M&A in the

retail and consumer

products industry
Valuation multiples
May 2017
 Contents
Introduction 3

Main conclusions 4

Scope of our analysis 6

Industry and macroeconomic

8
highlights
M&A valuation multiples 12

Listed company valuation multiples 22

Equity market sentiment in Spain 30

Appendices 31

2 | EY mergers and acquisitions in the retail and consumer products industry

Introduction
EY is pleased to present the fourth edition of its global analysis of the
valuation multiples trend for the 2005—16 period in the retail and
consumer products industry (R&CP) industry, with special emphasis
on the Spanish market.

Our report analyzes, by subindustry and geographic location, the

deal volumes, EBITDA valuation multiples paid, and stock prices for
2005—16, as well as current equity analyst recommendations.

Our R&CP industry analysis for 2005—16 covers:

• In Spain: 1,395 transactions

• In Europe: 15,201 transactions

• In North America (US and Canada): 8,569 transactions

• In Spain, Europe and North America, a total of 219 listed

companies

EY mergers and acquisitions in the retail and consumer products industry | 3

 Executive summary
• The year 2016 was characterized by a volatile climate as a result
of several factors, including uncertainty in the general elections
in Spain, the result of the referendum on the United Kingdom’s
withdrawal from the European Union, the impact of the United
States presidential election and the persistence of geopolitical
tensions.

• Despite these events, consumption growth remained positive

in 2016. We predict this upward trend will continue in 2017,
supported by favorable economic sentiment and expectation
indicators, and economic and employment recovery.

• Given the turnaround in industry fundamentals and valuation

multiples, we expect a gradual rise in deal volumes in the medium

Main term, supported by current market fragmentation and the ever-

present competitive pressure caused by private labels.

conclusions • Spanish M&A transaction prices within the R&CP sector continue
to rise. In 2016, the enterprise value paid for R&CP companies
averaged 11.4x EBITDA, up from 11.1x EBITDA in 2015. These
results incorporate the prior leap from the 2011 average of 8.0x
EBITDA and places prices during 2016 above the pre-crisis years
(2004—07).

• The slowdown in deal volume (measured in euros) in 2016

[gehYj]\oal`*()-ak\m]lgl`]afÖYlagfg^l`]E9eYjc]l
in the prior year by major transactions such as Anheuser-Busch
InBev, Coca-Cola and Koninklijke Ahold.

4 | EY mergers and acquisitions in the retail and consumer products industry

M&A valuation multiples(1)
• In Europe, the 2016 average valuation multiple was 9.0x,
somewhat lower than the 2005—16 historical average of 9.9x
enterprise value to EBITDA ratio (EV/EBITDA), standing at similar
levels to the average multiple of 9.3x EV/EBITDA observed during
the crisis period of 2009—12.
• In North America, the average valuation multiple during 2016
was 10.2x EV/EBITDA, higher than the 2005—16 average
multiple of 9.6x, showing a gradual increase from 8.5x EBITDA in
2011.
• In Spain, the historical average valuation multiple (2005—16) is
10.1x EV/EBITDA. In 2016, the average valuation multiple was
11.4x, slightly higher than the 2015 average valuation multiple
of 11.1x.
• A^o]Zj]Yc\gof\]YdkZqkar]$Yka_faÕ[Yfl\a^^]j]f[]af
valuation multiples can be observed, with higher multiples on the
larger deals.
Listed company valuation multiples
• At the end of 2016, R&CP public companies in Spain traded at
11.7x EV/EBITDA, similar to their North American (11.9x) and
European (11.6x) counterparts.
• Nevertheless, in the three geographic locations, valuation
multiples of R&CP companies traded above the historical average.
For 2016, Spain’s multiple was 11.6x EV/EBITDA vs. the 11.2x
average for 2005—16; Europe’s multiple was 11.7x vs. the 10.6x
average for 2005—16; and North America’s was 12.4x vs. 10.6x.
• Among the 16 Spanish companies analyzed, only 11 were
followed by equity research analysts, without a clear consensus
recommendation on wether to buy, sell or hold the stock. At the
]f\g^*().$[gfka\]jaf_l`]k]))[gehYfa]kYkYo`gd]$-.g^
]imalqYfYdqklkj][gee]f\lgZmq$o`ad])-j][gee]f\lgk]dd
Yf\*1lg`gd\&LYj_]lhja[]ko]j]$gfYn]jY_]$)0&.YZgn]
share prices at the end of 2016.

• The number of transactions in the various markets in 2016

compared with the previous year highlights the degree of
reduction within the three geographic locations analyzed. The
\][daf]akhYjla[mdYjdqka_faÕ[YflafKhYaf$oal`Y,1\][j]Yk]af
2016, reverting to normalized levels observed during 2012—14.
The decrease is primarily attributable to the lower number
of transactions in the food and beverage industry compared
to 2015, in which there was an atypically high number of
ljYfkY[lagfk&Fgjl`9e]ja[YYf\=mjgh]k`goY\][j]Yk]g^.
Yf\+j]kh][lan]dq&

(1)
Emdlahd]k[Yd[mdYl]\gfj]hgjl]\ fglfgjeYdar]\!=:AL<9Õ_mj]k&

EY mergers and acquisitions in the retail and consumer products industry | 5

Scope of our analysis

The purpose of this report is to analyze the R&CP industry in Spain
from a valuation perspective, covering multiples paid in transactions
that took place between 2005 and 2016, as well as the trend in the
listed companies’ valuation multiples during the same period.
A similar valuation analysis has been performed for the European
and North American (US and Canada) markets for comparison.
Our analysis is broken down into the following subindustries:
• Food and beverage
• Household and personal care products
• Retail (food, clothing and apparel)
Listed company valuation multiples
• For the listed companies’ valuation multiples analysis, we covered
16 Spanish R&CP listed companies, although it is important to
note the limited presence of these companies on the Spanish
stock market. Important companies, such as El Corte Inglés or
Mercadona, are not listed, whereas others (e.g., Carrefour) are
listed outside of Spain. In addition, there are some subindustries
(restaurants and household and personal care products) that have
no presence on the Spanish stock market.
• Due to the size of the European and North American markets, we
covered a greater number of listed companies for these regions
(92 in Europe and 111 in North America).

• Restaurants

M&A valuation multiples

• Our analysis covers transactions that took place in the Spanish

market between 2005 and 2016 in the R&CP industry. We
a\]flaÕ]\YlglYdg^)$+1-\]Ydkoal`afl`Ylh]jag\afl`]^gmj
subindustries listed.

• >gjl`]=mjgh]YfeYjc]l$o]a\]flaÕ]\)-$*()\]Ydkafl`ak
industry for 2005—16, and 8,569 transactions in North
America during the same period.

• >gjYdda\]flaÕ]\ljYfkY[lagfk$o]gZlYaf]\km^Õ[a]fl\YlYlg
estimate the valuation multiple for more than 1,000 deals,
distributed in the three geographic locations analyzed.

6 | EY mergers and acquisitions in the retail and consumer products industry

Selected listed companies in the Spanish market for valuation purposes

Number of selected Number of selected

Subindustry Criteria for the selection of companies
companies 2016 companies 2015
Food and beverages 11 10 Selection of companies included in the Bolsas and Mercados Españoles stock exchange
(BME) food and beverage subindustry and EY selection
Retail (food, clothing and 5 5 Selection of companies included in the BME's apparel and retail subindustry and EY
apparel) selection
Household and personal - - There are no listed companies in this subindustry
care products
Restaurants - - There are no listed companies in this subindustry

Total 16 15

Selected listed companies in the European market for valuation purposes

Number of selected Number of selected

Subindustry Criteria for the selection of companies
companies 2016 companies 2015
Food and beverages 21 22 Companies included in the STOXX Europe 600 Food & Beverage Index
Retail (food, clothing and 29 31 Companies included in the STOXX Europe 600 Retail Index
apparel)
Household and personal 36 33 Companies included in the STOXX Europe 600 Personal & Household Goods Index
care products
Restaurants 6 9 EY selection from main companies in this subindustry

Total 92 95

Selected listed companies in the North American market for valuation purposes

Number of selected Number of selected

Subindustry Criteria for the selection of companies
companies 2016 companies 2015
Food and beverages 27 26 Companies included in the STOXX North America 600 Food & Beverage Index
Retail (food, clothing and 43 43 Companies included in the STOXX North America 600 Retail Index
apparel)
Household and personal 32 33 Companies included in the STOXX North America 600 Personal & Household Goods Index
care products
Restaurants 9 26 EY selection from main companies in this subindustry

Total 111 128

Source: EY analysis based on Capital IQ.

Selection of listed companies in Spain and market capitalization as of 31 December 2015 and 31 December 2016 (based on the
:E=[dYkkaÔ[Ylagf!

Market capitalization Market capitalization Retail (food, clothing Market capitalization 31 Market capitalization 31
Food and beverages
+)<][]eZ]j*(). Ñe! +)<][]eZ]j*()- Ñe! Yf\YhhYj]d! <][]eZ]j*(). Ñe! <][]eZ]j*()- Ñe!
Coca-Cola European Partners 14.502 - Inditex 100.959 98.656
Ebro Foods 3.063 2.793 DIA 2.865 3.389
Viscofan 2.183 2.593 Dogi International Fabrics 280 65
Baron de Ley 514 477 Adolfo Domínguez 30 32
Telepizza Group 455 - Liwe Española 21 19
Naturhouse Health 285 -
Deoleo 266 266
Borges Agricultural & 65 13
Industrial Nuts
Natra 32 15
Bodegas Riojanas 22 22
Bodegas Bilbaínas 19 18

Source: EY analysis based on Capital IQ.

EY mergers and acquisitions in the retail and consumer products industry | 7

Industry and macroeconomic
highlights
After exceeding 600 basis points (bp) in July 2012, and largely
as a result of the expansionary monetary policy promoted by the
European Central Bank (ECB), the sovereign risk premium stood
at 116bp at the end of December 2016. However, 2016 has been
characterized by a volatile climate due to various factors, including
uncertainty in the general elections in Spain, the result of the
referendum on the United Kingdom’s withdrawal from the European
Union, the impact of the United States presidential election and the
persistence of geopolitical tensions.
The Spanish gross domestic product (GDP) growth in 2016 was
+&*$afdaf]oal`l`]_jgol`g^+&*]ph]ja]f[]\af*()- j]nak]\
data as at December 2016, according to the Spanish Ministry
of Economy, Industry and Competitiveness). This highlights
the continuity of the Spanish economic recovery, which began
in 2013. This recovery has been driven mainly by the national
demand, which is motivated by private consumption and productive
afn]kle]fl&HjanYl][gfkmehlagf`YkZ]f]Õl]\^jgek]n]jYd
^Y[lgjk$km[`Ykl`]j][gn]jqaf[gfkme]j[gfÕ\]f[]$l`]af[j]Yk]
in disposable income and the availability of new credit in a lower
interest rate environment. Consumption experienced a continual
aehjgn]e]fl\mjaf_*().$af[j]Ykaf_[aj[Y+&,&
AfFgn]eZ]j*().$l`]?]f]jYdJ]lYadLjY\]Af\]paf[j]Yk]\+&+
from the previous year (latest revised data as at December 2016).
Also, in the same month, the average occupancy rate in the retail
af\mkljq]ph]ja]f[]\Y)&/af[j]Yk]^jgel`]hj]nagmkq]Yj&
L`];gfkme]j;gfÕ\]f[]Af\]p ;;A!af<][]eZ]j*().oYk
100.7 points, the index maximum during 2016, although below the
historic maximum reached in 2015 (6.7 points below December
2015). This slight improvement is due to a better valuation of
8 | EY mergers and acquisitions in the retail and consumer products industry
the present situation, and despite the 0.9-point decrease in the
Expectations Index in December 2016. The CCI recovered and,
in December 2016, exceeded the decrease experienced, closing
with the highest values of the year. On the other hand, the Present
Situation and the Expectations indices register an interannual
\][j]Yk]g^+&+Yf\1&,j]kh][lan]dq&
The Present Situation Index was 92.2 points in December 2016,
+hgaflkZ]dgol`]<][]eZ]j*()-Õ_mj]afYZkgdml]l]jek&L`ak
evolution is a consequence of the decrease in the perception of
the employment conditions and the general economy of 3 and 6.1
hgaflkZ]dgol`]hj]nagmkq]Yj£kÕ_mj]kj]kh][lan]dq$o`ad]l`]
valuation of family income has remained steady, with no change in
the year.
The Expectations Index shows unfavorable evolution in interannual
terms, reaching 109.3 points in December 2016, 10.3 points
below the previous year in absolute terms. This is the result of an
aggregate annual decline in expectations for the general economy,
employment conditions and family income economic situation of
1&0$))&*Yf\,&-j]kh][lan]dq&
It should be noted that the Spanish economy expansion has been
kmhhgjl]\Zql`]^YngjYZd]afÖYlagf\a^^]j]flaYdYkYj]kmdlg^l`]
reforms carried out in previous years. With respect to the Eurozone,
this has meant an improvement in competitiveness coupled with
Yhgkalan]aehY[lgf]phgjlk&@go]n]j$l`]\]ÖYlagfYjqaehY[l
`Yk[Ymk]\Y\n]jk]]^^][lk$]kh][aYddqafl`]Õk[YdYj]Y$o`]j]l`]
prices decrease has led to a lower level of tax revenues.
 Real GDP, private consumption growth and unemployment rate in Spain

6% 5%

5%

4%
Real GDP and private consumption growth

10%
3%

2%

Unemployment rate
1% 15%

-1% 20%
-2%

-3%
28%
-4%

-5%

-6% 30%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Real GDP growth (%) Private consumption growth (%) Unemployment rate (%)

Source: EY analysis based on IMF, INE and EY Eurozone Forecast as of December 2016.

;gfkme]jhja[]af\]p ;HA!_jgol`afKhYaf

6.0%

5.5%

5.0%

4.5%

4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

-0.5%

-1.0%

-1.5%

-2.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

CPI growth (%)

Source: EY analysis based on IMF and EY Eurozone Forecast as at December 2016.

EY mergers and acquisitions in the retail and consumer products industry | 9

 Private consumption growth and consumer sentiment index in Spain

6% 40%

30%
4%
Private consumption growth

Consumer sentiment index

20%
2%
10%

0% 0%

-10%
-2%
-20%
-4%
-30%

-6% -40%
Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 Jan 17 Jan 18 Jan 19

Private consumption growth (%) Consumer sentiment index. Annual variation (%)

Source: EY analysis based on Ministry of Economy, Industry and Competitiveness and Centro de Investigaciones Sociológicas (CIS), as of 2016.

;gfkme]j[gfÔ\]f[]Yf\]ph][lYlagfkafKhYaf

120%

100%

80%

60%

40%

20%

0%
Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 Jan 17

CCI Present situation index Expectations index

Source: EY analysis based on CIS.

10 | EY mergers and acquisitions in the retail and consumer products industry

Consumer spending in Spain is mainly driven by the home The year 2015 shows an improvement in the average
and supplies, hotels and restaurants, food and beverages, ]ph]f\almj]h]j`gmk]`gd\$gZk]jn]\^gjl`]Õjkllae]kaf[]
transportation, and other goods and services subindustries. 2008. Increases in the average expenditures are measured in
both current and constant terms.
Since 2006, average expenditure per household has been
increasing, reaching its maximum level in 2008. Since then and Regarding the structure and the different groups of expenditure,
until 2014, the average expenditure decreased gradually. This education has experienced the greatest growth since 2006,
decline was followed by an increase in average expenditure per oal`YfYn]jY_]YffmYdaf[j]Yk]g^+&1&Aflmjf$`ge]Yf\
household in 2015, reaching the maximum seen in the past supplies is where households have increased their proportion
three years. Despite the trend change, the average expenditure g^kh]f\af_l`]egklYkYh]j[]flY_]g^l`]lglYd ^jge*,&1
h]j`gmk]`gd\afl`]*((.È)-h]jag\`Yk\][j]Yk]\Zq1&+& af*((.lg+)&0af*()-!&;gfn]jk]dq$ljYfkhgjlYlagfakl`]
group whose weight has been mostly reduced since 2006 (from
),&-g^l`]lglYdlg))&-af*()-!&

Final consumption growth at current prices

140,000
Household consumption (€ million)

120,000
Hotels and restaurants

100,000
Food and non-alcoholic
beverages
80,000 Transportation

60,000 Other goods and services

Leisure and culture

40,000
Alcohol and tobacco Health care
Home renovation Apparel and
20,000 footwear
Education
Communications
0
-6% -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6%
CAGR 06-15 (%)
Source: EY analysis based on INE.

Real GDPh]j[YhalY Ñ! @gmk]`gd\ÔfYd[gfkmehlagf]ph]f\almj] Ñe!

25,500 615,000
613,760

25,000 610,000
607,981 608,153

24,500
605,000

24,000 600,532
600,000
597,918
23,500 23,300 595,010
23,200 595,000
23,000
22,900
23,000
590,000 587,697
22,300
22,500
22,200
21,900 585,000
22,000

580,000
21,500

21,000 575,000
2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015

Real GDP per capita @gmk]`gd\ÕfYd[gfkmehlagf]ph]f\almj]

Source: EY analysis based on Eurostat. Source: EY analysis based on INE.

EY mergers and acquisitions in the retail and consumer products industry | 11

M&A valuation multiples

M&A valuation multiples in the European market

O]a\]flaÕ]\)-$*()ljYfkY[lagfkafl`]J;Haf\mkljqaf=mjgh] multiples above 10.0x and reverts back to those observed in the
during 2005—16 in the following subindustries: 2009—12 period.

• >gg\Yf\Z]n]jY_]k
• @gmk]`gd\Yf\h]jkgfYd[Yj]hjg\m[lk
• J]lYad ^gg\$[dgl`af_Yf\YhhYj]d!
• J]klYmjYflk
G^l`]lglYdfmeZ]jg^ljYfkY[lagfka\]flaÕ]\$o]gZlYaf]\km^Õ[a]fl
data to calculate valuation multiples for 569 deals. Outliers have
been excluded in order to avoid distortions in our analysis.
In Europe, the EV/EBITDA average multiple during the 2005—16
period was 9.9x. In 2016, the average multiple experienced a decline
to 9.0x. This implies an end to the three-year period of average
O`]fYfYdqr]\Zq\]Ydkar]$ka_faÕ[Yfl\a^^]j]f[]kafemdlahd]k[YfZ]
seen, with larger transactions showing greater multiples from 2013
to 2015.
The following graph shows completed R&CP deals from 2005 to
2016, as well as reported deal volume. Figures are shown for the
industry as a whole, as well as by subindustries. There is a greater
number of transactions in the food and beverage subindustry, which
eYaflYafkYfgn]jYddljYfkY[lagfkhjghgjlagfg^YhhjgpaeYl]dq-,
of the total amount in the period from 2005 to 2016. The number
of transactions has decreased in all the subindustries compared with
the previous year, with the exception of retail, which increased in the
last two years.

Number and reported volume of R&CP transactions in Europe

1,800 950 1,454 1,659 1,407 1,156 1,402 1,476 1,321 1,027 1,059 1,165 1,125 80,000

1,600 70,000
212

1,400
202 300 60,000
191
Number of transactions

343 283
1,200 227
50,000
Volume (€m)

306 194
105 311 206 173
1,000 348 183
344 328 183
134 79 40,000
78 260 273
800 308 71
77 78 223 237
257 30,000
97 71
600 65 62 69
61 999
867 20,000
400 827 757
698 688
577 559 570 614 608
498 10,000
200

0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Food and beverages Household and personal care products Retail Restaurants Total volume (€m)

(1) Volume correponds to transactions with public available information.

Source: EY analysis based on Capital IQ and Bloomberg.

12 | EY mergers and acquisitions in the retail and consumer products industry

The following graphs show the annual average EV/EBITDA multiple for the deals considered (i.e., those with available
information, excluding outliers) for 2005—16. Figures are also shown for the industry as a whole as well as by the subindustries
analyzed. The highest multiple of the analyzed subindustries in 2016 is retail at 10.7x, despite being the subindustry with the
lowest multiple the previous year. The lowest multiple is household and personal care products at 8.3x.

EV/EBITDA transactions in Europe

Total R&CP

12.0x 11.4x 11.3x 12.0x

10.7x
10.1x 9.7x 10.0x 10.1x
9.5x
10.0x 10.0x
9.2x 9.2x 8.7x 9.0x
8.0x 8.0x

6.0x 6.0x

4.0x 4.0x

2.0x 2.0x

0.0x 0.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total R&CP Historical average

Source: EY analysis based on Capital IQ and Bloomberg.

EV/EBITDA transactions in Europe

Total R&CP

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Transactions
> 1,000 €m 10.9x 11.4x 12.6x 11.8x 15.6x 16.6x 11.3x 8.4x 11.9x 11.0x 11.6x 7.7x

Transactions
< 1,000 €m 9.1x 9.9x 11.2x 10.7x 9.0x 9.3x 9.3x 8.7x 11.2x 9.8x 10.0x 8.9x

Source: EY analysis based on Capital IQ and Bloomberg.

EY mergers and acquisitions in the retail and consumer products industry | 13

EV/EBITDA transactions in Europe EV/EBITDA transactions in Europe
Food and beverages Retail

14.0x 14.0x
12.9x
12.0x 12.1x
12.0x 12.0x
10.8x 11.0x 10.7x 10.7x
10.2x 10.0x 10.2x 10.2x 10.1x
10.0x 9.5x 9.3x 10.0x 9.2x 9.4x 9.3x
9.0x 8.8x 8.7x 9.0x
8.7x 8.5x
8.4x
8.0x 8.0x

6.0x 6.0x

4.0x 4.0x

2.0x 2.0x

0.0x 0.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Food and beverages Retail

Source: EY analysis based on Capital IQ and Bloomberg. Source: EY analysis based on Capital IQ and Bloomberg.

EV/EBITDA transactions in Europe EV/EBITDA transactions in Europe

Household and personal care products Restaurants

16.0x 14.0x
14.7x
14.0x 13.7x
12.0x
12.7x 11.0x
10.7x
12.0x 11.5x 10.2x 10.0x
10.0x 9.9x 9.7x
10.6x 9.3x 9.4x 9.4x 9.5x
10.3x 10.2x 8.9x
10.0x 9.5x 9.7x 8.2x
9.0x
8.0x
8.3x
8.0x
6.5x 6.0x
6.0x
4.0x
4.0x

2.0x 2.0x

0.0x 0.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Household and personal care products Restaurants

Source: EY analysis based on Capital IQ and Bloomberg. Source: EY analysis based on Capital IQ and Bloomberg.
(1) 2009 multiple is not meaningful (related to one single transaction). (1) 2012 multiple is the same as 2011, since there were no transactions available.

14 | EY mergers and acquisitions in the retail and consumer products industry

M&A valuation multiples in the North American market
Afl`]MKYf\;YfY\Y$o]a\]flaÕ]\0$-.1ljYfkY[lagfkafl`]J;H O`]fYfYdqr]\Zq\]Ydkar]$ka_faÕ[Yfl\a^^]j]f[]kafemdlahd]kYj]
industry between 2005 and 2016, which can be broken down into seen, with larger transactions exhibiting greater multiples since
the following subindustries: 2012.

• >gg\Yf\Z]n]jY_]k The following graph shows completed R&CP deals from 2005
• @gmk]`gd\Yf\h]jkgfYd[Yj]hjg\m[lk to 2016 as well as reported deal volume. Data is shown for the
aggregate industry as well as the four analyzed subindustries. The
• J]lYad ^gg\$[dgl`af_Yf\YhhYj]d!
North American market decreased its activity (in volume) for the
• J]klYmjYflk Õjkllae]kaf[]*((1&L`ak\][daf]oYkd]\Zqj]klYmjYflk$o`a[`
continues with the downward trend of the last three years, as
G^l`]lglYdljYfkY[lagfka\]flaÕ]\$o]gZlYaf]\af^gjeYlagflg o]ddYkj]lYad$oal`Y*(\][j]Yk]afl`]fmeZ]jg^ljYfkY[lagfk
calculate valuation multiples for 393 deals. Outliers have been compared with the previous year. The food and beverages,
excluded in order to avoid distortions in our analysis. and household and personal care subindustries remain stable
and increase their relative percentage of the total number of
The average EV/EBITDA multiple for the transactions completed transactions.
in North America in 2016 is 10.2x, above the historical average
during 2005—16 of 9.6x.

Number and reported volume of R&CP transactions in North America

1,000 497 659 713 624 499 626 723 810 811 871 895 841 160,000

900
140,000
800
230
244 215 120,000
Number of transactions

700 197
248
156
Volume (€m)

600 184 100,000

142
155 140 205 163
182
500 214 80,000
79 177 163 192
156 131
400 125 149 108 110
97
125 76 93 60,000
83 80 67
300 76 110 78
63
59 352 353 40,000
200
348
278 304 268 296 306 304
230 259
100 199 20,000

0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Food and beverages Household and personal care products Retail Restaurants Total volume (€m)

(1) Volume corresponds to transactions with public available information.

(2) Voume in 2015 increases because of transactions bigger than the ones of the historical years.

Source: EY analysis based on Capital IQ and Bloomberg.

EY mergers and acquisitions in the retail and consumer products industry | 15

For the period 2005—16, the following graphs show the annual average EV/EBITDA multiple for the deals considered (i.e., those
with available information, excluding outliers). Data is also shown for the aggregate industry and the four analyzed subindustries.

In 2016, the North American market showed a different growth trend from the European market, with retail showing the lowest
multiple (at 6.8x). Household and personal care products was the subindustry with the largest multiple (at 11.5x), despite the fact
that, together with retail, it is a subindustry with decreasing multiples.

EV/EBITDA transactions in North America

Total R&CP

12.0x 12.0x
10.9x
10.1x 10.2x 10.2x
9.6x 9.4x 9.2x 9.8x 9.7x
10.0x 8.9x 10.0x
8.6x 8.5x
8.0x 8.0x

6.0x 6.0x

4.0x 4.0x

2.0x 2.0x

0.0x 0.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total R&CP Historical average

Source: EY analysis based on Capital IQ and Bloomberg.

EV/EBITDA transactions in North America

Total R&CP

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Transactions
> 1,000 €m 10.9x 11.1x 11.6x 11.4x 9.9x 9.7x 6.9x 10.3x 10.6x 12.1x 10.9x 12.3x

Transactions
< 1,000 €m 9.2x 9.9x 9.9x 8.7x 9.0x 8.2x 8.8x 8.6x 9.3x 9.7x 9.1x 9.9x

Source: EY analysis based on Capital IQ and Bloomberg.

16 | EY mergers and acquisitions in the retail and consumer products industry

EV/EBITDA transactions in North America EV/EBITDA transactions in North America
Food and beverages Retail

14.0x 12.0x

11.7x 11.9x 10.2x 10.1x

12.0x 11.7x
10.9x
10.0x 9.3x 9.3x 9.5x
10.5x 10.5x 9.2x 9.1x
10.2x 8.5x
10.0x 9.7x 8.2x
9.4x 9.3x
8.8x 8.0x 7.5x 7.4x
8.2x 6.8x
8.0x
6.0x
6.0x
4.0x
4.0x

2.0x 2.0x

0.0x 0.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Food and beverages Retail

Source: EY analysis based on Capital IQ and Bloomberg. Source: EY analysis based on Capital IQ and Bloomberg.
(1) 2016 multiple is affected by a multiple 4x transaction (Coinstar, LLC).

EV/EBITDA transactions in North America EV/EBITDA transactions in North America

Household and personal care products Restaurants

20.0x 12.0x
19.1x
11.0x
18.0x 10.5x
10.3x
10.0x 9.9x
9.4x
15.0x 9.0x
14.8x
13.0x 8.0x 7.9x 7.7x 7.9x
7.5x 7.3x
11.8x 11.5x

10.0x 10.0x 9.6x

9.2x 9.6x 9.3x 6.0x
8.8x
4.4x
4.0x
5.0x
2.0x

0.0x 0.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Household and personal care products Restaurants

Source: EY analysis based on Capital IQ and Bloomberg. Source: EY analysis based on Capital IQ and Bloomberg.
(1) 2011 multiple is not meaningful (related to a single transaction). (1) 2013 multiple is not meaningful (related to one single transaction).
(2) 2015 multiple is not meaningful (related to a single transaction). (2) In 2015, there are only two multiples of 7x whereas in 2014, there were seven multiples.

EY mergers and acquisitions in the retail and consumer products industry | 17

M&A valuation multiples in the Spanish market
Oal`afl`]KhYfak`eYjc]l$o]a\]flaÕ]\)$+1-J;HljYfkY[lagfk the pre-crisis levels (period 2005—07), in 2016, the number of
from 2005 to 2016 in the following subindustries: transactions fell back to the levels observed during 2012—14.
This was explained by the competition of the sector due to a rise
• >gg\Yf\Z]n]jY_] in private labels and industry fragmentation, which resulted in the
• @gmk]`gd\Yf\h]jkgfYd[Yj]hjg\m[lk consolidation of operators of a certain size.

• J]lYad ^gg\$[dgl`af_Yf\YhhYj]d!
• J]klYmjYflk
From the total of completed transactions, we obtained information
for calculating valuation multiples for 149 operations. Outliers have
been excluded in order to avoid distortions in the conclusions of the
analysis.
9^l]jYka_faÕ[Yflaf[j]Yk]g^E9Y[lanalqafJ;HafKhYafaf
*()-$l`]j]oYkYka_faÕ[Yfl^Yddafngdme]af*().&Af[gfljYkllg
what happened in 2015, when the number of transactions reached
The historical average multiple for completed transactions in
2005—16 is 10.1x EV/EBITDA and, for 2016, it is 11.4x, the
highest data from the period 2005—16.
The following graph presents completed R&CP deals from
2005—16 as well as the reported deal volume. Data is shown for
the aggregate industry and the four analyzed subindustries. As
hj]nagmkdqe]flagf]\$l`]j]oYkYka_faÕ[Yfl\][j]Yk]af*().
Y^l]jl`]))1af[j]Yk]afl`]fmeZ]jg^ljYfkY[lagfk^jge*(),
to 2015. Deals in the food and beverages subindustry exhibited the
largest multiple in 2016 (13.5x).

Number and reported volume of R&CP transactions in Spain

200 92 169 176 141 125 121 104 68 85 73 160 81 16,000

180
14,000
19
160 13
15
21 12,000
140 16
Number of transactions

47 6 15
11 10,000
120 7 5
Volume (€m)

6 33 23
100 28 5 8,000
9 6
9 6 21
80 8
2 10 6,000
29 10 9
130 118 20
60 12 6
13
2 103 89 82 9 3 2 4,000
40 84
76
61
52 47 48 49 2,000
20

0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Food and beverages Household and personal care products Retail Restaurants Total volume (€m)

(1) Volume corresponds to transactions with publicly available information.

(2) Volume in 2015 increases because of bigger transactions than those of the historical years.
Source: EY analysis based on Capital IQ, Capital & Corporate, Mergermarket and Bloomberg.

18 | EY mergers and acquisitions in the retail and consumer products industry

The following graphs show the annual average EV/EBITDA multiple for the deals considered (i.e., those with available information,
excluding outliers) for 2005—16. Data is also shown for the aggregate sector as well as for the four analyzed subindustries.
Transactions in 2016 in Spain are subjected to special circumstances, and those limitations should be considered when comparing
by subindustries (see notes in subindustries graphs).

EV/EBITDA transactions in Spain

Total R&CP

12.0x 11.7x 11.4x 12.0x

11.1x
10.8x 10.6x 10.8x
10.4x
9.7x
10.0x 10.0x
9.3x 9.4x
8.3x
8.0x
8.0x 8.0x

6.0x 6.0x

4.0x 4.0x

2.0x 2.0x

0.0x 0.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total R&CP Historical average

Source: EY analysis based on Capital IQ, Capital & Corporate, Mergermarket and Bloomberg.

EV/EBITDA transactions in Spain

Total R&CP

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Transactions
> 500 €m 10.6x 15.5x 19.0x 10.5x na 9.4x na 13.7x 9.5x na 17.4x na

Transactions
< 500 €m 9.5x 10.1x 10.1x 9.2x 8.3x 9.4x 8.0x 10.3x 10.6x 11.7x 8.7x 10.5x

Note: in Spain, the transactions breakdown by size has been carried out assuming the €500m limit (instead of €1,000m), due to the smaller size of the market.

Source: EY analysis based on Capital IQ, Capital & Corporate, Mergermarket and Bloomberg.

EY mergers and acquisitions in the retail and consumer products industry | 19

EV/EBITDA transactions in Spain EV/EBITDA transactions in Spain
Food and beverages Retail

18.0x 17.1x

14.0x 16.0x
13.5x

12.0x 14.0x
11.3x
11.0x 12.6x 12.5x
10.5x 10.6x 10.3x 11.9x
10.0x 9.6x 9.6x
9.9x 12.0x
9.3x
9.0x
10.2x
7.9x 10.0x 9.4x 9.4x 9.4x 9.3x
8.0x 9.1x
8.0x
8.0x
6.0x 9,3x
6.0x
5.3x
4.0x
4.0x

2.0x 2.0x

0.0x 0.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Food and beverages Retail

Source: EY analysis based on Capital IQ, Capital & Corporate, Mergermarket, Sabi Source: EY analysis based on Capital IQ, Capital & Corporate, Mergermarket, Sabi
and Bloomberg. and Bloomberg.

EV/EBITDA transactions in Spain EV/EBITDA transactions in Spain

Household and personal care products Restaurants

20.0x 19.9x 12.0x 11.4x 11.4x

10.7x 10.9x

10.0x
15.0x 8.7x 8.6x 8.6x 8.6x
13.7x 13.7x 8.3x
8.0x
7.0x
11.0x 6.5x 6.4x
9.9x 9.9x
10.0x 9.5x 9.5x 9.5x 9,3x 6.0x
8.7x 8.7x

6.0x 4.0x
5.0x
2.0x

0.0x 0.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Household and personal care products Restaurants

Source: EY analysis based on Capital IQ, Capital & Corporate, Mergermarket, Sabi
and Bloomberg.
(1) In the years with no transaction multiple available, the previous year’s multiple has been used.
(2) Multiple analysis for 2014 and 2015 is limited, since there was only one transaction.
Source: EY analysis based on Capital IQ, Capital & Corporate, Mergermarket, Sabi
and Bloomberg.
(1) In the years with no transaction multiple available, the previous year’s multiple has been used.
(2) 2015 multiple is due to two transactions with higher multiple than previous years.
(3) Multiple analysis for 2016 is limited, since there was only one transaction.

20 | EY mergers and acquisitions in the retail and consumer products industry

EY mergers and acquisitions in the retail and consumer products industry | 21
Listed company valuation multiples

KhYfak`J;Hk]d][l]\dakl]\[gehYfa]kaf[j]Yk]\l`]ajnYdmYlagfkZq*(&1.af*().$gmlh]j^gjeaf_l`]A:=P+-$
o`a[`j]eYaf]\kl]Y\qoal`Yfaf[j]Yk]g^(&,*\mjaf_l`]kYe]h]jag\&

When comparing Spanish listed companies with international R&CP listed companies (measured by their
corresponding indices), we see that North American companies outperformed European and Spanish companies.

Stock market indices performance

115

110

105

100

95

90

85

80

75

70
5 6 6 16 16 6 16 16 6 16 6 6 6
c1 n1 b1 rch ril y1 ne ly g1 pt t1 v1 c1
1 De 0 Ja 9 Fe 0 Ma 9 Ap 9 Ma 8 Ju 8 Ju 7 Au 6 Se 6 Oc 5 No 5 De
3 3 2 3 2 2 2 2 2 2 2 2 2

IBEX 35 EUROSTOXX 50 S&P 500

Source: EY analysis based on Bloomberg.

22 | EY mergers and acquisitions in the retail and consumer products industry

IBEX 35 vs. selected listed R&CP companies in Spain

140

130

120

110

100

90

80

70

60
5 6 6 16 16 6 16 16 6 6 6 6 6
c1 n1 b1 rch ril y1 ne ly g1 p1 t1 v1 c1
1 De 0 Ja 9 Fe 0 Ma 9 Ap 9 Ma 8 Ju 8 Ju 7 Au 6 Se 6 Oc 5 No De
3 3 2 3 2 2 2 2 2 2 2 2 25

IBEX 35 Selected listed R&CP companies

Source: EY analysis based on Bloomberg.

International R&CP indices vs. selected listed R&CP companies in Spain

130

120

110

100

90

80

70
6
15 16 16 h1 l1
6 16 e1
6 16 6 6 6 6 6
ec an eb arc pri ay un ly g1 p1 t1 v1 c1
D J F M A M J Ju Au Se Oc No De
31 30 28 31 30 31 30 31 31 31 30 30 31

Selected listed R&CP companies in Spain STOXX North America 600 Retail
STOXX North America 600 Food & Beverage STOXX North America 600 Personal & Household Goods
STOXX Europe 600 Retail STOXX Europe 600 Food & Beverage
STOXX Europe 600 Personal & Household Goods

Source: EY analysis based on Bloomberg.

EY mergers and acquisitions in the retail and consumer products industry | 23

Listed companies historical multiples
Analyzing the period 2005—16, the 2016 LTM’s EV/EBITDA multiple in the last 12 months (LTM) for the selected
Spanish R&CP companies is higher than the historical average. The same occurs in the European and North
American markets.

EV/EBITDA LTM for listed R&CP companies in Europe

14.0x

13.0x

12.0x

11.0x

10.0x 10.6x historical average

9.0x

8.0x

7.0x

6.0x

5.0x
5 6 7 8 9 0 1 2 3 4 5 6 7
n0 n0 n0 n0 n0 n1 n1 n1 n1 n1 n1 n1 n1
Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja

EV/EBITDA LTM — Europe Historical average

Source: EY analysis based on Bloomberg and Capital IQ.

24 | EY mergers and acquisitions in the retail and consumer products industry

EV/EBITDA LTM for listed R&CP companies in North America

14.0x

13.0x

12.0x

11.0x

10.0x 10.6x historical average

9.0x

8.0x

7.0x

6.0x

5.0x
5 6 7 8 9 0 1 2 3 4 5 6 7
n0 n0 n0 n0 n0 n1 n1 n1 n1 n1 n1 n1 n1
Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja

EV/EBITDA LTM — North America Historical average

Source: EY analysis based on Bloomberg and Capital IQ.

EV/EBITDA LTM for listed R&CP companies in Spain

15.0x

14.0x

13.0x

12.0x

11.0x

10.0x 11.0x historical average

9.0x

8.0x

7.0x

6.0x

5.0x
5 6 7 8 9 0 1 2 3 4 5 6 7
n0 n0 n0 n0 n0 n1 n1 n1 n1 n1 n1 n1 n1
Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja

EV/EBITDA LTM — Spain Historical average

Source: EY analysis based on Bloomberg and Capital IQ.

EY mergers and acquisitions in the retail and consumer products industry | 25

Listed companies vs. M&A multiples
Based on a comparative analysis between listed companies and M&A multiples from 2005 to 2016, the trading
multiples paid for listed companies are higher than those paid in private acquisitions. The conclusion we drew from
this analysis is that the theoretical control premium underlying transactions is often outweighed by the illiquidity
\ak[gmfl$oal`YfYn]jY_]f]l]^^][lg^/&0$lYcaf_aflgY[[gmfll`]Yn]jY_]hj]eameafl`]YfYdqr]\eYjc]lk&

The European R&CP industry has, on average, traded in 2016 at 11.7x EV/EBITDA, very similar to the annual
average trading multiple in the Spanish market, which is 11.6x EV/EBITDA.

Annual average EV/EBITDA LTM listed companies vs. transactions in Europe

13.0x 9,9x average transactions 10.6x average listed companies

12.3x
12.0x 11.7x
11.4x 11.3x 11.2x
11.2x 11.1x
11.0x 10.7x 10.7x
9.8x 10.1x 9.7x 9.8x 9.6x 9.9x 10.0x 10.1x
10.0x
9.2x 9.2x 9.5x
9.0x 9.0x
9.0x 8.7x 8.7x
8.0x

7.0x

6.0x

5.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EV/EBITDA transactions EV/EBITDA listed companies Average transactions Average listed companies

Source: EY analysis based on Capital IQ, Mergermarket and Bloomberg.

26 | EY mergers and acquisitions in the retail and consumer products industry

Annual average EV/EBITDA LTM listed companies vs. transactions in North America

13.0x 9,6x average transactions 10,6x average listed companies 12.6x

12.4x
12.0x
12.0x
11.4x
11.0x 10.8x 10.9x
10.5x 10.1x 10.3x 10.2x 10.2x 10.2x
10.0x 9.6x 9.4x 9.3x 9.6x 9.8x 9.7x
8.9x 9.2x 8.9x
9.0x 8.6x
8.5x 8.5x
8.0x

7.0x

6.0x

5.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EV/EBITDA transactions EV/EBITDA listed companies Average transactions Average listed companies

Source: EY analysis based on Capital IQ, Mergermarket and Bloomberg.

Annual average EV/EBITDA LTM listed companies vs. transactions in Spain

10,1x average transactions 11,0x average listed companies

13.0x
12.2x 12.4x
11.9x
12.0x 11.7x 11.7x
10.8x 11.2x 10.8x 10.8x 10.8x 11.4x 11.4x 11.6x
11.1x
11.0x
10.6x 10.5x 10.4x
10.0x
10.0x
9.7x 9.3x 9.4x 9.4x
9.0x
8.3x
8.0x
8.0x

7.0x

6.0x

5.0x
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EV/EBITDA transactions EV/EBITDA average listed companies Average transactions Average listed companies

Source: EY analysis based on Capital IQ, Capital & Corporate, Mergermarket and Bloomberg.

EY mergers and acquisitions in the retail and consumer products industry | 27

Current trading multiples for R&CP companies
The selected R&CP companies in Spain traded, on average, at 11.7x EV/EBITDA and 18.1x price-to-earnings ratio (P/E) in 2016.
By subindustry, retail traded at a premium compared with food and beverages (12.9x vs. 11.3x EV/EBITDA), mainly due to the
inclusion of the high Inditex multiple (18.9x).

After its best performance in 2016, the North American industry trades, on average, at a small premium compared with the
European market (12.4x on annual average and 11.9x at the year end).

EV/ EV/ EV/ EV/ EV/ EV/ EV/ EV/ EV/ CAGR EBITDA
P/E P/E P/E
sales sales sales EBITDA EBITDA EBITDA EBIT EBIT EBIT EBITDA margin
2016 2016 2017
2016 2017 2018 2016 2017 2018 2016 2017 2018 2016—18 2016

Food and beverages 2.1x 2.0x 2.0x 11.3x 11.1x 10.5x 16.2x 14.2x 13.2x 15.8x 14.9x 14.2x +)&/ )/&+

Retail na na na 12.9x 11.2x 10.1x 17.0x 15.2x 13.7x 21.7x 19.3x 17.0x )*&, )&*

R&CP Spain 2.1x 2.0x 2.0x 11.7x 11.8x 11.0x 17.1x 15.0x 13.8x 18.1x 16.4x 15.5x 29.3% 10.3%

Food and beverages 2.0x 1.9x 2.0x 12.8x 11.3x 10.7x 16.5x 14.6x 13.6x 20.0x 17.0x 16.2x *)&( )-&)

Retail 1.9x 1.6x 1.5x 10.6x 9.5x 8.7x 13.9x 13.0x 12.1x 18.2x 15.8x 15.3x )-&+ /&+

Household and
personal care 1.8x 1.7x 1.7x 11.7x 10.0x 9.3x 14.1x 12.6x 11.5x 21.0x 17.2x 15.5x )+&- )/&0
products

Restaurants 1.4x 1.4x 1.3x 10.5x 9.3x 9.9x 14.2x 13.4x 12.5x 17.7x 16.5x 15.2x 1&* )+&)

R&CP Europe 1.8x 1.7x 1.7x 11.6x 10.1x 9.5x 14.6x 13.2x 12.3x 19.6x 16.7x 15.6x 15.5% 13.4%

Food and beverages 2.4x 2.4x 2.4x 14.0x 12.9x 12.1x 16.7x 15.1x 14.1x 22.4x 19.6x 18.5x *+&+ )/&+

Retail 1.6x 1.4x 1.3x 10.3x 9.1x 8.6x 12.5x 11.8x 11.4x 17.8x 16.3x 15.7x ))&+ 0&0

Household and
personal care 2.0x 1.8x 1.8x 12.5x 10.6x 10.4x 13.7x 12.5x 12.1x 18.2x 16.5x 15.6x ))&/ )0&)
products

Restaurants 2.0x 1.8x 1.7x 11.9x 10.6x 11.0x 15.8x 14.4x 13.7x 22.4x 18.8x 18.1x )-&0 ).&.

R&CP North
1.9x 1.8x 1.7x 11.9x 10.5x 10.1x 14.1x 12.9x 12.4x 19.3x 17.3x 16.5x 14.5% 14.0%
America

(1) Outliers have been excluded in order to avoid distortion.

Source: EY analysis based on Capital IQ as at 31 December 2016.

28 | EY mergers and acquisitions in the retail and consumer products industry

EY mergers and acquisitions in the retail and consumer products industry | 29
 Equity market sentiment in Spain

Of the 16 companies listed on the Spanish stock market, only 11 are Premium target price vs. current price
actively covered by analysts. Food and beverages ))&1
Retail *-&,
9kYl*().$g^l`gk]))[gehYfa]k$-.g^]imalqYfYdqklk
Total R&CP 18.6%
recommended to buy, while the remaining recommendations were to
k]dd )-!Yf\`gd\ *1!& Source: EY analysis based on Bloomberg as of December 2016.

Analyzing the evolution of the recommendations over the past

*,egfl`k$gfYk[Yd]^jgegf]lgÕn] Õn]Z]af_l`]`a_`]kl
recommendation, i.e., buy), we see that there has been a slight
increase in the average recommendation from 3.14 to 4.

9fYdqklkÌlYj_]lhja[]k eYjc]l[gfk]fkmk!Yj])0&.`a_`]jl`Yfl`]
closing price as at 31 December 2016 (based on the median of the
selected companies with active coverage).

=ngdmlagfg^YfYdqklkËj][gee]f\Ylagfk^gjl`]J;Haf\mkljqafKhYaf Yn]jY_]k]d][l]\[gehYfa]k! )!

4.50

Sell
4.00 15%

3.50
Buy
56%
3.00

2.50

Hold
2.00 29%

1.50
15 15 16 16
y 20 15
201
5 r 20 y 20 16
201
6 r 20
uar il 20 obe uar il 20 obe
Jan Apr July Oct Jan Apr July Oct

Analysts’ recommendations

Source: EY analysis based on Bloomberg.

(1)
9fYdqklk[Yd]^jgegf]lgÕn] Õn]Z]af_l`]`a_`]klj][gee]f\Ylagf$a&]&Zmq!&

30 | EY mergers and acquisitions in the retail and consumer products industry

 Appendices

9ZZj]naYlagfkYf\\]Õfalagfk

BME Bolsas y Mercados Españoles

b.p. Basis points
CAGR Compound annual growth rate
CIS Centro de Investigaciones Sociológicas
CCI ;gfkme]j;gfÕ\]f[]Af\]p
CPI Consumer Price Index
€ Euro
Earnings before interest, taxes, depreciation and
EBITDA
amortization
EBITDA
EBITDA / sales
margin
ECB European Central Bank
e.g. Exempli gratia (for example)
EV Enterprise value
EY Ernst & Young Servicios Corporativos S.L.
i.e. Id Est (for example)
GDP Gross domestic product
IMF International Monetary Fund
INE Instituto Nacional de Estadística
LTM Last 12 months
M&A Mergers and acquisitions
m Million
na not available
P/E Price to earnings ratio
R&CP Retail and consumer products
US United States
vs. versus

EY mergers and acquisitions in the retail and consumer products industry | 31

Selected main R&CP transactions in the European market
A selection of the main transactions that took place in 2016 in the European market:

Europe
Date Acquiror Acquiree Industry úY[imaj]\ Deal value
Ñe!

2016 InvestIndustrial Artsana, S.p.A. Household and personal .( 1,200

care products
2016 J Sainsbury, P.C.L. Home Retail Group, P.C.L. Retail )(( 1,138

2016 Steinhoff International Holdings, N.V. Darty, P.C.L. Retail 0( 1,066

2016 Sumitomo Co. Fyffes, P.C.L. Food and beverages )(( 876
2016 Steinhoff International Holdings, N.V. Poundland Group, P.C.L. Household and personal /. 563
care products
2016 Leonard Green & Partners, L.P. Signet Jewelers Ltd. Retail na 554

2016 KL-Kepong International, Ltd. M.P. Evans Group, P.C.L. Food and beverages na 535

2016 Cott Co. Eden Springs (Europe), S.A. Food and beverages )(( 470
2016 Wesfarmers, Ltd. Homebase, Ltd. Household and personal )(( 445
care products
2016 Finaccess México, S.A. de C.V. AmRest Holdings, S.E. Restaurants na 430

2016 Amplify Snack Brands Inc. Tyrrells Potato Crisps, Ltd. Food and beverages )(( 354
2016 PATRIZIA Immobilien AG Real estate portfolio with 21 specialized Food and beverages )(( 250
stores (Edeka Zentrale A.G. & Co.,
C&?&3J=O=%R]fljYd9&?&3CYmÖYf\Kla^lmf_
& Co., K.G.;Bauhaus International
Holdings, Ltd.)
Smyk Sp z oo of Empik Media & Fashion,
2016 Bridgepoint Advisers, Ltd. Retail )(( 247
S.A.
2016 D'ieteren, S.A./N.V. Moleskine, S.p.A. Retail ,) 209

2016 Caisse de dépôt et placement du Québec Elior S.C.A. Restaurants n.d. 200
2016 Ningbo Joyson Electronic Co. Automobile information branch of Retail )(( 180
TechniSat Digital GmbH
2016 Shanghai Jahwa (Group) Co., Ltd. Mayborn Group, Ltd. Retail )(( 174

2016 Ascendis Health, Ltd. Scitec International, S.a.r.l. Food and beverages )(( 170

2016 Lenta, Ltd. Food retail stores (Kesko Oyj) Food and beverages )(( 166

2016 Vivendi, S.A. Groupe Fnac, S.A. Retail )- 159

2016 JD Sports Fashion, P.C.L. GO Outdoors Topco, Ltd. Retail )(( 150
2016 Caledonia Investments, P.C.L./ Liberation Group, Ltd. Restaurants )(( 144
Management Group (fund)
2016 Famous Brands, Ltd. Gourmet Burger Kitchen Limited Restaurants )(( 143

2016 Marshall Motor Holdings, P.C.L. Ridgeway Garages Newbury, Ltd. Retail )(( 140

2016 na Grieg Seafood, A.S.A. Food and beverages )(( 122

2016 Lerøy Seafood Group, A.S.A. @YnÕkc$9&K&9& Food and beverages na 99

2016 B.S.A. International, S.A. S.C. Albalact, S.A. Food and beverages )(( 92

2016 Cherokee Inc. Hi-Tec Sports, Ltd. Retail )(( 90

Source: EY analysis based on Bloomberg, Capital IQ and Mergermarket.

32 | EY mergers and acquisitions in the retail and consumer products industry

Selected main R&CP transactions in the North American market
A selection of the main transactions that took place in 2016 in the North American market:

United States and Canada

Date Acquiror Acquiree Industry úY[imaj]\ Deal value
Ñe!

2016 Danone, S.A. The WhiteWave Foods Food and beverages )(( 11,333
Company
2016 Steinhoff International Holdings, N.V. Mattress Firm Holding Co. Household and personal )(( 3,379
care products
2016 Henkel Consumer Goods Inc. The Sun Products Co. Household and personal )(( 3,238
care products
2016 Wal-Mart Stores Inc Jet.com Inc/NJ Household and personal )(( 2,979
care products
2016 Johnson & Johnson Consumer Companies Inc. Vogue International, L.L.C. Household and personal )(( 2,958
care products
2016 McKesson Canada Co. Rexall Pharma Plus , Ltd. Household and personal )(( 2,057
care products
2016 Lowe's Cos Inc. RONA Inc. Household and personal )(( 1,864
care products
2016 Mott's, L.L.P. BAI Brands, L.L.C. Food and beverages 1/ 1,602

2016 The Estée Lauder Companies Inc. Too Faced Cosmetics, L.L.C. Household and personal )(( 1,352
care products
2016 Apollo Global Management, L.L.C. The Fresh Market Inc. Food and beverages )(( 1,252

2016 Onex Corporation Moran Foods, L.L.C. Food and beverages )(( 1,241

2016 Apollo Global Management, L.L.C. Coinstar, L.L.C. Retail )(( 1,212
2016 JAB Holding Co., S.a.r.l. Krispy Kreme Doughnuts Inc. Restaurants )(( 1,138
2016 L'Oreal, S.A. It Cosmetics, L.L.C. Household and personal )(( 1,093
care products
2016 Charoen Pokphand Foods Public Co., Ltd. Bellisio Foods Inc. Food and beverages )(( 1,008

2016 Thai Union Group, P.C.L. Red Lobster Seafood Co. Restaurants n.d. 516

2016 Empresas COPEC, S.A. MAPCO Express Inc. Food and beverages )(( 479

2016 Cara Operations, Ltd. Groupe St-Hubert Inc. Restaurants )(( 364
Action Sports division of
2016 Vista Outdoor Inc. Retail )(( 362
Easton-Bell Sports, L.L.C.
Stores operations (CST
2016 Seven & i Holdings Co, Ltd. Retail )(( 358
Brands Inc.)
2016 MTY Food Group Inc. Kahala Brands, Ltd. Restaurants )(( 268

2016 Clorox Co. Renew Life Formulas Inc. Food and beverages )(( 252
2016 Caleres Inc. Allen Edmonds Co. Retail )(( 240
2016 Hudson's Bay Co. Gilt Groupe Holdings Inc. Retail )(( 230
2016 Private investor; Harvest Partners, L.L.C. (Fund: Otg Management Inc. Restaurants )(( 223
Harvest Partners Structured Capital Fund, L.P.)
Distribution center (OH of Retail )(( 213
2016 CT Real Estate Investment Trust
Canadian Tire Co., Ltd.)

Source: EY analysis based on Bloomberg, Capital IQ and Mergermarket.

EY mergers and acquisitions in the retail and consumer products industry | 33

Selected main R&CP transactions in the Spanish market

A selection of the main transactions that took place in 2016 in the Spanish market:

Spain
Date Acquiror Acquiree Industry úY[imaj]\ Deal value
Ñe!

2016 Vente-Privee.com, S.A. Privalia Venta Directa, S.A. Retail )(( 500
36 supermarkets (Eroski
2016 Carrefour, S.A. Sociedad Cooperativa Food and beverages )(( 205
Limitada De Consumo)
2016 JUST EAT, P.L.C. Hellofood Brasil; La Nevera Food and beverages )(( 125
Roja; Pizzabo.it; Hellofood
Mexico; Hellofood Italia
2016 Investcorp Bank B.S.C. Agromillora Catalana, S.A. Food and beverages -) 125

2016 Ibersol, S.G.P.S., S.A. The Eat Out Group, S.L. Restaurants )(( 117

2016 Private investor Blancoshop, S.L. Retail )(( 83

Shanghai Kaichuang Marine International Co.,
2016 Hijos de Carlos Albo, S.L. Food and beverages )(( 69
Ltd.
2016 Nazca Capital, S.G.E.I.C., S.A. Biogran, S.L. Food and beverages )(( 67

2016 Esprinet, S.p.A. Vinzeo Technologies, S.A.U. Retail )(( 58

2016 Private investor; O'Hara Financial Services, Ltd. Play Hawkers, S.L. Retail )(( 50

2016 Carnicas Toni Josep, S.L. Piensos Costa, S.A. Food and beverages 0( 41
2016 ProA Capital de Inversiones, S.G.E.I.C., S.A. Go Fruselva, S.L.U. Food and beverages )(( 40
2016 Patron Capital, Ltd. 43 retail units in Spain (The Retail )(( 35
Blackstone Group, L.P.)
2016 Black Toro Capital, L.L.P. Marypaz of Indushoes, S.L. Retail .( 30

2016 Grupo Vips Sigla, S.A. Starbucks Coffee Espana, Restaurants ,1 28
S.L.
2016 ;gjhÕf;YhalYd$K&9& Arenal Perfumerias, S.L. Household and personal .( 21
care products
2016 Grupo Empresarial Palacios Alimentación, S.A. Elore Enterprises, L.L.C. Food and beverages )(( 19

2016 ProA Capital de Inversiones, S.G.E.I.C., S.A. Grupo Vips Franchising, S.L. Restaurants +( 13
2016 Dogi International Fabrics, S.A. Generos de Punto Treiss, S.L. Retail )(( 12

2016 General de Relojeria, S.A. Eurocrono, S.L. Retail )(( 8

2016 Dcoop S.Coop.And. Antequera facilities (Deoleo, Food and beverages )(( 8
S.A.)
2016 Industrias Cárnicas Tello, S.A. Embutidos Frial, S.A. Food and beverages )(( 7

2016 Ebro Foods, S.A. Santa Rita Harinas, S.A. Food and beverages -* 5

2016 Private investor Festa Moda, S.L. Retail 0( 3

2016 Axon Partners Group, S.L. Grupo Coco & Lola, S.L. Retail n.d. 1

Source: EY analysis based on Bloomberg, Capital IQ and Mergermarket.

34 | EY mergers and acquisitions in the retail and consumer products industry

35
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