卡斯卡迪亚资本配料行业更新——2023年冬季

Ingredients Industry ReportW i n t e r2 0 2 3 E X T E N S I V ET R A N S A C T I O N E X P E R I E N C E W I T H S P E C I A L I Z E D P R I N C I P A L S E C TO R F O C U SCascadia Ingredients Practice Overview Overview Cascadia Capital’s Food, Beverage, and Agribusiness team has 19 dedicated members with extensivetransaction and advisory experience in the ingredients space and across the entire food, beverage, andagribusiness supply chain. Business ServicesConsumer & RetailEnergy & Applied Technology Cascadia’s Ingredients coverage team uses extensive knowledge of the industry, including trends, buyerlandscape and strategy, as well as deep transaction and advisory experience to best position our clientsand maximize outcomes. Ingredients sub-sector coverage includes: Cascadia Primary Contacts Food, Beverage & Agribusiness Ingredients Sub-Sector Coverage •Primary Processed Fruit and Produce•Pulses, Flours, and Starches•Spices, Sauces, Blends, and Bases•Sweeteners, Confections, and Bakery•Flavors, Extracts, Aromas, and Colors•Texturants, Emulsifiers, and Gums•Nutraceuticals, Botanicals, and FunctionalIngredients Healthcare Asher NelsonSenior AssociateANelson@cascadiacapital.com(503) 913-5785 George SentManaging DirectorGSent@cascadiacapital.com(234) 380-3242 Robotics, Automation &Artificial Intelligence Select Recent Ingredients Transactions Executive Summary D E S P I T EM A C R O E C O N O M I C H E A D W I N D S ,T H E M & A O U T L O O K F O R P R E M I U M ,O N-T R E N DI N G R E D I E N T SA S S E T S R E M A I N S T R O N G M&A activity for Ingredients is expected to stay active compared to the overall market bolstered by strong consumer demand,competition from private equity for scarce, profitable assets, and strategics filling product gaps in emerging subsectors Concerns over rising interest rates, supply chain uncertainty, and inflationary pressures have caused economic uncertainty but are expected to abate •Interest rates continue to increase to combat inflation but are expected to peak in mid-2023•Producer price inflation is beginning to ease, especially for ingredients in non-ag sectors, and the gap between the consumer price index is shrinking indicating ability tobetter pass costs onto consumers to recover margin Continued change in consumer preferences towards sustainable and healthy foods fuel growth for clean-label and functional ingredients •Consumers are willing to pay a premium for sustainability, health, and fitness and expect to maintain spend in these categorieseven in an economic downturn•Strategics are adapting their strategies to meet consumer preferences by investing in natural and clean label products and filling portfolio gaps through acquisitions While plant-based food brands have seen mixed results at the retail level, plant-based protein ingredients providers are experiencing rising demand •The pulse industry has seen a substantial increase in product innovation tied to new use cases in plant-based protein, food systems, and pet food•With rising demand for pulses, there is a gap between current supply; destabilization in Ukraine is expected to further relianceon North America•Ingredients strategics are moving to increase production of plant-based protein ingredients to meet consumer demand and seekingacquisitions for greater supply chaincontrol and to enhance product capabilities and protect market share •Ingredients stocks and valuation multiples have performed well during both COVID and the last year and are less sensitive tobroader market turbulence•Ingredients strategics are generating record free cash flow against strong financial results and are positioned for M&A in 2023 M&A markets broadly are experiencing a flight to quality as credit volatility and broad-based economic uncertainty has slowed the pace of dealmaking in2022 after a historic run •Private equity transactions have softened but remain competitive for profitable, risk averse, middle market assets with debtcapacity•Despite decreased fundraising, financial investors, who hold high amounts of dry powder, will necessitate continued deal flow, and in many cases, for top quality assets,valuations are flat to even up, as these assets are increasingly scarce and targeted by funds seeking profitability •Ingredients have become an increased subsector of focus for private equity with many new platform investments seeking bolt-on acquisitions•Strategics are willing to pay premiums for assets with synergies or that complement existing portfolios I.Key Economic TrendsII.Ingredients Industry TrendsIII.Ingredients Public Market PerformanceIV.Ingredients M&A ActivityV.Cascadia Capital Update Key Economic Trends Key Economic Trends to WatchC O N C E R N SO V E R R I S I N G I N T E R E S T R A T E S ,S U P P L Y C H A I N U N C E R T A I N T Y ,AN D I N F L A T I O N A R YP R E S S U R E S H A V E C A U S E D E C O N O M I C U N C E R T A I N T Y A N D S L O WE D T H E P A C EO FD E A L-M A K