spinning off the business and working with a group of partners to support
Cheese and ingredients categories are continuing to receive investment international growth. Oatly’s success and Valio’s desire to accelerate the Import demand from China has been strong, particularly for whey, but
in North America: Hilmar Cheese announced plans to open a new state- international roll-out of Oddlygood exemplifies the growing demand for their import needs are expected to slow through the rest of 2021 as
of-the-art cheese and whey ingredients facility in Dodge City, Kansas dairy alternatives and rapid scale-up required to meet this demand. ample stocks and strong supply from both imports and domestic
with an estimated investment of USD 460m. Saputo announced the Traditional dairy companies continue to expand their portfolio for dairy production outpace demand growth.
acquisition of the Reedsburg facility from Wisconsin Specialty Proteins. alternative products. Saputo acquired Bute Island Foods, the UK-based For the alternative dairy category, the story of growth continues with
Private equity interest focus on specialty consumer-facing brands, such maker of dairy alternative cheese products, and Danone acquired Follow retail sales globally estimated at USD 20bn in 2020 and penetration
Your Heart, the US-based maker of vegan and plant-based dairy foods. rates increasing; for example, America's plant-based dairy retail value
as CVC Capital Partners partnership with SI Foods for joint ownership of
Dodoni, creating a platform to grow the presence in particular in the During the remainder of the year, we anticipate investment activity to of USD 5bn in 2020 growing to USD 7bn by 2025, representing 2.8%
specialty cheese and related sectors through investments and possibly remain robust in the on-trend channels and categories including cheese, and 3.7% of the dairy industry respectively.
acquisitions in Greece and abroad. Primavera Capital will acquire the ingredients, plant alternatives, and sports nutrition.
*Publicly disclosed transaction with Rabobank’s involvement Rabobank Corporate Finance Review | September 2021 | 7Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
Non-Alcoholic Alcoholic
Beverages – Non-Alcoholic
M&A activity Food & Agri Market Trends
In keeping with the broader Consumer sector trend towards portfolio In the hydration segment, following a strategic review and in line with Non-alcoholic beverages are returning to pre-pandemic trends; soda
optimisation, several transactions were motivated by a broader strategy Nestlé’s growth strategy to focus on international premium and mineral sales remain in long decline, while the energy segment and bottled
to focus on core sectors. Transactions continued in hydration as well as water brands and healthy hydration products, the company announced water are leading growth. Functional beverages (especially with
functional beverages (energy, immunity, protein, CBD), with some the sale of Nestlé Waters North America to One Rock Capital Partners, in immunity-based ingredients) are growing, and the types and
reorganisation-driven activity in off-trend categories such as traditional partnership with Metropoulos & Co., and acquired premium alkaline applications of functional ingredients are expanding. We see more
carbonated soft drinks and juices. water brand Essentia Water and functional hydration brand Nuun and segments like coffee offering functional line extensions, while new
products promise ‘relaxation’ and ‘calm’ as functional benefits.
The Hain Celestial Group sold their non-dairy beverages brands, Dream Company Inc.
and Westsoy, to SunOpta Inc.; PepsiCo entered into agreements to sell The energy segment remains highly competitive, with this year seeing
The market saw a slight pick-up in deal activity in the coffee and tea
Tropicana, Naked Juice and other select juice brands across North Coca-Cola push its energy drink in North America and Molson Coors
category. Asahi Beverages expanded its portfolio and strengthened its
America to PAI Partners for USD 3.3bn (while retaining a 39% non- teaming with Dwayne Johnson to launch energy drink Zoa. The sports
offering to foodservice providers through the acquisition of Allpress,
controlling interest in a newly formed JV); Coca-Cola sold three drinks category is also beginning to see massive changes, as the
New Zealand-based coffee roasters and espresso specialists. Unilever’s success of challenger Bodyarmor has pushed Gatorade to accelerate its
production facilities in the US to Refresco Gerber, the Dutch drinks
spin off of their tea division is expected to materialise in the second half innovation (e.g. low/no sugar, added functional ingredients, caffeine)
producer backed by PE firm PAI Partners, and a majority stake in Made,
of 2021, with the operational separation completed in H1 2021 to create within this previously stagnant segment.
an Australia-based beverage company, to TPG Capital; and Coca-Cola
a stand-alone business with dedicated leadership that is attractive for
European Partners (now Coca-Cola Europacific Partners) completed Coffee shop sales have rebounded well, especially in more residential
either an IPO, partnership, or sale.
its acquisition of Coco-Cola Amatil with the enlarged company serving settings, while the office coffee service (OCS) channel remains highly
a consumer population of over 600 million. challenged. Consumers maintained new habits in at-home coffee
consumption, and we continue to expect this to impact the coffee
segment moving forward. E-commerce has become increasingly
important, as demonstrated by the growth of high-end coffee
subscription plans.
Companies continue to look for alternate paths to reach the consumer,
through appliances like the SodaStream or direct-to-consumer
drinks platforms.
*Publicly disclosed transaction with Rabobank’s involvement Rabobank Corporate Finance Review | September 2021 | 8Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
Non-Alcoholic Alcoholic
Beverages – Alcoholic
M&A activity Food & Agri Market Trends
During Covid-19, the ready to drink (RTD) category has increasingly producer of champagne; and Argentina’s Terold acquired a majority The alcoholic beverage industry survived the closure of the on-premise
gained momentum in the US, driven by consumer trends such as interest stake in WX Brands, one of the US’ largest producers of wines under its in 2020, and is reckoning with the re-opening in 2021. On-premise
in lower sugar, lower calorie and gluten free offerings, as well as own brands as well as those for retailers and other businesses. sales have rebounded rapidly, but are still likely at 80-90% percent of
increased demand for convenient formats that are ideal for casual and pre-pandemic levels. Fewer points of sale are open, but those that are
Given the challenges of Covid-19, consolidation in the beer sector has
at-home occasions. This trend is also notable in this year’s deal activity as open are often doing higher velocity of sales.
been on the small side, such as Heineken’s acquisition of the remaining
Diageo acquired Far West Spirits, owner of the Lone River Ranch Water As a result of the pandemic, can shortages remain a major issue as
hard seltzer, and Sleeman Breweries acquired Aware Beverages, a stake in Brixton Brewery Limited, following their initial 49% stake
investment in 2017, and Royal Unibrew’s acquisition of two Denmark- many players are at risk of not being able to meet consumer demand
Canada-based producer of unsweetened pre-mixed drinks. or having to delay new innovations. Other supply chain issues have
based breweries of soda and beer as well as the recently announced
Consumer trends also motivate continued portfolio expansion into not been a major factor, though we are watching carefully for the
acquisition of French energy drink company MC Energy. Financial
complementary non-alcoholic categories, such as Next Frontier Brands’ potential of an inflation-driven price increase across the industry for
sponsors interest in the sector witnessed the acquisition of City Brewing
acquisition of Fluere Drinks, the Netherlands-based producer of non- the remainder of the year.
Company by Capital Partners, Oaktree Capital Management, and Blue
alcoholic spirits. Premiumization remains a driving force in the industry, and we are
Ribbon Partners, along with management.
H1 2021 was a particularly active period for large-scale wine M&A seeing this notably through the growth of hard seltzer and ready-to-
In the spirit sector, MGP Ingredients acquired Luxco, Inc. in order to drink cocktails more broadly. Both segments are growing rapidly, and
activity: E. & J. Gallo Winery and Constellation Brands, Inc closed the sale
diversify their business, while Halewood Artisanal Spirits completed the at a higher price point than mainstream beer. The growth of these
of over 30 wine brands to Gallo for USD 810m; Vintage Wine Estates
merged with SPAC Bespoke Capital Acquisition Corp. for USD 690m; final stage of their corporate strategy to focus on core artisanal spirits segments has also brought beer companies into more direct
Treasury Wine Estates reached a long-term agreement with The Wine with the sale of Lambrini brand to Accolade Wines (portfolio company competition with their wine and spirits counterparts. We still expect to
Group for several commercial brands in its US portfolio; and The of The Carlyle Group). Beam Suntory, a world leader in premium spirits, see continued growth in e-commerce through platforms such as Drizly,
Duckhorn Portfolio’s IPO valued the company at USD 1.98bn. will assume full ownership of Maxxium Spain via an equity swap with NakedWines, and Wine.com, along with several others, and a greater
The Edrington Group, marking the first time that Beam Suntory will have focus from industry leaders.
Cross border transactions were also rampant in the wine sector: Société
full ownership of its route to market in Spain.
Jacques Bollinger’s acquisition of Ponzi Vineyards, which marked the
French champagne house’s first acquisition beyond French borders as Notable public-market activity in the alcoholic beverages sector included
the company looks to grow its presence in the US; LVMH agreed to Woolworths Group Limited’s spin off of Endeavour Group Limited, an
acquire a 50% stake in Armand de Brignac Holdings, the US-based Australia-based liquor retailer, into a new publicly-traded company.
*Publicly disclosed transaction with Rabobank’s involvement Rabobank Corporate Finance Review | September 2021 | 9Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
Consumer Foods
M&A activity Food & Agri Market Trends
Portfolio optimisation by established food companies continued H1 2021 saw intense M&A activity globally in the bakery industry, Structural changes in the way we live, eat, and source foods will persist
through H1 2021, including the sale of Kraft Heinz’ nuts business to including Pomona Group’s acquisition of DGF through its subsidiary as (partial) work from home continues, and more consumers move to
Hormel Foods; the sale of Tyson Foods’ pet treats business to General Delice & Creation, consolidating the French bakery market; Crown suburban areas with larger kitchens but with more restricted access to
Mills; Noble Foods sale of Gü, UK leader in chilled desserts, to Bakeries’ acquisition of Bagel Boy, Inc., expanding their breakfast restaurants and food on-the-go.
Exponent; Ebro Foods' sale of their Panzani dry pasta business to products portfolio; Rise Baking Company’s acquisition of Brill Inc., This represents a continued occasion loss for foodservice providers,
CVC Capital Partners; Greenyard’s divestment of Greenyard strengthening their product portfolio of specialised products; and Grupo and investing in digitalisation remains a key priority for the foodservice
Prepared Netherlands (producer of preserved mushrooms; and Bimbo’s acquisition of Emmy’s Organics, providing an entry point into industry. The most imminent needs relate to securing adequate digital
Treehouse Foods’ sale of their US-based ready-to-eat cereal business to
the better-for-you cookie and sweet baked goods market. visibility, seamless digital ordering and delivery, and integrating all
Post Holdings.
existing apps and software.
In recent months, the number of restaurant companies announcing IPOs
Proven sector resilience, favourable industry outlook, and high
has increased. Krispy Kreme filed IPO paperwork with the SEC in May; Food manufacturers are also focused on capitalising on the increased
valuations created ideal conditions for heightened deal activity,
salad restaurant chain sweetgreen is preparing for an IPO potentially home-centricity, including rapid acceleration in the move to online
especially among financial sponsors. Private equity buyers were
before the end of the year, as are Torchy’s Tacos and coffee shop chain shopping, customising relationships with customers to enhance
especially keen to expand their portfolio of strong consumer brands,
Dutch Bros Coffee. In the UK, the owner of TGI Fridays has announced growth, and greater commitment towards sustainability.
such as Bain Capital’s acquisition of Irish food company Valeo Foods from
CapVest. Valeo’s brands will join Bain’s portfolio of prominent consumer that it plans to list the restaurant chain later this year. The pandemic has demonstrated consumer demand for ‘comfort’ food
brands, including Burger King and Domino’s Pizza. Many deals aim to raise cash for the corporation itself in order to where taste is king, but at the same time the rise in functional foods
and products that can boost immunity show that health trends are
Many private equity players took advantage of the sector dynamics to reinforce the balance sheet after a troubled year, to fund expansion,
here to stay.
divest to strategics, including The Olayan Group’s sale of Greek snacking or to pay onerous debt. Other deals represent an exit route for existing
company Chipita to Mondelez; Gilde Buyout Partners’ sale of Vivera, a owners. In all cases, listings give access to a different investor profile,
leading European plant based producer, to JBS; and Teachers’ Private such as individuals and funds, pointing to a new phase in
Capital sale of Burton’s Biscuit Company to Ferrero SpA. foodservice offering.
*Publicly disclosed transaction with Rabobank’s involvement Rabobank Corporate Finance Review | September 2021 | 10Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
Supply Chains – F&A Packaging
M&A activity Food & Agri Market Trends
Activities in packaging converters (for both folding carton and plastic) H1 2021 showed stable corrugated market growth in the US, accelerated In 2021, most packaging markets have continued to prove their
continued to be strong in 2021. Consolidation continues to happen, such by Covid-19 (mainly due to e-commerce and increasing focus on resilience and offer stable growth. The foodservice and luxury
as Graphic Packaging’s acquisitions of Americraft and AR Packaging in sustainability). Corrugated capacity is also catching up in Europe, with all packaging segments were negatively affected. That said, we expect
Europe, with the latter acquisition creating a formidable European major corrugated packaging players investing in new corrugators across consumption, especially of glass and foodservice board, to return to
conversion platform. Western and Eastern Europe to meet a significant growth in corrugated normal growth gradually.
Private equity plays an active role in consolidation; for example, Mill Rock box demand (especially for e-commerce needs). Sustained demand in paper packaging and accelerated decline in
acquired Duravant and All Packaging Company, and Shore Capital In metal packaging, there have been several announcements of capacity graphic paper will potentially encourage more entrants to the North
Partners acquired Innovative Packaging Company. The Carlyle Group will American corrugated market, especially via conversion. Covid-19 and
additions for building new beverage can plants. The beverage can
sell their stake in Logoplaste to Ontario Teachers’ Pension Plan (OTPP), e-commerce changed the demand trajectory for corrugated packaging
market has been growing rapidly, especially in North America, and
who continue to expand their interests in packaging companies (post significantly, and we are seeing new plants and rebuilds in response.
supply is tight. Accelerating growth and improving margins continue to
Trivium). Loews will divest a 47% stake in sustainable packaging provider In recent months, the market has seen multiple increases in paper
attract new capacities. For example, Can-Pack announced it will build a
Altium Packaging to GIC, a Singapore-based sovereign wealth fund. packaging prices, driven by tight domestic and global supply-demand
second US beverage can plant in Muncie, after entering the North
More containerboard capacity is also being announced in Europe, via American market in July 2020. This trend could complicate longer-term and higher prices for recovered paper, starch, and other raw materials.
graphic paper mill conversions to packaging paper. We expect to see growth paths. However, in Europe the prices for recovered paper are stabilizing since
more conversion announcements, since graphic paper players are trying collection rates have been improving. In the plastic packaging
to sell their assets instead of shutting them down. This might create The EMEA Food and Consumer Packaging Business of Crown Holdings segment, North America is experiencing a dramatic increase in plastic
some unbalanced supply in the future. Mayr-MeInhof (MM) acquired will be sold to KPS Capital Partners, following similar transactions of packaging resin costs due to supply chain disruptions and weather
both Kotkamills and International Paper’s Kwidzyn mill, balancing their private equity interest in the industry such as Ball MetalPack to Platinum related events.
milling and conversion activities. Equity, and Trivium to OTPP. SPAC Gores Holdings V, sponsored by an
Other major packaging segments are responding to meet growth in
affiliate of the Gores Group, will merge with Ardagh Metal Packaging, a demand, driving deal activity, investments, and conversions. In
The attractive US market has motivated several transactions, including
global leader in the supply of sustainable and infinitely-recyclable particular, beverage can producers have quickly ramped up their
public market activity. In a strategic transaction to accelerate Paper
beverage cans. capacity, which we will see supplying the market coming years.
Excellence’s growth strategy, including entry into the US market, Paper
Excellence will acquire Domtar. Cascades will sell its controlling interest Innovation, on the back of sustainability, is scaling up. Brand owners
in Reno De Medici to Apollo to strengthen their North American presence. are innovating in every packaged goods category to move forward
with their ambitious sustainable packaging strategies.
Rabobank Corporate Finance Review | September 2021 | 11Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
Supply Chains – F&A Logistics
M&A activity Food & Agri Market Trends
A feat of the European market is consolidation led both by international Deutsche Post just announced its intention to acquire JF Hillebrand from Congestion and container shortage is set to worsen before it improves,
players (such as Lineage Logistics, Americold, etc.) and by “domestic” Cobepa, in a strategic acquisition in the dynamic ocean freight and carriers have a new-found power over pricing after years of
players such as STEF. Selected examples include Americold’s acquisitions forwarding market. consolidation. The global price index grew 3-4 times and is expected to
of Bowman in the UK, and Lineage Logistics continued European come down to a level higher than the pre-pandemic period, which is
consolidation with several acquisitions including Claus Sørensen, The high occupancy in the North American cold storage space is positive for carriers and less so for their customers. The impact of this is
Frinavarra and Frioastur, UTI Forwarding, and Kloosterboer. The attracting investors and speculative builders alike, with speculative felt across almost every area of the F&A supply chain. In Europe
market is much more fragmented in Europe compared to the US, and builders building before they have an anchor tenant locked in. In the US, specifically, in addition to container shortages, the impact of Brexit is
this driver is here to stay for the foreseeable future. Lineage Logistics acquired Hanson Logistics, one of the most respected causing relevant issues in terms of workforce.
NewCold has dipped its toes in the M&A market through acquisitions of cold storage organisations in the Midwest. Similar to the congestion problem, cold storage in North America is
Kloosterboer Sweden and Pacaro in Italy. Constellation Cold Logistics In a strategic move into rail, Lineage Logistics announced the acquisition running on high occupancy and is experiencing shortages, especially
continues to expand its network of cold storage and logistics businesses of Cryo-Trans earlier this year, extending its offering to its customers with around ports and near hubs. Also in Europe, there is high demand for
across Europe with the acquisitions of HSH Coldstores in the UK and cold storage and greenfield projects are on the rise, especially for high
the leading provider of refrigerated and insulated railcars and rail
Frigologix in Belgium, and Unternehmensgruppe Theo Müller’s Culina bay fully automated warehouses.
management solutions.
Group is continuing its successful acquisition strategy with the purchase
With inflation and continued growth of labour costs, there is an
of British GreenWhiteStar.
increasing incentive for automation and dark warehouses.
Changing food consumption patterns mainly in relation to the increase
in e-commerce is also a market driver that will influence cold chain
companies in the years ahead.
*Publicly disclosed transaction with Rabobank’s involvement Rabobank Corporate Finance Review | September 2021 | 12Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Farm Inputs Grains, Oilseeds and Sugar Animal Protein Dairy Beverages Consumer Foods F&A Packaging F&A Logistics F&A Startup
F&A Startups and Innovation
Food & Agri Market Trends
In the first half of 2021, F&A startups raised over USD 22.2bn in TPG Capital via TPG Rise Fund led a funding round for The Livekindly In a major step toward quantifying and digitizing produce quality
venture capital (VC) funding across 1,700 deals. While the number of Company, the US-based media platform focusing on food, health, data, Apeel acquired ImpactVision to integrate the company’s
deals completed remained relatively unchanged from the first half of sustainable living, and cruelty-free beauty. Raising USD 335m, hyperspectral imaging technology and related insights (e.g. freshness,
2020, total capital increased by a staggering 64% over the same Livekindly now stands as one of the top 3 highest-funded plant-based nutritional density) in its efforts to reduce food waste. Apeel, a
period, up from USD 13.5bn (according to Pitchbook data). In terms of food companies in the world. Other plant-based meat companies that California-based technology company that invented a protective film
top investment areas, e-commerce and food delivery platforms took secured substantial funding this year included Meatable B.V., a that prolongs the life of produce, also secured USD 250m in Series E,
the top spots, showing continued focus on categories that initially Netherlands-based food company that produces real and guilt-free lending the firm a valuation of USD 2bn.
gained momentum during the Covid-19 pandemic. meat, who raised USD 47m in its series A funding round; and Air In addition, the pandemic shined a light on the critical and immediate
Protein, Inc., the US-based company producing meat made from need for more comprehensive pathogen screening and surveillance.
On the back of triple-digit growth in 2020 over the year prior,
elements of the air, that received USD 32m in funding from ADM This increased focus also translates to food safety, where Clear Labs,
Imperfect Foods, a San Francisco-based sustainable online grocery
Ventures, Barclays and GV (formerly Google Ventures). widely recognized as the pioneer in food safety for listeria and
company, raised USD 110m Series D in January 2021 to further expand
its farm-to-consumer delivery platform for upcycled produce and The cracks in the F&A value chain revealed in 2020 has renewed salmonella detection, raised USD 60m Series C in May 2021 to
groceries. These new investments help strengthen the company’s interest for deals in the areas of food safety and traceability. Bushel, a broaden the availability of their genomic-based food pathogen
commitment to building the leading sustainable online grocery software technology company for Food and Agri businesses, acquired detection technology.
service. FarmLogs to create a stronger digital connection between growers,
commodity buyers, ag retailers, and consumer packaged goods
Plant-based and alternative protein continues to be an active sector
companies.
for innovation and startups, fuelled by consumers’ sustained
heightened attention to health and nutrition.
* FoodBytes! by Rabobank alum Rabobank Corporate Finance Review | September 2021 | 13Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Drawing on our Food & Agri sector expertise and the strength of our relationships worldwide, Rabobank has built a
leading M&A franchise. Business owners turn to us for our network, client-centric focus and outstanding execution to
help them achieve their strategic objectives.
Select Rabobank M&A Transactions
Rabobank Corporate Finance Review | September 2021 | 14Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
About Rabobank
Founded as a cooperative of farmers in the Netherlands Growing a Better World Together Rabobank in numbers
in 1898 to promote financial resilience in the agricultural Rabobank seeks to create extraordinary social impact
sector, Rabobank understands the food and agribusiness together with our clients. We are committed to enabling
industry better than any other bank. Rabobank Group a food-secure future for our world’s population with Lender to the global food and
is a global financial services leader operating in 38 respect to improving availability and access to food, $128bn+ agribusiness value chain
countries worldwide. We are deeply committed to all stimulating balanced nutrition and enhancing the
segments of the food and agribusiness industry and stability of food and agriculture supply chains. Together
are also active in trade and commodity finance for with our clients, Rabobank’s mission is “Growing a Better
agriculture, energy and metals and in the renewable World Together.”
energy space. Rabobank is proud to be a steadfast and
38 Country presence, providing a global
trusted advisor to our clients across the globe. network across all continents
About FoodBytes!
Rabobank built the FoodBytes! innovation platform as an engine for ongoing collaboration between large food and Dedicated M&A bankers, working
agriculture companies, startups and investors working towards a more sustainable food system. What makes the closely together with our global sector
90+ banking team, combining global
FoodBytes! network valuable is the quality of global startups that we scout, which are then rigorously vetted by
network and local knowledge
Rabobank experts. For more information visit the website www.foodbytesworld.com
www.RabobankWholesaleBankingNA.com Rabobank-Wholesale-Banking-North-America @RaboWholesale
Rabobank Corporate Finance Review | September 2021 | 15Key takeways Global M&A activity F&A Sectors Rabobank M&A About Rabobank Contact details
Contact details
Mergers & Acquisitions Sector Banking
Paul Schram Global Head of M&A/ECM Paul.Schram@Rabobank.com David Jacobs Global Head of Sector Banking David.Jacobs@Rabobank.com
+31 (30) 712 3262 +1 (212) 916 7801
Dean Asofsky Head of M&A North America Dean.Asofsky@Rabobank.com Bill Cordingley Sector Head of Grains, Oilseeds Bill.Cordingley@rabobank.com
+1 (212) 916 7937 & Sugar +1 (312) 408 8249
Oscar Nettl Head of M&A Netherlands Oscar.Nettl@Rabobank.com Rodolfo Hirsch Sector Head of Animal Protein Rodolfo.Hirsch@Rabobank.com
+31 (30) 712 4501 +1 (212) 916 7802
Francois Hunaut Head of M&A Europe Francois.Hunaut@Rabobank.com Tommaso Bernardi Sector Co-Head of Consumer Food Tommaso.Bernardi@Rabobank.com
+33 (1) 44718297 & Beverage +31 (6) 11801694
Fabio Mazzo Head of M&A South America Fabio.Mazzo@Rabobank.com James Cass Sector Co-Head of Consumer Food James.Cass@Rabobank.com
+55 (11) 5503 7052 & Beverage +44 (20) 78093853
Chyh Ling Loo Head of M&A Asia ChyhLing.Loo@Rabobank.com Derk van der Erve Sector Head of Farm Inputs Derk.van.der.Erve@Rabobank.com
+65 6230 6780 +31 (30) 712 4564
Tjard Westbroek Sector Head of Supply Chain Tjard.Westbroek@Rabobank.com
+31 (30) 712 3305
Rabobank Corporate Finance Review | September 2021 | 16Food & Agribusiness Corporate Finance Review Unprecedented M&A deal volume in unprecedented times © 2021 Rabobank This document is intended for discussion and information purposes only. Neither this document (including any other materials referenced or provided) nor any other statement (oral or otherwise) made at any time in connection herewith is an offer, solicitation of an offer, invitation or recommendation to acquire or dispose of any securities or to enter into any transaction. Rabobank (as defined below) is not acting as your adviser and potential counterparties are advised to independently review and/or obtain independent professional advice and draw their own conclusions regarding the economic ben- efits and risks of any transaction and legal, regulatory, credit, tax and accounting aspects in relation to their particular circumstances. This document does not oblige Rabobank to enter into any transaction. Any transaction to be entered into will be subject on Rabobank’s completion of due diligence and satisfaction with the results thereof, the appraisal of any applicable collateral security, confirmation of enforceability of legal rights, Rabobank’s internal approvals including without limitation the approval of its credit committee, there being no adverse change in the condition of the parties to the proposed transaction or in the financial markets generally, and the negotiation and execution of final documentation in form and substance satisfactory to Rabobank, among other conditions. Rabobank may have positions in or options on the securities or commodities mentioned in this document or any related in- vestments or may buy, sell or offer to buy or sell such securities, commodities or any related investments as principal or agent on the open market or otherwise, which may impact the performance of a transaction. Rabobank makes no representations as to any matter or as to the accuracy or completeness of any statements made herein or made at any time orally or otherwise in connection herewith and all liability (in negligence or otherwise) in respect of any such matters or statements is expressly excluded, except only in the case of fraud or wilful deceit. Past performance is not a guarantee or indication of future results. Any prices provided in this document or other materials (other than those that are identified as being historical) are indicative only and do not represent firm quotes as to either price or size. You should contact your local representative directly if you are interested in buying or selling any financial instrument or other product or pursuing any trading strategy that may be mentioned in this document. In this notice “Rabobank” means Coöperatieve Rabobank UA (whether or not acting by its New York Branch) and any of its associated or affiliated companies and directors, representatives or employees. With respect to this notice, in the US, any banking services are provided by Coöperatieve Rabobank UA, New York Branch and any securities related business is provided by Rabo Securities USA, Inc., a US registered broker dealer. Growing a better world together
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