gca: food & beverage · 2021. 1. 22. · to begin 2021, gca is launching its food &...

SECTOR COVERAGE REPORT:

Food & Beverage TechVOL 1: JANUARY 2021

2

EXECUTIVE SUMMARY

To begin 2021, GCA is launching its Food & Beverage Technology sector coverage to include each stage in the Food & Beverage value chain, from Production and Processing to Retail and Foodservice. This all-encompassing “farm-to-table” approach aims to evaluate the role, impact, and ultimately the advantages of applied technologies among 5 principal categories:

1. Application Software

2. Data & Analytics

3. Marketplaces

4. Internet-of-Things

5. Automation

Since 2017, more than $29.7b(1) has been invested into at least 980 F&B technology businesses, whereas 410+ have been acquired by ~290 buyers for an aggregate transaction value of $65.2b ($626.6m average transaction value)(2).

Common investment themes have included:

» Automation replacing relatively expensive marginal labor as technology improves and competition increases

» Actionable steps via precision control of known variables; and analysis & prediction of uncontrollable events

» Focus on sustainability; both regulators and consumers demand rigorous tracking throughout the supply chain

As GCA continues to execute M&A transactions in this market (e.g., the recent sale of Open Systems Inc. to Aptean) we invite you to contact us individually to discuss past transactions, future opportunities or general market insights.

- Glen, Kevin, Blake & Bruce

In this issue we highlight the Food Production vertical – including ~2.02m farms in the U.S. – the vast majority of which are family-owned and operated. Specific market observations include:

» Innovation continuing to drive overall productivity and output volumes; farmers have managed to produce more over the long-term with fewer and/or relatively cheaper inputs

» Although land values have risen steadily, along with debt capacity, so has contract labor wages, which represent up to 50% of production costs in certain markets (e.g., lettuce, fresh tomatoes, spinach etc.)

» Profitability is elusive; short-term price volatility caused by fluctuations in production output, combined with input price volatility and unpredictable environmental factors wreak havoc on farmers’ ability to predict and stabilize their financial prospects

» Given the negative impact of over-production on commodity prices, some farmers appear to be better off optimizing operations for profit rather than yield by controlling intermediate inputs (e.g., seed, fertilizer, pesticides etc.) more precisely

» That said, farmers are seeking to leverage technology to better measure, analyze and control each aspect of production – to the extent possible – making informed operating decisions within and between seasons

BLAKE CHRISTENSENDirectorIndustrial Technology

E: [email protected]: 212.537.4527

GLEN KRUGERManaging DirectorVertical Software


KEVIN WALSHManaging DirectorVertical Software


BRUCE CHANENCHUKAssociateVertical Software


1. Includes $1.6b growth financing of Lineage Logistics on 9/16/2020. Excludes $3.4b majority recap of IFS by EQT and TA Associates2. Only includes transactions with disclosed deal value (n=104)

3

I. GCA COVERAGE………………………………………………………………………………………………..……... 3

II. FINANCIAL MARKET UPDATE……………………………………………………………………………………………. 11

III. FOOD PRODUCTION PRIMER……………………………………………………………………………………………. 31

IV. FARM MANAGEMENT SOFTWARE SECTOR SNAPSHOT……………………………………………………………. 40

V. FOOD PROCESSING ERP SOFTWARE SECTOR SNAPSHOT………………………………………………………… 51

VI. WINERY DIRECT-TO-CONSUMER SECTOR SNAPSHOT….………………….……………………………………… 62

VII. APPENDIX…………………………………………………………………………………………………………………….. 73

4San Francisco | New York | Birmingham | Frankfurt | Fukuoka | Ho Chi Minh City | Kyoto | Lausanne | Leeds | London | Manchester | Milan | Mumbai | Munich | NagoyaNew Delhi | Osaka | Paris | Shanghai | Singapore | Stockholm | Taipei | Tel Aviv | Tokyo | Zurich

GCA is a leading global M&A advisor across numerous industry sectors with a strong focus in technology

OUR GLOBAL INVESTMENT BANKING PLATFORM

NORTH AMERICA

– Strong relationships with high-growth public and private companies

– M&A, capital markets, and private funds advisory services

– Technology-focused, including software, industrial tech, mobility, and digital media

ASIA

– Strong relationships with global Japanese conglomerates and trade buyers

– Full-scope M&A advisory services, including strategic planning, due diligence, deal execution, and PMI

– Focus on client needs in all sectors, including industrials, consumer, technology, and healthcare

EUROPE

– Strong relationships with leading corporates, private mid-market, and PE firms

– M&A and debt advisory services

– Leading software M&A advisor in Europe, also a leading advisor in the wider technology, consumer and retail, industrials, business services, and healthcare sectors

25 global officesGlobal reach in the key M&A markets across North America, Europe and Asia

500+ professionals Highly experienced investment banking professionals in all regions

500+ dealsAnnounced or closed in last 3 years

5

FEED, SEED & LIVESTOCK

1. GCA includes Wholesale Trade activities within both the Aggregation and Distribution stages of the Food & Beverage value chain

GCA’S FOOD & BEVERAGE TECHNOLOGY COVERAGE SECTORS

Production Activities:• Planting• Cultivating• Feeding• Housing• Fishing• Harvesting etc.

(See p.31: Food Production Primer)

Aggregation(1) Activities:• Collecting• Inspecting• Sorting• Grading• Storage• Marketing• Wholesale trade• Shipping etc.

Distribution(1) Activities:• Storing• Wholesale trade• Branding & Marketing• Delivery etc.

Retail & Foodservice Activities:• Marketing• Merchandising• Preparation etc.

Processing Activities:• Primary Processing (aka

Processing)• Secondary Processing

(aka Manufacturing)• Packaging etc.

Support Services Activities:• Soil Preparation• Animal Nutrition• Farm Management• Crop consultants• Transportation etc.

Value-adding Activities

Agribusiness Markets

6

REPRESENTATIVE COVERAGE AREAS

Kruger/Walsh Christensen

APPLICATION SOFTWARE DATA & ANALYTICS MARKETPLACESIOT(Software, Sensors & Controllers)

AUTOMATION(AI & Robotics Solutions)

Production

• Farm Management (see p.40)• Yield Optimization• Cultivation Management• Field Management• Dairy Production Mgmt.

• Seed Analytics• Crop Diagnostics• Field Mapping & Imagery• Irrigation• Weather• Dynamic Market Pricing

• Inputs• Labor• Insurance

• Field Monitoring• Livestock Monitoring• Connected Soil Sensors &

Rain Gauges• Weather Monitoring

• Precision & Indoor Farming• ML & Data Analysis• Job Aid Machinery• Field Sensors & Drones• Mechanical Harvesting &

Processing

Aggregation

• Cooperative ERP• Contract Settlement• Producer Payments• Silo & Feedlot ERP• Trans. & Logistics Mgmt.

• Commodity Market Data & Live Pricing

• Risk Analysis & Mgmt.• Market Performance Analysis

• Commodity Trading Platforms

• Ag Product Trading Platforms• Blockchain

• Feedstock Inventory• Facility Climate Control• Chemical Sensing

• Material Handling Solutions• Environmental Monitoring• Checkweighing Systems

Processing

• Food Proc. ERP (see p.51)• Compliance Reporting• Recipe Mgmt.• Winery & Distillery ERP

• Ingredient Data• Lot Traceability• Dynamic Supply Chain• Predictive Maintenance

• Equipment & Parts• Procure-to-Pay

• Ingredient Monitoring• Condition & Environment

Monitoring• Equipment Monitoring

• Cutting & Forming• Mixing, Blending, Filling• Sortation & Pick-and-Pack• Packaging Automation

Distribution

• Cold Chain Visibility• Inventory Mgmt.• Manufacturer Chargebacks• Trans. & Logistics Mgmt.

• Stock Level Optimization• Warehouse & Space

Utilization• Demand Forecasting

• eProcurement

• Tracking & Traceability• Environmental Monitoring /

Temperature Assurance• Analytics

• Material Handling Solutions• Order Fulfillment• Pick-and-Pack

Retail

• POS• Inventory Mgmt.• Fresh Item Mgmt.• Producer DTC (see p.62)• Grocery DTC

• Product Data• Replenishment Scheduling• Customer Behavior• Floor & Shelf Optimization

• Online Order Aggregation• Retail Surplus• Distressed Inventory

• Digital Labeling• Health & Safety / Compliance• Equipment Monitoring

• Automated Unloading• Pick-and-Pack• Shelf Scanning & Labeling

Foodservice

• Online Ordering• CRM & Loyalty• Kitchen Mgmt.• Labor Mgmt.• Ingredients Sourcing

• Menu Optimization• Customer Profiles• Service Performance• Labor Cost

• Online Order Aggregation• B2B Ingredient Marketplaces• Foodservice Excess

• Digital Labeling• Health & Safety / Compliance• Equipment Monitoring

• Autonomous Delivery• Cobot Meal Prep• Cleaning & Kitchen Prep

Waste Mitigation & Disposal

• Waste Tracking• Waste Management• Dynamic Pricing• Compliance Reporting &

Recordkeeping

• Spoilage Monitoring• Expiration Tracking

• Retail Surplus• Foodservice Excess• Distressed Inventory • Imperfect Produce• Peer-to-Peer Sharing

• Produce Tracking / On-time Delivery

• Disposal Scheduling• Route Optimization• Waste Monitoring

• Air Purification• Robotic Cleaning & Sanitizing• Recycling Equipment

Support Services

• Commodity Scheduling• Contamination & Sanitation

Inspection• Equipment Repair & Maint.

(Field Service, CMMS)

• Agronomic Data• Weather & Climate• Soil Mapping• Nutrition & Feed Formulation

• Equipment Parts• Chemicals & Fertilizers• Seed & Farm Inputs• Crop Insurance

• Equipment Monitoring• Safety Monitoring• Driver Monitoring• System Integration

• System Integration & Verification

• Equipment Monitoring• Predictive Maintenance

7

REPRESENTATIVE FOOD & BEVERAGE COVERAGE LANDSCAPE

Production

Aggregation

Processing

Distribution

Retail

Foodservice

Waste Mitigation & Disposal

Support Services

8

RECENT RELEVANT GLOBAL TRANSACTIONS

ProcessingGCA advised the target

Investment by

RetailGCA advised the target

Majority investment by

Food ServiceGCA advised the target

Series CPreferred Financing

Food ServiceGCA advised the seller

Sold to

ProcessingGCA advised the seller

Sold to


Sold a majority stake in

to

ProcessingGCA advised the buyer

Acquired

From

RetailGCA advised the seller

Sold to

Support ServicesGCA advised the seller

Sold to

ProcessingGCA advised the buyer

Acquired

Support ServicesGCA advised the buyer

Acquired

Food ServiceGCA advised the target

Series BPreferred Financing


A portfolio company of

Sold to



sold to

RetailGCA advised the buyer

Acquired

Food Equipment ServiceGCA advised the seller

Sold to

Multi-VerticalGCA advised the seller

Sold to


sold to


DistributionGCA advised the buyer

Acquired


Acquired


Sold to

Food ServiceGCA advised the seller

Sold to


Sold to

RetailGCA advised the target

Minority investment by


acquired



Sold to


Acquired


Sold to

9

GCA REPRESENTS OPEN SYSTEMS IN SALE TO APTEAN

TRANSACTION OVERVIEW• On November 17, 2020, Aptean – a global provider of mission-critical enterprise software solutions across a range

of verticals and brands – announced the acquisition of Open Systems

TRANSACTION SIGNIFICANCE• Aptean partnered with Open Systems due to its robust product suite, including ProcessPro, Traverse, and Impress,

which are each strong strategic fits that will advance Aptean’s manufacturing ERP leadership

• Open Systems’ experience and expertise aligns closely with Aptean’s target verticals including food & beverage manufacturing, discrete manufacturing, and apparel

• ProcessPro enhances Aptean’s leadership in food and beverage (9 acquisitions in the past 3 years) while allowing it to expand into other process manufacturing applications such as chemicals and cannabis

• Open Systems will leverage Aptean’s global scale to accelerate the rollout of its new “Global” platform built on the latest technology stack and delivered in cloud-based and on-prem deployments

GCA ADVISORS' ROLE• GCA was retained on the basis of its software M&A advisory expertise particularly as it relates to the ERP market

• GCA worked with founder and CEO Michael Bertini and team to prepare the Company for sale, including establishing the company’s operating model, forward projections, and concise marketing message that successfully encapsulated the Company’s 30+ year operating history

• GCA guided Open Systems through all stages of negotiation a complex diligence and documentation process spanning multiple countries and business entities

• In a competitive process that resulted in numerous bids, Aptean emerged as the preferred partner on the strength of its offer, ERP knowledge, and experience in successfully integrating prior software acquisitions

Open Systems is a market-leading provider of ERP software solutions for specific vertical markets. Its differentiated suite of products support process manufacturers, inbound and outbound installation, maintenance, repair & overhaul businesses, discrete manufacturers, among other niche verticals.

Sold to

The undersigned acted as exclusive financial advisor to Open Systems

Contact:

GLEN KRUGERManaging [email protected]

KEVIN WALSHManaging [email protected]

10

TRANSACTION OVERVIEW• On December 8, 2020, The Middleby Corporation – a global developer, manufacturer and marketer of commercial

foodservice, food processing and residential kitchen equipment – announced the acquisition of Wild Goose Filling

TRANSACTION SIGNIFICANCE• Headquartered in Louisville, CO, Wild Goose Filling is a leader in the design, manufacture and service of specialty

liquid filling systems and highly engineered food and beverage packaging equipment. Its brands are Wild Goose, Inline Filling Systems and Meheen

• Inline Filling Systems engineers complete liquid and food filling lines, including filling, capping and labeling equipment

• With this acquisition, Middleby will be able to offer a complete equipment solution to its craft beverage customers, by combining Wild Goose Filling’s products with those of its existing brands, Ss Brewtech and Deutsche Beverage

GCA ADVISORS' ROLE• GCA advised and assisted Wild Goose Filling and its private equity owner, Mangrove Equity Partners, in effectively

navigating the COVID-19 market environment and identifying an ideal buyer in Middleby

• GCA provided full strategic and execution support throughout what was a largely “virtual” process, including (i) identifying potential buyers and leading outreach, (ii) preparing marketing materials, (iii) negotiating valuation and key terms and (iv) advising on definitive agreement matters

• GCA acted as exclusive financial advisor to Wild Goose Filling in connection with the transaction

Wild Goose Filling is the domestic market leader in filling and canning technology for the fast-growing craft beverage market, which includes beer, seltzer, cold brew and kombucha. The company has developed an advanced canning process which allows customers to minimize installation, set up & training costs, and dissolved oxygen in beverages.

The undersigned acted as exclusive financial advisor to Wild Goose Filling

GCA REPRESENTS WILD GOOSE FILLING IN SALE TO MIDDLEBY

Sold to

Contact:

BLAKE [email protected]

11

I. GCA COVERAGE…………………….……………………………………………………………………………..……... 3

II. FINANCIAL MARKET UPDATE……………..…………………………………………………………………………. 11





VII. APPENDIX…………………………………………………………………………………………………………………….. 73

12

M&A: MOST ACTIVE STRATEGIC ACQUIRORS

ACQUIROR# ACQUISITIONS

(SINCE 2017)TARGETS

29

13

Portfolio Asset of: Vista Equity, TA Associates, and Charlesbank

12

11(includes Grubhub

acquisitions)

2017 20202018 2019

2017 2018 2019 2020

2017 2018 2019 2020

(2) (1)

(1)

(1)

(1)(1)

(3)

1. Acquired by Grubhub2. Swiss business of Delivery Hero3. Merger of equals resulting in the combined entity, Just Eat Takeaway.com

2017 2018 2019 2020

13

ACQUIROR# ACQUISITIONS

(SINCE 2017)TARGETS

10(includes Foodpanda

acquisitions)

9(includes ShopKeep & Upserve acquisitions)

7(includes AFS & Farm at Hand acquisitions)

6

5

4

4

M&A: MOST ACTIVE STRATEGIC ACQUIRORS (CONT.)

2017 2018 2019 2020

2017 20202018 2019

2017 2018 2019

2018 2020

2020

n/a

(7)

2017

n/a

2019

n/a

1. Acquired by Foodpanda, a subsidiary of Delivery Hero2. Acquired Glovo’s Latin American business3. Acquired by ShopKeep4. Acquired by Upserve

5. Acquired by AFS Technologies via its financial sponsor, STG Partners6. Acquired by Farm at Hand as a subsidiary of Telus7. Acquired MidStates VRS business from Butler Machinery and Frontier Precision

+

n/a

202020192017 2018

n/a

n/a(6)

(5)

2018 2019 20202017

(3)

(4)

2017 2019 20202018

(2)

(1)

14

M&A: RECENT STRATEGIC TRANSACTIONS

ANNOUNCEDATE

BUYER TARGETTXN. VALUE

($m)

LTM REV. MULTIPLE

VERTICAL TECHNOLOGY TARGET LOCATION

Jan 13, 2021

Capital Source: Providence Strategic Growth

n/a n/a Food ServiceApplication

SoftwareCape Coral, FL

Dec 31, 2020 $13.2 n/a Retail Marketplaces Kitchener, ON

Dec 8, 2020 Conf. Conf. Processing Automation Louisville, CO

Dec 1, 2020 $430.0 10.8x Food ServiceApplication

SoftwareProvidence, RI

Nov 17, 2020

Capital Source: Vista, TA, Charlesbank

Conf. Conf. ProcessingApplication

SoftwareShakopee, MN

Nov 17, 2020 n/a n/a Processing Data & Analytics Oslo, NOR

Nov 17, 2020 n/a n/a ProcessingApplication

SoftwareToronto, ON

Nov 12, 2020 n/a n/a ProductionApplication

SoftwareFargo, ND

Nov 9, 2020

Capital Source: Radian Capital

n/a n/a Retail Marketplaces Denver, CO

Nov 5, 2020 $440.0 8.8x Food ServiceApplication

SoftwareNew York, NY

Sources: Market Research, Company Press Releases1. Meal Ticket and Trackmax merged to form a combined entity with support from funds advised by Providence Strategic Growth

Indicates GCA participation in transaction

(1)

15

Sources: Market Research, Company Press Releases1. Orchestra Software and Encompass Technologies merged to form a combined entity2. Acquired Glovo’s Latin American business3. Acquired MidStates VRS business from Butler Machinery and Frontier Precision


M&A: RECENT STRATEGIC TRANSACTIONS (CONT.)

ANNOUNCEDATE


($m)

LTM REV. MULTIPLE


Nov 2, 2020 $25.0 n/a Distribution Automation Las Vegas, NV

Nov 2, 2020 $262.0 n/a Distribution Automation San Francisco, CA

Oct 16, 2020

Capital Source: Radian Capital

n/a n/a ProcessingApplication

SoftwareFort Collins, CO

Oct 5, 2020


n/a n/aAggregation;Distribution

Application Software

Hamburg, DEU

Sep 16, 2020 ~$272.0 n/a Food Service Marketplaces Barcelona, ESP

Sep 14, 2020 n/a n/a Production IOT Fargo, ND

Sep 14, 2020 $44.0 n/aFood Service;

RetailData & Analytics Culver City, CA

Sep 10, 2020 n/a n/a Production Data & Analytics Wellington, NZL

Sep 10, 2020 n/a n/a Food ServiceApplication


Aug 19, 2020 $315.0 n/aDistribution;Processing


Tampa, FL

(3)

(2)

+

(1)

16Sources: Market Research, Company Press ReleasesIndicates GCA participation in transaction

M&A: RECENT STRATEGIC TRANSACTIONS (CONT.)

ANNOUNCEDATE


($m)

LTM REV. MULTIPLE


Aug 6, 2020

Capital Source: Decathlon Capital


SoftwareRedwood City, CA

Aug 5, 2020

Capital Source: OMERS Growth Equity


SoftwareBoston, MA

Aug 1, 2020

Capital Source: Telus (NYSE: TU)

n/a n/a Support Services Data & Analytics Clovis, CA

Jul 29, 2020

Capital Source: Cantor Ventures

n/a n/a Food Service Marketplaces Brookfield, CT

Jul 28, 2020 $575.0 8.7x RetailApplication

SoftwareDedham, MA

Jul 21, 2020

Capital Source: Kleiner Perkins

n/a n/a Production Marketplaces Perth, AUS

Jul 6, 2020


n/a n/a ProcessingApplication

SoftwareLimburg, NLD

July 6, 2020 $2,650.0 n/a Food Service Marketplaces San Francisco, CA

Jun 17, 2020

Capital Source: Banneker Partners

n/a n/a Processing Data & Analytics Dublin, IRL

Jun 10, 2020

Capital Source: Cantor Ventures

n/a n/a Food Service Marketplaces Monterey, CA

17

SPONSOR# ACQUISITIONS

(SINCE 2017)TARGETS

5

5

4

4

3

3

3

Platform deals only; does not reflect add-on acquisitions financed by sponsors on behalf of portfolio companies (see pages 14 – 16)

M&A: MOST ACTIVE FINANCIAL SPONSOR ACQUIRORS

2018 2019

2017 2019 2020

2017 2018

2018 2019 2020

2017 2019 2020

2019 2020

2019 2020

18

M&A: RECENT SPONSOR PLATFORM TRANSACTIONS

ANNOUNCEDATE


($m)

LTM REV. MULTIPLE


Dec 23, 2020 n/a n/a RetailApplication

SoftwareTroy, MI

Dec 17, 2020 n/a n/a DistributionApplication

SoftwareMarietta, GA

Nov 11, 2020 $700.0 n/a RetailApplication

SoftwareCranberry

Township, PA

Nov 9, 2020 n/a n/a AggregationApplication

SoftwareWest Bridgford,

GBR

Oct 5, 2020 $125.0 6.2x(1)

DistributionApplication

SoftwareRosh Haayin, ISR

Aug 20, 2020 n/a n/a Support ServicesApplication

SoftwareWilmington, MA

Jul 14, 2020 Conf. Conf. ProcessingApplication

SoftwareKöln, DEU

Jul 14, 2020 ~$3,400.0 4.3x ProcessingApplication

SoftwareLinköping, SWE

May 6, 2020 n/a n/a Distribution IOT Oakdale, MN

Apr 23, 2020 n/a n/a Food Service Marketplaces Wilmington, NC

Sources: Market Research, Company Press Releases1. GCA Propriety Insight


19

M&A: RECENT SPONSOR PLATFORM TRANSACTIONS (CONT.)

ANNOUNCEDATE


($m)

LTM REV. MULTIPLE


Mar 4, 2020 n/a n/a Food ServiceApplication

SoftwareConcord, MA

Jan 7, 2020 Conf. Conf. ProcessingApplication

SoftwareSolna, SWE

Nov 1, 2019 n/a n/a RetailApplication

SoftwareMississauga, ON

Oct 21, 2019 $145.0 16.1x Food ServiceApplication

SoftwareMunich, DEU

Oct 15, 2019 n/a n/a Food ServiceApplication

SoftwareAdelaide, AUS

Sep 29, 2019 $83.0 Conf. Retail Marketplaces New York, NY

Sep 9, 2019 n/a n/a Food ServiceApplication

SoftwareMadrid, ESP

Aug 22, 2019 Conf. Conf. Food ServiceApplication

SoftwareWest Dundee, IL

Aug 2, 2019 $390.0 n/a DistributionApplication

SoftwarePhiladelphia, PA

Jul 10, 2019 n/a n/a RetailApplication

SoftwareChicago, IL

Sources: Market Research, Company Press Releases1. Secondary transaction to acquire the remaining equity in Infor from Golden Gate Capital


20

M&A: RECENT SPONSOR PLATFORM TRANSACTIONS (CONT.)

ANNOUNCEDATE


($m)

LTM REV. MULTIPLE


Jul 10, 2019 n/a n/a Food ServiceApplication

SoftwareAustin, TX

Jul 1, 2019 n/a n/a ProcessingApplication

SoftwareFrisco, TX

May 31, 2019 n/a n/a Food ServiceApplication

SoftwareColumbus, OH

Apr 3, 2019 $930.0 n/a DistributionApplication

SoftwareScottsdale, AZ

Mar 20, 2019 n/a n/a RetailApplication

SoftwareAlpharetta, GA

Feb 27, 2019 $950.0 n/a ProcessingApplication

SoftwareAlpharetta, GA

Jan 16, 2019 $1,500.0 n/a ProcessingApplication


Dec 3, 2018 n/a n/a Support ServicesApplication

SoftwareJacksonville, FL

Oct 17, 2018 n/a n/aDistribution;Processing


Tampa, FL

Aug 20, 2018 n/a n/a RetailApplication

SoftwareTampa, FL

Sources: Market Research, Company Press ReleasesIndicates GCA participation in transaction

21

INVESTOR# ACQUISITIONS

(SINCE 2017)TARGETS

24

14

11

8

FINANCINGS: MOST ACTIVE VENTURE & GROWTH EQUITY CAPITAL

2017 2018 2019 2020

2017 2018 2019 2020

2017 20202018 2019

2017 2018 2019 2020

22

INVESTOR# ACQUISITIONS

(SINCE 2017)TARGETS

7

7

6

6

5

FINANCINGS: MOST ACTIVE VENTURE & GROWTH EQUITY CAPITAL (CONT.)

2017 2018 2019 2020

2017 2018 2019 2020

2017 2018 2019 2020

2017 2018 2019 2020

2017 2018 2019 2020

23

FINANCINGS: RECENT VENTURE OR GROWTH EQUITY TRANSACTIONS

ANNOUNCEDATE

TARGET INVESTORSTXN. VALUE

($m)

POST-$ VALUE ($m)

(1) VERTICAL TECHNOLOGY TARGET LOCATION

Jan 8, 2021

New: Schusterman Foundation, Dick Parsons, Fine Day Ventures, Intel Capital, Lauder Foundation, Rethink Capital, Searchlight CapitalExisting: Data Collective, EchoVC, GGV Capital, TPG Growth

$85.0 n/a Production Data & Analytics New York, NY

Dec 21, 2020New: D1 Capital Partners, FidelityExisting: Baillie Gifford, Kora Management, Luxor Capital, Mirae Asset, Steadview, Tiger Global

$660.0 $3,900.0 Food Service Marketplaces Gurugram, IND

Dec 14, 2020New: Capital One VenturesExisting: n/a n/a n/a Disposal


Atlanta, GA

Nov 30, 2020New: Burda Principal Investments, Kinnevik, Piton Capital, Vostok New VenturesExisting: 83 North, Felix Capital

$70.0 n/a Food Service Marketplaces London, GBR

Nov 19, 2020New: n/aExisting: Food Retail Ventures, Innovation Endeavors, Maersk Growth, Baseline Ventures

$13.0 n/a RetailApplication

SoftwareSan Francisco, CA

Nov 9, 2020New: Baillie Gifford, Fidelity, T. Rowe PriceExisting: Greylock Partners, SoftBank Investment Advisers

$500.0 $5,000.0 Retail Automation Mountain View, CA

Oct 29, 2020New: Alumni Ventures, Agronautic Ventures, M20Existing: Ajax Strategies, Middleland Capital, Prelude Ventures, S2G Ventures

$20.0 n/a Production IOT Princeton, NJ

Oct 28, 2020New: Coatue Management Existing: 645 Ventures, Primary Venture Partners $20.0 n/a Food Service


New York, NY

Oct 27, 2020

New: D1 Capital Partners, Dragoneer Investment Group, NorwestExisting: DST Global, Forerunner Ventures, Founders Fund, Khosla Ventures, Lightspeed, Sequoia, Y Combinator

$170.0 $2,500.0 Food Service Marketplaces San Francisco, CA

Oct 27, 2020New: SoftBank GroupExisting: Act One Ventures $120.0 n/a Food Service


Los Angeles, CA

Sources: Market Research, Company Press Releases1. As reported by PitchBook


24

FINANCINGS: RECENT VENTURE OR GROWTH EQUITY TRANSACTIONS (CONT.)

ANNOUNCEDATE


($m)

POST-$ VALUE ($m)


Oct 15, 2020New: Salt Partners GroupExisting: DCM Ventures, HarbourVest Partners, Lightspeed, Menlo Ventures

$52.5 n/a Food ServiceApplication


Oct 14, 2020

New: 166 2nd Financial Services, Alumni Ventures GroupExisting: Greystar Real Estate Partners, New Enterprise Associates, Spark Capital

$42.0 n/a Retail Marketplaces New York, NY

Oct 13, 2020New: Meritech Capital PartnersExisting: n/a $30.0 n/a Food Service Marketplaces Chicago, IL

Oct 12, 2020New: n/aExisting: Flipkart, Walmart $30.0 n/a Aggregation Marketplaces Bengaluru, IND

Oct 8, 2020New: D1 Capital Partners, Luxor Capital, SoftBank Investment AdvisersExisting: Accel

$380.0 ~$3,900.0 Retail Marketplaces Philadelphia, PA

Oct 8, 2020New: n/aExisting: D1 Capital Partners, Valiant Capital Partners

$200.0 $17,700.0 Retail Marketplaces San Francisco, CA

Oct 5, 2020

New: BlackRock, Celtic House, Digital Garage, Marubeni Ventures, Mojo Partners, Reimagined Ventures, Sixty Degree CapitalExisting: CentreGold Capital, GGV Capital, Scrum Ventures, Trinity Capital, WI Harper, Y Combinator

$60.0 $450.0 Retail Marketplaces San Francisco, CA

Sep 24, 2020New: Andreessen HorowitzExisting: Haystack, Initialized Capital Management n/a n/a Aggregation Marketplaces San Francisco, CA

Sep 22, 2020New: Thomas H. Lee PartnersExisting: Mitsui & Co., Syngenta Ventures, Tencent Holdings, Yellow Brick Capital

$23.5 n/a Production IOT Rosh Haayin, ISR

Sep 22, 2020New: DST GlobalExisting: Dragoneer Investment Group, Franklin Templeton Investments

$60.0 $560.0 Food ServiceApplication




25

FINANCINGS: RECENT VENTURE OR GROWTH EQUITY TRANSACTIONS (CONT.)

ANNOUNCEDATE


($m)

POST-$ VALUE ($m)


Sep 16, 2020

New: BentallGreenOak, CenterSquare, Cohen & Steers, Morgan Stanley, OPSEU Pension Trust, Oxford Properties GroupExisting: D1 Capital Partners

$1,600.0 $15,500.0 Distribution Automation Novi, MI

Sep 8, 2020

New: Argonautic Ventures, Lewis & Clark AgriFoodExisting: AgFunder, Continental Grain Company, Fifty Years, Germin8 Ventures, Horizon Ventures, S2G Ventures

$27.0 $127.0 Support Services Data & Analytics San Francisco, CA

Sep 10, 2020New: Kora Management, Tiger GlobalExisting: Ant Group, Temasek n/a n/a Food Service Marketplaces Gurugram, IND

Aug 20, 2020New: Avenir Growth Capital, Baird Capital, Tiger GlobalExisting: Polaris Partners

$50.0 n/a Retail Marketplaces Boston, MA

Aug 18, 2020

New: Betaworks, Craft, GMG, Greycroft, Insight, Long Venture Partners, Primary Venture Partners, Revelis, Rho Ventures, Social StartsExisting: n/a

$30.0 n/a Food Service Marketplaces New York, NY

Aug 17, 2020New: DST GlobalExisting: n/a $35.0 $635.0 Food Service Marketplaces Freemont, CA

Aug 3, 2020

New: Balyasny Asset Management, Baron Capital, BlackRock, Fidelity, Lupa Systems, Mandi VenturesExisting: DBL Partners, Expanding Capital, GV, Kleiner Perkins, Temasek, T. Rowe Price

$250.0 $1,800.0 Support Services Data & Analytics San Carlos, CA

Jul 28, 2020

New: 01 Advisors, 6ixth Event, Basement Fund, Chapter One Ventures, DTA Ventures, Greenoaks Capital, Kleiner Perkins, LPC VenturesExisting: Founders Fund, Launch Fund, Ludlow Ventures, Upfront Ventures

$51.0 n/a Processing IOT San Francisco, CA

Jun 23, 2020New: CharlesbankExisting: TA Associates n/a ~$2,000 Processing


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$500.0 $2,720.0 Support Services Data & Analytics Boston, MA



26

22.1x

7.4x 7.0x 6.3x 6.2x 6.0x 5.4x 4.4x 4.3x 4.0x

28.1x

16.6x

7.7x 6.1x 5.9x 5.9x 5.8x 5.3x 4.7x

3.3x 3.8x

-15%

5%

25%

45%

65%

85%

105%

0.0x

10.0x

20.0x

30.0x

SHOP LSPD SQ PRO TSX: CSU AGYS FISV TRMB ORCL CDK FOUR QADA

EV/LTM Revenue

EV/NTM Revenue

LTM Rev Growth %

NTM Rev Growth %

APPLICATION SOFTWARE COMPARABLE PUBLIC COMPANIES

TRADING MULTIPLES SHOP LSPD SQ(1) PRO CSU AGYS FISV(2) TRMB ORCL CDK FOUR QADA MEDIAN

EV/LTM Revenue 56.3x 52.4x 22.1x 7.4x 7.0x 6.3x 6.2x 6.0x 5.4x 4.4x 4.3x 4.0x 6.3x

EV/NTM Revenue 39.1x 28.1x 16.6x 7.7x 6.1x 5.9x 5.9x 5.8x 5.3x 4.7x 3.3x 3.8x 5.9x

EV/LTM EBITDA NM NM NM NM 41.9x NM 19.2x 29.4x 12.4x 13.4x NM NM 19.2x

EV/NTM EBITDA NM NM NM NM 20.8x 38.0x 15.2x 24.8x 10.6x 12.3x 23.9x 40.0x 22.3x

OPERATING STATS

LTM Rev. Growth % 55.7% 42.2% 21.9% 3.0% 9.9% (7.5%) (4.1%) (3.7%) (0.5%) (1.3%) 3.7% (3.6%) 1.3%

NTM Rev. Growth % 43.9% 86.1% 32.7% (3.8%) 14.8% 8.2% 4.6% 3.9% 3.0% (6.2%) 30.4% 4.7% 6.5%

LTM Gross Margin % 53.0% 61.1% 60.5% 58.2% 37.5% 56.5% 47.6% 58.7% 80.3% 50.2% 23.5% 58.1% 57.3%

LTM EBITDA Margin % 2.4% (33.3%) 8.8% (20.7%) 16.6% 2.7% 32.1% 20.5% 43.8% 33.0% (1.6%) 3.8% 6.3%

FINANCIAL DATA

Mkt Cap. ($m) $143,589 $8,337 $102,701 $1,968 $26,684 $996 $72,541 $17,377 $181,882 $6,291 $3,164 $1,317 $12,857

LTM Net Debt ($m) ($5,218) ($467) ($213) ($67) $71 ($71) $20,322 $1,598 $32,309 $2,396 $111 ($111) $2

EV /

REV

ENU

E M

ULT

IPLE R

EVEN

UE G

RO

WTH

%

Source: Capital IQMarket data, including LTM and NTM Revenues, as of market close, January 15, 20211. SQ Revenue/COGS adjusted to remove impact of Bitcoin earnings2. LTM Revenue growth adjusted to include pro forma First Data revenue

CORE REVENUE MODEL

56.3x 39.1x 52.4x

Variable/Transactional Subscription

27

27.3x

22.0x

16.5x

12.5x 12.3x 11.2x 10.6x

6.9x

4.8x 4.7x

1.6x

22.0x

17.8x

15.0x

10.9x 10.8x 11.3x

9.2x

6.4x

4.4x 4.1x

1.6x

-15%

25%

65%

105%

145%

0.0x

10.0x

20.0x

30.0x

PLTR ESTC VERI AYX MDLA RAMP MSTR DOMO NEWR CLDR TLND TDC

EV/LTM Revenue

EV/NTM Revenue

LTM Rev Growth %

NTM Rev Growth %

DATA & ANALYTICS COMPARABLE PUBLIC COMPANIES

TRADING MULTIPLES PLTR ESTC VERI AYX MDLA RAMP MSTR DOMO NEWR CLDR TLND TDC MEDIAN



EV/LTM EBITDA NM NM NM NM NM NM NM NM NM NM NM 20.0x 20.0x

EV/NTM EBITDA NM NM NM NM NM NM NM NM NM 22.7x NM 7.1x 14.9x

OPERATING STATS

LTM Rev. Growth % 34.7% 49.2% 7.4% 17.5% 21.3% 16.7% (0.7%) 19.7% 12.1% 17.5% 11.4% (3.2%) 17.1%

NTM Rev. Growth % 31.7% 23.8% 23.8% 9.7% 15.3% 14.1% (0.8%) 15.1% 8.3% 7.8% 13.0% 0.6% 13.5%

LTM Gross Margin % 64.2% 72.5% 67.9% 91.2% 64.4% 64.4% 80.3% 71.6% 79.3% 76.3% 77.6% 54.7% 72.0%

LTM EBITDA Margin % (112.8%) (22.6%) (81.1%) 4.8% (23.3%) (24.2%) 12.5% (40.7%) (12.7%) (9.3%) (20.1%) 8.0% (21.3%)

FINANCIAL DATA

Mkt Cap. ($m) $44,666 $14,248 $1,230 $8,033 $5,946 $5,700 $5,357 $2,097 $4,749 $4,444 $1,268 $2,784 $5,053

LTM Net Debt ($m) ($1,602) ($318) ($54) $57 ($191) ($634) $53 $22 ($335) ($358) $18 $150 ($123)

EV /

REV

ENU

E M

ULT

IPLE R

EVEN

UE G

RO

WTH

%

Source: Capital IQMarket data, including LTM and NTM Revenues, as of market close, January 15, 2021

43.1x 32.7x

28

MARKETPLACES COMPARABLE PUBLIC COMPANIES

27.5x 27.1x 26.4x

18.4x

16.4x

12.9x

9.9x

7.8x

4.9x 3.6x 3.5x

1.8x

18.6x

25.2x

16.4x

14.4x

6.5x

9.6x 10.2x

6.2x 4.7x 4.0x 3.7x

1.6x

-15%

25%

65%

105%

145%

0.0x

10.0x

20.0x

30.0x

MELI ABNB DASH ETSY DHER FTCH BKNG UBER LYFT EBAY EXPE WTRH

EV/LTM Revenue

EV/NTM Revenue

LTM Rev Growth %

NTM Rev Growth %

TRADING MULTIPLES MELI ABNB(1) DASH ETSY DHER FTCH BKNG(1) UBER LYFT(1) EBAY EXPE(1) WTRH MEDIAN



EV/LTM EBITDA NM NM NM NM NM NM 38.4x NM NM 11.6x NM 33.7x 33.7x

EV/NTM EBITDA NM NM NM NM NM NM 39.3x NM NM 11.1x 29.1x 7.9x 20.1x

OPERATING STATS

LTM Rev. Growth % 44.6% (24.5%) 150.2% 68.4% 36.5% 48.5% (40.9%) (8.2%) (22.2%) 9.3% (41.8%) 4.6% 7.0%

NTM Rev. Growth % 47.9% 7.6% 61.5% 28.2% 154.4% 34.2% (3.3%) 25.9% 4.5% (9.7%) (4.5%) 10.1% 18.0%

LTM Gross Margin % 51.7% 73.5% 53.7% 70.6% 18.4% 46.0% n/a 35.7% 29.1% 77.5% 71.3% 40.7% 52.7%

LTM EBITDA Margin % 5.3% (15.7%) (7.4%) 23.8% (46.6%) (22.3%) 25.8% (28.8%) (54.8%) 31.3% (7.7%) 5.3% (7.5%)

FINANCIAL DATA

Mkt Cap. ($m) $92,348 $100,419 $59,449 $25,776 $32,040 $19,693 $86,793 $97,924 $15,203 $38,203 $19,902 $340 $35,121

LTM Net Debt ($m) ($1,198) ($2,213) ($1,005) ($414) ($926) ($136) $1,254 $2,787 ($1,428) $4,478 $4,911 $18 ($275)

EV /

REV

ENU

E M

ULT

IPLE R

EVEN

UE G

RO

WTH

%

Source: Capital IQMarket data, including LTM and NTM Revenues, as of market close, January 15, 20211. LTM Revenue growth is below the lower bound of scale due to macro effects from the COVID-19 pandemic

29

IOT COMPARABLE PUBLIC COMPANIES

16.5x

10.1x 9.7x 8.5x 8.4x

5.6x 4.9x 4.6x

2.3x 1.7x 1.4x 0.8x NM

22.2x

NM

19.1x

15.9x

23.1x

18.3x

10.0x

12.4x

NM

7.0x

-15%

5%

25%

45%

65%

85%

105%

0.0x

10.0x

20.0x

30.0x

CGNX ADI PTC PI MCHP NXPI ZBRA HON IBM BIT: DAL SWIR TCM

EV/NTM Revenue

EV/NTM EBITDA

NTM Rev Growth %

NTM EBITDA Margin %

TRADING MULTIPLES CGNX ADI PTC PI MCHP NXPI ZBRA HON IBM DAL SWIR TCM MEDIAN



EV/LTM EBITDA NM 26.4x NM NM 24.2x 24.1x 29.9x 20.2x 10.8x 17.3x NM 13.7x 22.2x

EV/NTM EBITDA NM 22.2x 30.8x NM 19.1x 15.9x 23.1x 18.3x 10.0x 12.4x NM 7.0x 18.3x

OPERATING STATS

LTM Rev. Growth % 4.3% (6.5%) 14.2% (6.2%) (0.8%) (5.3%) (3.4%) (9.5%) (2.7%) (11.5%) (13.2%) (6.1%) (5.7%)

NTM Rev. Growth % 14.5% 11.5% 8.4% 1.4% 8.4% 14.8% 10.2% (0.4%) (0.6%) 4.3% (24.9%) 7.7% 8.0%

LTM Gross Margin % 74.1% 65.9% 77.1% 47.2% 61.3% 49.9% 44.5% 32.2% 48.2% 45.0% 29.5% 34.4% 47.7%

NTM EBITDA Margin % 31.6% 45.4% 31.6% (12.4%) 44.0% 35.3% 21.3% 25.2% 22.8% 13.6% (0.7%) 11.5% 24.0%

FINANCIAL DATA

Mkt Cap. ($m) $14,676 $58,286 $14,480 $1,266 $38,681 $48,178 $21,818 $144,526 $114,403 $1,021 $661 $370 $18,247

LTM Net Debt ($m) ($366) $4,632 $886 ($32) $8,847 $6,037 $1,688 $7,990 $54,792 $49 ($7) ($48) $1,287

EV /

MU

LTIP

LE

OP

ERA

TING

METR

IC %

Source: Capital IQMarket data, including LTM and NTM Revenues, as of market close, January 15, 2021

30.8x

30

AUTOMATION COMPARABLE PUBLIC COMPANIES

20.2x 19.6x 18.4x 18.3x 18.0x 18.0x 17.7x 17.3x

15.2x

11.0x

7.9x

6.0x

18.3x 18.4x

15.4x

17.4x

14.2x 14.6x

16.6x

22.2x

14.5x

11.1x

8.4x

5.4x

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0.0x

10.0x

20.0x

30.0x

HON WBT ABBN JBT SIEGY FLOW MIDD FTV EMR YOKEY MIELY SNDR

EV/LTM EBITDA

EV/NTM EBITDA

LTM EBITDA Margin %

NTM EBITDA Margin %

TRADING MULTIPLES HON WBT ABB JBT SIE FLOW MIDD FTV(1) EMR YOKEY MIELY SNDR MEDIAN



EV/LTM EBITDA 20.2x 19.6x 18.4x 18.3x 18.0x 18.0x 17.7x 17.3x 15.2x 11.0x 7.9x 6.0x 17.9x

EV/NTM EBITDA 18.3x 18.4x 15.4x 17.4x 14.2x 14.6x 16.6x 22.2x 14.5x 11.1x 8.4x 5.4x 15.0x

OPERATING STATS

LTM Rev. Growth % (9.5%) (23.8%) (7.0%) (5.7%) (31.3%) (12.5%) (13.1%) (1.8%) (8.7%) (1.6%) (4.4%) (6.4%) (7.8%)

NTM Rev. Growth % (0.4%) (1.0%) 4.9% (5.0%) 4.7% 3.4% 4.4% (1.0%) 2.8% 2.9% 5.4% 5.5% 3.1%

LTM Gross Margin % 32.2% 34.9% 30.7% 31.1% 35.3% 35.8% 35.6% 51.8% 41.9% 43.9% 27.7% 18.0% 35.1%

LTM EBITDA Margin % 22.7% 14.1% 12.9% 13.6% 12.3% 10.2% 20.1% 22.6% 21.3% 13.5% 10.0% 13.2% 13.5%

FINANCIAL DATA

Mkt Cap. ($m) $144,526 $2,007 $60,713 $4,005 $115,735 $2,323 $7,450 $23,678 $49,606 $5,910 $33,895 $4,029 $15,564

LTM Net Debt ($m) $7,990 $1,367 $1,227 $554 $32,698 $105 $1,693 $4,435 $4,692 ($478) ($2,596) ($507) $1,297

EV /

EB

ITD

A M

ULT

IPLE EB

ITDA

MA

RG

IN %

Source: Capital IQMarket data, including LTM and NTM Revenues, as of market close, January 15, 20211. NTM Revenue growth adjusted to exclude the spinout of Vontier

31

I. GCA COVERAGE……………….…………………………………………………………………………………..……... 3


III. FOOD PRODUCTION PRIMER………………..………………………………………………………………………. 31




VII. APPENDIX…………………………………………………………………………………………………………………….. 73

32

Source: USDA: Three Decades of Consolidation in U.S. Agriculture (https://www.ers.usda.gov/webdocs/publications/88057/eib-189.pdf?v=239.1) 1. Total gross income; includes gross cash income, non-money income and value of inventory adjustments2. Number of U.S. farms equaled 2.02 million in 2019, down from 2.20 million in 2007; Farms and Land in Farms: 2019 Summary (February 2020)3. Released May 28, 2020, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of Agriculture (USDA)

A CHANGING FARMING LANDSCAPE

1

2

After peaking in 2013, farm sector income has declined while farm debt continues to rise. Lower commodity prices make it more difficult for some farmers to meet their loan obligations and pay for production expenses, and farmers who made substantial investments in land or machinery when commodity prices and farm incomes were high risk elevated risks of financial insolvency.

Against this backdrop, farm production (output and value) has continued to shift to larger farms. By 2015, 51 percent of the value of U.S. farm production came from farms with at least $1 million in sales, compared to 31 percent in 1991 (adjusted for price changes).

Cropland acreage has concentrated into fewer but larger farms across all crops.Consolidation in livestock appears to be episodic and inconsistent – with little change over some periods – interspersed with dramatic changes in farm/industry organization and farm size.

KEY STATISTICS (U.S.)

2020F Revenue(1):

$463b# Farms(2):

2.0mPaid labor(3):

688kAcres(2):

897mMARKET COMMENTARY

• Farm specialization: The long-term shifts toward agricultural consolidation have occurred in tandem with a shift toward greater farm specialization.

• While few farms specialize in a single crop, field crop operations increasingly grow just 2 or 3 crops, versus 4 to 6 crops previously

• Livestock production continues to shift toward farms that produce no crops, and instead rely on purchased feed

• Family business: Despite increased consolidation, most production continues to be carried out on family farms owned and operated by people related to one another by blood or marriage

• Family farms accounted for 90 percent of farms with at least $1 million in sales in 2015 and produced 83 percent of production from million-dollar farms

• Big business: Large corporate firms play a coordination role in U.S. farming using contracts, particularly in hog and poultry production

• Some firms – for example, in specialty crops, cattle feedlots, poultry, and hogs –operate multiple farms

0

1

2

3

4

5

6

7

8

1850 1870 1890 1910 1925 1935 1945 1954 1964 1974 1982 1992 2002 2012 2019

Million farms, billion acres, or 100 acres per farm

Farms (million)

Average farm size(100 acres per farm)

Land in farms (billions of acres)

Source: USDA, Economic Research Service using data from USDA, National Agricultural Statistics Service, Census of Agriculture (through 2017) and Farms and Land in Farms: 2019 Summary (February 2020)

$0

$100

$200

$300

$400

$500

$600

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20F

$ billion (2020)

Gross farm income

Production expenses

Net farm income

Note: F = forecast. Values are adjusted for inflation using the GDP chain-type price index, 2020=100; Source: USDA, Economic Research Service, Farm Income and Wealth Statistics; Data as of Dec 2020

Farms, land in farms, and average acres per farm, 1850-2019

Gross farm income, production expenses, and net farm income, inflation adjusted, 2000-2020F

33

POST-PRODUCTION

FOOD PRODUCTION ACTIVITIES

Animal Production and Aquaculture

Crop Production

Fishing

PRODUCTION OUTPUTS

Commodity Crops

Swine

Permanent Crops

Specialty Crops

Capital:• Land• Durable equipment• Service buildings• Inventories

Cleaning, Sizing, Sorting, Grading,

Hulling etc.

Drying

Inspection & Storage

Transport(Farm-to-Storage)

Packing

Chilling

Warehousing Transport(Farm-to-Market)

Poultry

Bovine (incl. Dairy)

Aquaculture Fishing & Seafood

Labor:• Hired labor• Self-employed and

unpaid family

Intermediate goods (Other):

• Machine hire & custom work• Marketing, storage &

transportation• Repair & maintenance• Miscellaneous

Intermediate goods (Farm origin):• Feed• Seed• Livestock

Intermediate goods (Manufactured):

• Electricity• Fertilizer and lime• Pesticides• Fuels & Oils

34

CAGR:

High % Low %

Source: IBISWorld1. Includes wheat, barley, sorghum, cotton, oilseed, sugarcane, hay, and other crops

FOOD PRODUCTION MARKET MAP

CATTLE PRODUCTION

$69b GCFI0.0% CAGR791k Farms$87k GCFI per Business825k EmployeesNAICS Code: 11211

CORN FARMING

$48b GCFI2.2% CAGR117k Farms$408k GCFI per Business129k EmployeesNAICS Code: 11115

Production Market Size: $365b Gross Cash Farm Income (GCFI, 2020)Size of shaded areas proportionate to % total market share in $

DAIRY FARMING

$40b GCFI1.6% CAGR90k Farms$443k GCFI per Business200k EmployeesNAICS Codes: 11212, 11241

SOYBEAN FARMING

$35b GCFI1.6% CAGR83k Farms$417k Rev. per Bus.86k EmployeesNAICS Code: 11111

FRUIT & NUT FARMING

$28b GCFI2.8% CAGR114k Farms$241k Rev. per Bus.166k EmployeesNAICS Code: 11135

VEGETABLE FARMING

$20b GCFI

1.0% CAGR41k Farms$493k GCFI per Business127k EmployeesNAICS Code: 11120

POULTRY & EGG PRODUCTION

$41b GCFI0.7% CAGR68k Farms$603k GCFI per Business119k EmployeesNAICS Codes: 11235, 11231

HOG & PIG FARMING

$24b GCFI

0.2% CAGR21k Farms$1,115k GCFI per Business55k EmployeesNAICS Code: 11221

FISH & SEAFOOD AQUACULTURE

$2b GCFI

3.1% CAGR2.7k Farms$562k Rev. per Bus.8.4k EmployeesNAICS Code: 11251

ORANGE & CITRUS GROVES

$4b GCFI

0.6% CAGR12k Farms$303k Rev per Bus.17k EmployeesNAICS Code: 11134

Wheat, Hay and Other Crops(1)

$48b GCFI1.2% CAGR558k Farms$86k GCFI per Business607k EmployeesNAICS Codes: 11117, 11192, 11112, 11193, 11199

FISHING

$9b Revenue

0.9% CAGR64k Businesses$135k Rev/Bus.65k EmployeesNAICS Code: 11411

Denotes agricultural markets where significant volume of outputs used for other industrial and commercial uses (e.g., biofuel)

35

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0Index, 1948=1

Durable equipment All labor

Feed and seed Energy

Fertilizer and lime Purchased services

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5Index, 1948=1

Total agricultural output

Total factor productivity

Total farm inputs

Source: USDA Economic Research Service, Bureau of Labor Statistics data* Indicates that the direction of input quality depends on how TFP and input are defined and measured** Indicates that “extension activity” and “infrastructure” could enhance the dissemination of knowledge to improve input quality and farmers’ operation skill

CONSISTENT PRODUCTIVITY GAINS DRIVEN BY INNOVATION & EDUCATION

Since 1948, total U.S. agricultural output more than doubled. Over the same period, the U.S. population also more than doubled. The ability of the farm sector to feed far more people today while using less farmland than six decades ago is attributed to increases in agricultural productivity.

MARKET COMMENTARY

• Changes in input use. Though total annual use of agricultural inputs changed little since 1948, the mix of inputs used shifted significantly, with increased use of intermediate inputs (e.g., fertilizer and pesticides) and decreased use of labor and land

• Over time, the prices of farm machinery, energy, chemicals, and purchased service inputs (e.g., custom machine work) all fell relative to the price of farm labor

• The drop in relative input prices encouraged farmers to substitute chemicals, purchased services, energy, and machinery use for labor

• Changes in output. The output mix for U.S. farms changed as well over the period, with crop production growing faster than livestock production.

1

3 Sources of agricultural output growth

Agricultural productivity growth accounted for the most output growth from 1948 to 2017

Source: USDA Economic Research Service, Agricultural Productivity in the U.S. data productData as of January 2020

2 Relative to labor, the use of intermediate inputs rose dramatically from 1948 to 2017

Innovation• Public R&D• Private R&D

Extension**Infrastructure**

Total agricultural output growth

Total factor productivity growth Total agricultural input growth Short-term shock

Input quality* Input quantity Random annual fluctuations:

• Weather• Pests & animal

diseases• Other unexpected

shocks• Short-term policies

Quality of other inputs Quality of land Quality of labor

• Irrigation• Conservation• Cropping

pattern

Embodied technical change

Disembodied technical change (farm practice,

organization, etc.)

• Education• Farmer health

improvement

Source: USDA Economic Research Service productivity accountsData as of January 2020

36Source: USDA, Economic research Service and USDA, National Agricultural Statistics Service, Agricultural Resource Management Survey, 2014-20181. Gross cash farm income (GCFI) is annual income before expenses and includes cash receipts, farm-related income, and Government farm program payments. 2. Number of U.S. farms equaled 2.02 million in 2019, down from 2.20 million in 2007; Farms and Land in Farms: 2019 Summary (February 2020)

LAND USE, STRUCTURE AND VALUE

1

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1945 1949 1959 1964 1969 1974 1978 1982 1987 1992 1997 2002 2007 2012

Percent of U.S. acres

Miscellaneousother land

Urban areas

Other forest-useland

Special-use areas

Grazed forest-useland

Grasslandpasture andrange

Agricultural land

Non-agricultural land

Source: USDA, Major Land Uses data product; see sources in Bigelow et al., 2017

3 Average farm real estate value in the United States, 2006-20202 Commercial farms constitute only 10% of all farms but account for approximately 80% of total agricultural production (by value)

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Dollars per acre

Farm real estate

Cropland

Pasture

The U.S. land area covers nearly 2.3 billion acres, of which roughly 52 percent (including Alaska and Hawaii) is used for agricultural purposes among 2.02 million farms.

MARKET COMMENTARY

• Land use: includes cropping, grazing (on pasture, range, and in forests), and farmsteads/farm roads• Harvested cropland declined by 2 million acres in 2018, coinciding with a rise in

crop failure• Farm structure: In 2019, 98% of U.S. farms were considered “family farms”, where

most of the business is owned and operated by a single nuclear or extended family• Land value: Farm real estate, including land and the structures on that land, typically

accounts for more than 80 percent of the total value of U.S. farm sector assets• Farmers often use the value of their real estate as collateral for farm loans• Beginning in the mid-2000s, higher farm incomes and lower interest rates

contributed to rapid land value appreciation• After the Great Recession (2008-2009), the value of U.S. cropland appreciated

faster than pastureland

Residence farms

Intermediate farms

Commercial Farms

Size Small Midsize Large Very large

Gross Cash Farm Income (GCFI)(1) Less than $350,000

Between $350,000 and

$999,999

$1 million to $4,999,999

Above $5 million

Occupation of principal operator

Retired or “off-farm” occupation

Farming Any Any Any

Number of farms 1.81m 107k 103k

Share of farms 89.6% 5.3% 5.1%

Share of production 21.5% 21.1% 57.4%

Share of land used for agricultural purposes has decreased by 11% since 1949

Cropland

Notes: The nonfarm wage includes only nonsupervisory production employees in mining and logging, manufacturing, and construction and nonsupervisory employees in the service-providing industries. These groups account for about 80 percent of total employment on private nonfarm payrolls.

37Source: USDA, Economic research Service and USDA, National Agricultural Statistics Service, Agricultural Resource Management Survey, 2014-20181. Released May 28, 2020, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of Agriculture (USDA)

LABOR COSTS, STRUCTURE AND AVAILABILITY

1 Labor costs as a % share of total gross cash farm income for selected farm specializations, 1998-2018

0%

5%

10%

15%

20%

25%

30%

35%Percent

Fruit and tree nut

Vegetable and melon

All farms

Dairy

Nursery and greenhouse

Notes: The nonfarm wage includes only nonsupervisory production employees in mining and logging, manufacturing, and construction and nonsupervisory employees in the service-providing industries. These groups account for about 80 percent of total employment on private nonfarm payrolls.

Note: Values for each year are 3-year moving averages (e.g., the estimate reported for 2018 is the average of 2016-18) to smooth fluctuations due to small sample sizes.

3 Farm wages are rising, both in real (inflation-adjusted) terms and in relation to nonfarm wages2 Smaller farms often rely on the principal operators and their spouses for

labor, while larger farms rely on hired labor

50%

51%

52%

53%

54%

55%

56%

57%

58%

59%

$9.00

$9.50

$10.00

$10.50

$11.00

$11.50

$12.00

$12.50

$13.00

$13.50

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

Dollars per hour (2018 dollars)

Average real wage for nonsupervisory farm workers(left axis)

Percent of U.S. nonfarm production andnonsupervisory average real wage (right axis)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Small Midsize Large Very large All farms

Share of total farm hours by labor source, 2014-18 average

Principal operator Spouse Other operators Other unpaid labor Hired labor Contract labor

Notes: The principal operator is the person primarily responsible for decision-making on the farm. Other unpaid labor typically includes other family members working on the farm. Small farms have annual gross cash farm income (GCFI) under $350,000. Midsize farms have GCFI between $350,000 and $999,999. Large farms have GCFI of $1 million to $4,999,999. Very large farms have GCFI of $5 million+.

The U.S. farm labor market shows many signs of tightening, including producer reports of labor shortages, increases in farm wages, more employment of guest workers through the H-2A Temporary Agricultural Program, and a shrinking supply of farm labor from rural Mexico—the source of most foreign-born farmworkers in the United States.

MARKET COMMENTARY

• The cost of labor as a % of farm income varies by sector, with some sectors being highly capital intensive (e.g., corn), while others remain labor-intensive (e.g., fruit and tree nuts) and vulnerable to rising labor expenses.

• The U.S. agricultural workforce consists of a mixture of two groups of workers: • ~2 million self-employed farm operators and their family members, referred to as

“unpaid labor” as their remuneration comes out of farm profits rather than a wage

• 688,000 paid laborers(1) such as hired and contract workers that receive wages• In responding to long-term labor market challenges, U.S. agricultural employers are

likely to continue selecting crops and improving technologies that reduce labor requirements, increase productivity and encourage employee retention

38Source: USDA, Economic Research Service and National Agricultural Statistics Service, Agricultural Resource Management Survey and U.S. Department of Commerce, Bureau of Census; Data as of December 2, 2020

FARMERS ARE BETTER OFF OPTIMIZING FOR PROFIT OVER YIELD

Most often, farmers are incentivized to maximize output (i.e., optimize for yield) in order to maximize their return on costly inputs. In commodities markets especially, the effect is to drive farm gate prices down thus negatively impacting net cash farm income (profit), a potentially devastating consequence among the roughly 1.8 million small-scale farms which have virtually no market pricing power.

MARKET COMMENTARY

• PPI volatility: Compared to consumer prices for finished food products, producer prices are highly volatile from one season to the next

• Unpredictable on-farm income: determined by farm costs and cash receipts, net on-farm income varies from year to year, with a significant number of farm households reporting negative farm income in any given year.• In the period 2013 to 2016, net farm income dropped 52%

• Reliance on off-farm income: Small family farms make up 89.6% of all farms in the U.S. but receive practically all their annual income from “off-farm” sources, including Government payments, wage income, nonfarm business earnings, dividends, and transfers.

-20

-15

-10

-5

0

5

10

15

20

25

30

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Percent Change

PPI for farm products

PPI for processed foodstuff and feedstuff

CPI for all food

Note: PPI = Producer Price Index; CPI = Consumer Price IndexSource: USDA, Economic Research Service using Bureau of Labor Statistics data

Note: F = forecast. Values are adjusted for inflation using the Gross Domestic Product chain-type price index, 2020=100. Source: USDA, Economic Research Service, Farm Income and Wealth Statistics. Data as of December 2, 2020.

$119.6

$134.1

0

20

40

60

80

100

120

140

160

180$ billion (2020)

Net farm income Net cash farm income

2000-19 average NCFI 2000-19 average NFI

2 Net farm income fluctuates tremendously (Net farm income and net cash farm income, 2000-2020F)

1 Prices paid to producers are far more volatile than retail prices paid by consumers(Annual percent change in selected price indices, 1987-2019)

3 Most farmers receive off-farm income, but small-scale operators depend on it (Median household income of principal farm operators by and sales class, 2019)

Note: Sales class reflects annual gross cash farm income before expenses (the sum of the farm’s crop and livestock sales, Government payments, and other cash farm-related income).Off-farm sources includes Government payments, wage income, nonfarm business earnings, dividends, and transfers

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Less than $10,000 $10,000 to $349,999 $350,000 to $999,999 $1,000,000 or more

Median income (dollars per household)

Income from farming

Income from off-farm sources

Total household income

All-farm median household income ($83,111)

U.S. median household income ($68,703)

Small Midsize Large-scale

Practically all small farm annual income comes from “off-farm” sources

39

TECHNOLOGY EVALUATION FRAMEWORK

FixedVariable

Measure

Analyze Analyze

Gen

erat

e

Gen

erat

e

ControllableUncontrollable

MARKETS

ProductionOutputs

ProductionInputs

Outputs

Inputs

Co

ntr

ol

Inst

ruct

AP

PLI

CA

TIO

N S

OFT

WA

RE

• Farm Management• Financial, Accounting &

Payroll• Pre-harvesting• Operations Planning &

Execution• Inventory & Logistics

• Yield Optimization• Cultivation Management• Field Management• Dairy Production

Management

DA

TA &

A

NA

LYTI

CS

• Seed Analytics• Crop Diagnostics• Field Mapping & Imagery• Irrigation• Weather• Dynamic Market Pricing

MA

RKE

TPLA

CES

• Inputs• Labor• Insurance

IOT

(So

ftw

are,

Sen

sors

&

Co

ntr

olle

rs) • Field Monitoring

• Livestock Monitoring• Connected Soil Sensors &

Rain Gauges• Weather Monitoring

AU

TOM

ATI

ON

(A

I, IO

T &

Ro

bo

tics

So

luti

on

s)

• Precision & Indoor Farming• ML & Data Analysis• Job Aid Machinery• Field Sensors & Drones• Mechanical Harvesting &

Processing

40

I. GCA COVERAGE……………….…………………………………………………………………………………..……... 3


III. FOOD PRODUCTION PRIMER………………..…………………………………….……………………………………. 31

IV. FARM MANAGEMENT SOFTWARE SECTOR SNAPSHOT…………………………………………………..……. 40



VII. APPENDIX…………………………………………………………………………………………………………………….. 73

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FARM MANAGEMENT SOFTWARE OVERVIEW

RECENT M&A TRANSACTIONS

Date Acquiror Target EV ($m) EV/LTM Rev.

Nov 2020 n/a n/a

May 2020 n/a n/a

Apr 2020 n/a n/a

LEADING SOFTWARE VENDORS

Company HQ / Founded CEO Total Cap. ($m) Post-$ Val. ($m)

Sydney, AUS

2013Kevin Baum $13.1 n/a

Perth, AUS

2007Doug Fitch $11.6 n/a

Minneapolis, MN

2009Sherman Black $54.1

$119.0(2018)

Frisco, TX

2000Scott Sexton

Acq. by Banneker Partners

n/a

Winnipeg, MB

2005Wade Barnes $78.2 n/a

Ann Arbor, MI

2011Jesse Vollmar $37.0

$106.0(2017)

San Francisco, CA

2014Sid Gorham Acq. by Dupont(3) ~$300.0

Beauvais, FRA

1983

Jean-Marie Savalle

n/a n/a

Sunnyvale, CA

1978Robert Painter $17,480 n/a

MARKET OBSERVATIONS

• The total number of farms has been slowly declining relatively steadily since the 1970s (~2.3M farms) while the average farm size has increased marginally from 440 to 444 acres

• Innovations in animal and crop genetics, chemicals, equipment, and farm organization have enabled increasing output growth without adding much to inputs, resulting in total farm output tripling from 1948 to 2017 while land and labor used in farming declined

• Farmers must plan and operate on a seasonal basis while experiencing significant variability that remains out of their control, including but not limited to, input markets, output markets, weather, pests, and disease

TOTAL ADDRESSABLE MARKET

# Farms:

2.0min U.S.(1)

Gross Cash Farm Income (GCFI):

$356bin U.S.(2)

KEY SOFTWARE EVALUATION CRITERIA

• Target Market(s): Crop, livestock, and mixed farms. Crops can be commodity (or “row”), permanent (or “perennial”), or specialty. Livestock farms primarily include beef & dairy, poultry, hog, as well as more niche animals

• Revenue Models: Typically sold as annual subscriptions tiered based on software modules / functionality, farm acreage, or both

• Customer churn: Uncontrollable churn can occur as farms are consolidated. While the total number of farms is declining, those that go out of business are more often small and not utilizing management software.

• Market Tiers: Small farms (GCFI <$350k), midsize farms (GCFI $350k - $1m), large-scale farms (GCFI $1m-$5m), and very large farms (GCFI $5m+). Large- and very large-scale farms account for ~5% of the total farms but 57% of production value

RECENT FINANCING TRANSACTIONS

Date Target Investors Amount ($m) Post-$ Val. ($m)

Nov 2020 $4.7 n/a

Aug 2020(4) $11.8 n/a

Apr 2020 n/a n/a

Source: USDA, IBISWorld1. Number of U.S. farms equaled 2.02 million in 2019, down from 2.20 million in 2007; Farms and Land in Farms: 2019 Summary (February 2020)2. IBISWorld: See page 34 for more detail.3. Subsequently spun out of Dupont as part of Corteva (NYSE: CTVA) in 20194. Plans for $11.8 Series A to be completed in spring 2021

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1. A nationwide network of borrower-owned lending institutions and specialized service organizations. The Farm Credit System provides loans, leases, and related services to farmers, ranchers, rural homeowners, aquatic producers, timber harvesters, agribusinesses, and agricultural and rural utility cooperatives.

AGRICULTURAL PRODUCTION MARKET STRUCTURE

VA

RIA

BLE

INP

UTS

NAICS:3253 Pesticide, Fertilizer & Other Agricultural Chemical Mfg.311119 Other Animal Food Manufacturing4245 Farm Product Raw Material Merchant Wholesalers4247 Petroleum Merchant Wholesalers

42491 Farm Supplies Merchant Wholesalers45431 Fuel Dealers81131 Machinery Maint. & Heavy Equip. Repair

NAICS:522298 All Other Nondepository Credit Intermediation

FINA

NC

IAL IN

STITUTIO

NS

OW

NER

S /

OP

ERA

TOR

S

NAICS:See page 34 for detail on NAICS codes

NAICS:4245 Farm Product Raw Material Merchant Wholesalers49313 Farm Product Warehousing and Storage5231, 5232 Securities & Commodities Brokerage & Exchanges

AG

GR

EGA

TION

FIX

ED IN

PU

TS

NAICS:33311 Farm Machinery and Equipment Manufacturing

REG

ULA

TOR

Y & O

THER

Environmental Regulation

Food Safety Regulation

FarmingRegulation

Commodities Trading, Consortiums, Feedlots, Import & ExportCommodity~$130.2b GCFI~757.7k Farms

Specialty~$20.1b GCFI~40.8k Farms

Permanent~$31.0b GCFI~125.5k Farms

Bovine~$108.9b GCFI~881.0k Farms

Swine~$23.6b GCFI~21.2k Farms

Poultry~$41.0b GCFI~67.9k Farms

Aquaculture~$1.5b GCFI~2.7k Farms

Notable Regulations

Clean Air Act

Clean Water Act

Notable Regulations

Animal Welfare Act

Notable Regulations

Hazard Analysis Critical Control Point

Other:(Machine hire & custom work,

marketing, storage & transportation, repair & maintenance, misc.)

Farm origin(Feed, seed, livestock)

Manufactured(Electricity, fertilizer and lime,

pesticides, fuels & oils)

Capital:• Land• Durable equipment• Service buildings• Inventories

Farm Credit System (FCS)(1) Independent Lenders

May offer additional financial services (e.g., crop insurance,

commodity price hedging)

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AGRICULTURAL PRODUCT LIFECYCLE

Planning Operations Finance & Monetization

Key Stakeholders:

“Product” Selection

Land PreparationSeeding / Feeding

Growth & Maintenance

Breeding Harvesting Financing Marketing

Variable Input Suppliers• Feed / seed• Fertilizer• Pesticides

• Marketing• Extension &

advisory services

• Purchase farm products

Farm Owners & Operators

• Comparative pricing & market demand

• Tilling• Spraying• Plowing &

harrowing

• Planting• Nutrition

planning• Feed schedule• Feed composition

• Spraying• Irrigation• Pruning• Pest control• Equipment &

infrastructure repair

• Pure-line breeding

• Cross-breeding• Vaccination

• Reaping• Picking• Hatchery

management• Milking• Livestock

weighing• Slaughtering

• Loans (land, operating, equipment)

• Crop insurance• Price hedging

(commodities futures)

• Sale of products

Financial Institutions• Banks• Insurance• Exchanges• Governments

• Farm subsidies • Loans (land, operating, equipment)

• Crop insurance• Price hedging

(commodities futures)

Fixed Input Providers• Durable Equipment• Service Buildings• Inventory

• Equipment / infrastructure sales

• Equipment repair

Regulatory Orgs• USDA• FDA• EPA

• Seed inspection • Land application pollutants

• Pollutant discharge

• Clean air• Chemical

handling• Pesticide tracking

• Harvesting & packaging standards

• Contamination tracking

• Food handling

• Transportation (temp., cleanliness)

• Contaminants

Others• Aggregators• Co-Ops

• Seed sales• Feed sales

• Loans (land, operating, equipment)

• Purchase products from farmers

• Sell products to processors and retailers

• Export products

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FARM MANAGEMENT SOFTWARE SOLUTIONS

SYSTEM OF RECORD» Access historical and real-time data from any device» Single “source of truth” simplifies recordkeeping, reducing errors and redundant tasks» Capture knowledge for succession planning

FORECASTING & PLANNING» Create detailed operational plans ranging

from entire farm to specific fields or production streams

» Plan season schedule in advance based on different yield and price scenarios

» Make in-season adjustments based on changing farm, environment, and market conditions

HARVEST & REPORTING» Coordinate sequencing of harvest crews

and equipment to reduce costs and maximize yield

» Monitor and track products in real-time, minimizing losses from mis-assigned loads or theft

FINANCE & ACCOUNTING» Integrate bookkeeping with operational data to track

P&L and cash flow in real time» Track profitability at the farm, product, and field level» Complete financial statements with shareable reporting

packages for lenders, insurance companies, and taxes (e.g., Schedule F)

ANIMAL, CROP & FIELD DATA» Map fields, enclosures and water-ways with

automated area calculations» Project crop yields, income amounts and

seed orders» Track and record field data such as planting,

spraying and fertilizing» Integrate with tracking equipment and

sensors for automated data capture» Detect crop health deficiencies» Pasture and grazing management» Animal weight goals and tracking

INVENTORY MANAGEMENT» Record of inputs on hand» Purchasing plan based on forecasted

requirements» Track projected and actual usage of inputs» Real-time stock levels including batch

numbers and expiration dates

PRODUCTION & WORK ORDERS» Schedule all farm activities and required assets including

labor, equipment, irrigation» Crew and equipment utilization» Support planned and unplanned operations activities» Track costs in real-time as work is completed

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FARM MANAGEMENT SOFTWARE LANDSCAPE

SOFTWARE SOLUTIONS

Operational Management Financial Management

Key Vendors:Inventory

ManagementCrop & Field Data Capture

Field MappingWork Order Scheduling

Market PricingBudgeting &

PlanningFinance &

AccountingFinancing / Tax

Reporting

● ● ● ● ● Audit Report

● ● ● ● ●

● ● ● ● ●QuickBooks,

NetSuite integrations

Partner: Rabo AgriFinance

● ● ● ●

● ● ●

● ● ● ● ●

● ● ● ● ● ●

● ● ● ● ● ● ● ●

● ● ● ●

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FARM MANAGEMENT SOFTWARE LANDSCAPE (CONT.)

SOFTWARE BUYERS

Crop Livestock

Key Vendors:Commodity Crops Specialty Crops

Permanent Crops

DairyCattle (beef)

Sheep Swine Poultry

● ●

● ●

● ●

●

● ●

●

● ● ●

● ● ● ● ● ● ● ●

● ● ●

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2H’17 1H’18 2H’18 1H’19 2H’19 1H’20 2H’20

1. Secondary transaction to acquire the remaining equity in AgSense after initial acquisition in 2014

FARM MANAGEMENT SOFTWARE M&A & FINANCING TIMELINE

May-20: Dairy.com acq.

MyDairyDashboard

May-19: Artemis raises $8M Series A led by

Astanor Ventures & Talis

Capital

Jan-20(1): Valmont

Industries acq. AgSense

Nov-20: John Deere acq.

Harvest Profit

Nov-20: Agrivi raises

$4.7M Series A led by South Central Ventures

Apr-20: AB Agri acq.

FarmWizard

Aug-19: Telus acq. Farm

at Hand

Apr-20: AgriWebb raises

VC funding from Wheatsheaf Group

Oct-20: Provision

Analytics acq. Crop Boss

Aug-20: eAgronom raises

$1.4M Series A led by Iron Wolf & Superangel

Jul-19: Banneker Partners

acq. Dairy.com

Aug-18: AgriWebb raises

$10.3M Series A from Wheatsheaf Group

Jan-18: Freight Farms

acq. Cabbige

Nov-19: Farmobile raises

$15.0M VC funding led by AGI

Dec-19: Telus acq.

Decisive Farming

Feb-20: Israel Chemicals

acq. Growers

Apr-20: Telus acq. Muddy

Boots Software

Aug-17: DuPont acq.

Granular Software

Oct-17: Farmobile raises

$18.1M Series B led by Anterra Capital

Mar-18: Syngenta acq.

Strider

Jun-18: Conservis raises

$13.0M Series B from undisclosed investors

Jul-18: Yara International

acq. Trecker.com

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SELECTED FARM MANAGEMENT SOFTWARE VENDOR PROFILES

COMPANY DESCRIPTION FINANCIAL SUMMARY INVESTORS / PARENT

AgriWebbwww.agriwebb.com

HQ: Sydney, AUSFounded: 2007CEO: Kevin Baum

• AgriWebb provides cloud-based farm management software for the global cattle and sheep livestock markets that delivers profitability, provenance and sustainability across the supply chain

• The company's software assists to collect all the necessary data in real-time, even offline and assemble it with full transparency. It also offers paddock treatment and crop recording services, enabling farmers to track, keep, analyze and update farm inventories, pasture, and livestock data via a cloud-based record-keeping notebook.

• Product features include farm management app, task management, individual weight insights, farm inventory management, grazing management, farm mapping, weight goals, pasture management, reports, and audit & compliance

• Total funding: $13.1m • Convertible note by Wheatsheaf Group (Apr 2020)

• $10.3m Series A by Wheatsheaf Group (Aug 2018)

Agworldwww.agworld.com

HQ: Perth, AUSFounded: 2007CEO: Doug Fitch

• Agworld develops and delivers a farm information management platform designed for growers, agronomists, retailers, application contractors, soil samplers and agriculture service providers

• Grower solution suite is catered towards row and permanent crops, providing features such as pre-season planning, in-season execution and long-term performance

• Service providers are offered additional tools for managing grower engagement and precision agronomy

• Select customers:

• Total funding: $11.6m • $5.6m Series C by REV Venture Partners and Yuuwa Capital (Aug 2014)

• $4.5m Series B by Yuuwa Capital (Oct 2012)

Conserviswww.conservis.com

HQ: Minneapolis, MNFounded: 2009CEO: Sherman Black

• Conservis develops a cloud-based farm management software system that provides data tools and customer support for family and institutional farms.

• The solution turns business data into actionable insights for agricultural enterprises to make management decisions, manage and lead operations planning to harvest, share information with stakeholders, and improve sustainable practices.

• Its software tools provide guidance and insights for row crop and permanent crop growers to manage operations from planning and budgeting, purchasing and inventory, production and work orders, and harvest and distribution.

• Total funding: $54.1 • $9.0m convertible note (Sep 2020)

• $10.9m convertible note (Feb 2020)

• $4.0m Series C (Sep 2018)

• 13.0m Series B (Jun 2018)

Dairy.comwww.dairy.com

HQ: Frisco, TXFounded: 2000CEO: Scott Sexton

• Dairy.com provides dairy management solutions and market intelligence to dairy producers for streamlining their supply chains and back-office operations.

• The Company’s platform is used by nearly 80% of Dairy Foods’ Top 100 companies to enhance bottom-line results while navigating an environment of constantly changing market prices.

• Technology and services include producer payroll, milk scheduling, mobile manifest, manufacturing, quality management, commodity scheduling & transportation, and intelligence & consulting

• The Company has made several acquisitions including Data Specialists, My Dairy Dashboard, and Orbis MES

• Total funding: n/a • Acq. by Banneker Partners (Jul 2019)

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1. Kleiner Perkins sold stake to Fairfax Financial holdings in December 2016.

SELECTED FARM MANAGEMENT SOFTWARE VENDOR PROFILES (CONT.)


Farmers Edgewww.farmersedge.ca

HQ: Winnipeg, MBFounded: 2005CEO: Wade Barnes

• Farmers Edge provides digital farming solutions that empower agricultural professionals and growers to make more informed decisions, manage risks and maximize profitability

• FarmCommand solution is a comprehensive platform that allows farmers to manage all fields and capital assets for enhanced visibility into operations

• User interface connects farms with advanced digital tools including on-farm weather intelligence, satellite imagery, scouting, machinery insights, in-cab remote access, fleet management, crop planner, benchmarking and predictive modeling

• Additional smart device integration through Farmers Edge Moisture Manager and N-Manager for real-time, accurate insight into moisture and nitrogen levels

• Total funding: $78.2m • $18.3m VC funding by Sustainable Development Technology Canada (Sep 2016)

• $58.0m VC funding led by Kleiner Perkins and Mitsui (Jan 2016)

(1)

FarmLogswww.farmlogs.com

HQ: Ann Arbor, MIFounded: 2011CEO: Jesse Vollmar

• FarmLogs offers farmers an affordable and easy-to-use farm management platform• The platform cuts across multiple facets of farming operations from financial planning and

budgeting to agronomic and marketing decisions• The product is sold in 3 tiers: Lite, Essentials, and Business and has additional add-ons for work

orders, satellite imagery, marketing reports, rain, and heat history• With over 50,000 farms on the platform, FarmLogs has mad significant strides in improving bushel

margins through the extensive use of data and analysis

• Total funding: $37.0 • $22.0m Series C led by Prosus Ventures (Jan 2017)

• $10.0m Series B by Drive Capital, Huron River Ventures, Hyde Park Venture Partners and SV Angel (Dec 2014)

Granularwww.granular.ag

HQ: San Francisco, CAFounded: 2014CEO: Sid Gorham

• Granular provides farm management software that covers all facets of the agriculture businesses• Granular Agronomy solution offers smart device connectivity to monitor nitrogen levels and

maximize soil productivity• Granular Insights tool combines planting and yield data with estimated revenue costs to analyze

each acre of land independently and to enhance agronomic decision making• Over 400 employees and offices in both North and South America• Wide range of customer testimonials encompassing corn, wheat and soybean production in the

United States

• ~$300m EV (Aug 2017) • Wholly-owned subsidiary of Corteva Agriscience (spun out of Dupont in 2019)

• Acquired by Dupont (Aug 2017)

• $21.1m Series B led by Tao Capital Partners (Sep 2015)

ISAGRIwww.isagri.fr

HQ: Beauvais, FRAFounded: 1983CEO: Jean-Marie Savalle

• ISAGRI, along with its subsidiaries, develops farm management software solutions for agriculture and wine industries.

• It offers field, livestock, swine, and vineyard software solutions; for arable farms, specialized crops, beef and dairy cattle, pig production.

• The company also provides training and support contract services. • It offers its products through a network of distributors and partners around the world.

• Total funding: n/a • n/a

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SELECTED FARM MANAGEMENT SOFTWARE VENDOR PROFILES (CONT.)


Trimblewww.trimble.com

HQ: Sunnyvale, CAFounded: 1978CEO: Robert Painter

• Trimble develops technology solutions that enable agriculture, construction, geospatial, and transportation professionals to digitally transform their work processes

• Trimble Agriculture boats multiple applications to easily manage precision agriculture data such as the Farmer Core platform and the FAST smart assistant

• Relevant solutions include land preparation, guidance & steering, correction services, planting & seeding, flow & application control, water management, and harvest management

• With ~11,500 employees, Trimble products and solutions are used in over 150 countries around the world

LTM as of 10/2/20:• Revenue: $3,142.0 • Gross margin: 55.6%• EBITDA: $645.6• EBITDA margin: 20.5%

• NASDAQ: TRMB

51

I. GCA COVERAGE……………….…………………………………………………………………………………..……... 3




V. FOOD PROCESSING ERP SOFTWARE SECTOR SNAPSHOT……………………………………………………… 51


VII. APPENDIX…………………………………………………………………………………………………………………….. 73

52

Pro

cess

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Ap

plic

atio

n S

oft

war

eA

ll M

arke

ts

FOOD PROCESSING ERP SOFTWARE OVERVIEW



Nov 2020 Conf. Conf.

Oct 2020 n/a n/a

Jul 2020 Conf. Conf.



Alpharetta, GA

2012TVN Reddy

Acq. by Vista Equity, TA Associates,

Charlesbank~$2,000.0

Irvine, CA

1983Sahib Dudani n/a n/a

Frisco, TX

2000Scott Sexton

Acq. by Banneker Partners

n/a

Florham Park, NJ

1981Tom Jackson $15.0 n/a

Chesterbrook, PA

1995Jay Deakins n/a n/a

Paso Robles, CA

1989Cheri Williams

Acq. by Dassault Systems

$425.0

Linköping, SWE

1983Darren Roos

Acq. by EQT, TA Associates

$3,380.0

New York, NY

2002

Kevin Samuelson

Acq. by Koch Equity ~$11,000.0

Portland, OR

2008

Brad Windecker

$14.0 n/a



Aug 2020 n/a ~$2,000.0

Jan 2020 $3.9 n/a

Oct 2019 $8.0 n/a

MARKET OBSERVATIONS

• Process manufacturing has unique regulatory and workflow requirements that require a more tailored solution than typical manufacturing and distribution ERP products

• Consumer behaviors have increased desire for sustainability throughout the food supply chain creating a greater need for food traceability and quality tracking data

• The pandemic has helped businesses identify choke points and accelerated appetites to adopt new technologies – though education on benefits of new products may be required

• Cloud deployment continues to gain share, though larger manufacturers remain hesitant


# Manufacturers:

82,781in U.S.(1)

Total Sales:

$872bin U.S.(1)


• Target Market(s): Food & beverage processors spanning bakeries, dairy, meat & poultry, through processed and packaged foods. Solutions are often similar or adaptable for other process manufacturing industries (e.g., chemicals, pharmaceuticals, cosmetics, cannabis)

• Revenue Models: Typical perpetual license + maintenance or subscription• Customer churn: Very low due to mission-critical nature. Churn decreases at upper end of

market due to higher burdens of data migration and training in a “rip-and-replace” scenario• Market Tiers: Customer size (rev / employees): Micro (<$10m / <10), Small ($10-25m / 10-

50), Med ($25-100m / 50-250), Large ($100-500m / 250-500), Enterprise (>$500m / >500)• Product Features: Generic manufacturing ERP functions (accounting, inventory

management, MRP, purchasing, forecasting) plus industry-specific features: lot traceability, quality management, formulation & recipe management, attribute management (e.g., allergens, expiration, yield, variable weight)

(3)

1. IBISWorld: NAICS codes falling under 311 Food Manufacturing and 3121 Beverage Manufacturing2. Orchestra Software and Encompass Technologies merged to form a combined entity. 3. DELMIAworks is the rebranding of IQMS Manufacturing Software.


(2)

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1. U.S. Bureau of Alcohol, Tobacco, and Firearms

FOOD PROCESSING ERP MARKET STRUCTURE

VA

RIA

BLE

INP

UTS

NAICS:111 Crop Production; 112 Animal Production & Aquaculture221 Utilities

311 Food Manufacturing4245 Farm Product Raw Material Merchant WholesalersContainer/Packaging (3222, 3261, 33243, 32721)

NAICS:522 Credit Intermediation524126 Direct P&C Insurers5242 Agencies, Brokerages, and Other Insurance Activities

FINA

NC

IAL IN

STITUTIO

NS

MA

NU

FAC

TUR

ERS

NAICS:311 Food Manufacturing 3121 Beverage Manufacturing

NAICS:4244 Grocery and Related Product Merchant Wholesalers4248 Beer, Wine, and Distilled Alcoholic Beverage Merchant Wholesalers

DISTR

IBU

TION

FIX

ED IN

PU

TS

NAICS:333241 Food Product Machinery Manufacturing3334 Ventilation, Heating, Air-Conditioning, and Commercial Refrigeration Equipment Manufacturing33392 Material Handling Equipment Manufacturing42383 Industrial Machinery and Equipment Merchant Wholesalers

REG

ULA

TOR

Y & O

THER

• 1.2% CAGR• 68.9K Businesses• $6.7m Rev. per Bus.• 10.2% Labor % of Sales

~$408.4b Revenue ~$463.2b Revenue

Alcohol RegulationMeat, Poultry & Eggs Processing

Electricity Water Ingredients Materials

“All Other Foods”Processing

Secondary Processing

• 0.8% CAGR• 13.9K Businesses• $29.3m Rev. per Bus.• 8.8% Labor % of Sales

Primary Processing

Equipment Loans, Insurance & Output Exchanges

Food Supply & Logistics

Capital:• Land• Facilities• Machinery• Equipment Notable Regulations:

• FSIS (food safety & inspection)

• FMIA (meat inspection)• SSOP (sanitation)

Notable Regulations:• Bioterrorism Act• cGMP (mfg. practices)• Food Labeling• FSMA (food safety)• 21 CFR Part 11 (e- records)• HACCP (hazards)

Post-prohibition, alcohol sales and distribution regulation has been largely controlled by state entities. The BAFT(1)

licenses importers, manufacturers, and wholesalers and regulates the advertising,

size of containers, and labeling

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FOOD PROCESSING PRODUCT LIFECYCLE

Pre-Production Production Post-Production

Key Stakeholders:Startup Purchasing

Storage / Inventory

Manufacturing & Production

Quality ControlPreservation /

PackagingWarehousing

Sales & Distribution

Variable Inputs Suppliers• Utilities• Ingredients• Packaging

• Building infrastructure (power generation, plumbing)

• Sale of raw ingredients

• Fulfill POs efficiently

• Purchase of primary processed products

Plant Owners & Operators

• Design & purchase facility

• Machinery & equipment

• Register facility with FDA

• Vendor management

• Storage condition requirements

• Manage stock levels

• Primary / secondary processing(1)

• Waste management / disposal

• Inspection to ensure product quality

• Identify allergens, contaminants, etc.

• Prepare products to be sold

• Minimize spoilage• Package

effectively for efficient storage

• Order picking & fulfillment

• Shipping & receiving

• Finished goods inventory tracking

• Labor mgmt.

• Sell to distributors or direct to retail / foodservice

• Manage vendor demand and pricing

Machinery & Equipment Providers

• Provide industrial machinery

• Provide processing equipment

• Material handling systems

• Refrigeration and other storage

• Prep (cleaning, grading, sorting)

• Mechanical processing equipment(2)

• Heat processing equipment(3)

• Food inspection and analysis equipment and instruments

• Preservation equipment(4)

• Packaging equipment(5)

• Material handling systems

• Refrigeration and other storage

Financial Institutions• Banks• Insurance• Exchanges

• Business loans• Equipment loans• P&C insurance

• Product withdrawal coverage

• Spoilage insurance

• Output derivatives markets

• Factoring

Regulatory Orgs• USDA• FDA• State alcohol

• Product specific regulatory requirements(1)

• Recordkeeping & tracking of product origins

• Labor laws• Hazard Analysis

and Critical Control Point (HACCP) training

• Product specific regulatory requirements(6)

• Uniform & accurate nutritional labeling

• Food Safety Modernization Act (FSMA)

• Recall programs

Others• Warehousing• Wholesalers

• Sale of raw farm products

• Cold storage• Order fulfillment

1. Primary processing activities include threshing, milling (grinding), pressing, filtering, refining, blending, slaughtering, butchering, homogenizing, pasteurizing, chilling, freezing, canning, shelling, drying, dehydrating, candying; secondary processing activities include mixing, roasting, baking, boiling, frying, steaming, pickling, comminution, smoking, brewing, fermenting, distilling, bottling, and canning.

2. Mechanical processing equipment includes size reduction (e.g., grinding, cutting), size enlargement (e.g., extrusion, forming), homogenization and mixing equipment.3. Heat processing equipment includes baking, blanching, dehydration, evaporation, frying, pasteurization, roasting, and sterilization.4. Preservation equipment includes chemical, head processing, irradiation, refrigeration and water reduction equipment.5. Packaging equipment includes printers, volumetric fillers, weight fillers, seamers, form-fill-seal (FFS) systems, checkweighers.6. Certain foods, such as low-acid canned foods, milk, eggs, juices, seafood, and infant formula have additional product-specific regulatory requirements to ensure they are free of contamination.

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FOOD PROCESSING ERP SOFTWARE SOLUTIONS

COMPLIANCE & QUALITY» Adjust process specifications according to USDA and FDA guidelines» Integrate government reporting requirements within operations for

automated compliance» Organize required quality audits and checks across all phases of the

processing lifecycle

MANUFACTURING & OPERATIONS» Streamline batch & lot production, recipe

management and floor management from a centralized platform

» Adjust production lines and schedules based on inventory and equipment

» Observe labor performance to validate product costs and workforce efficiency

» Forecast supply chain issues and minimize food waste

BATCH & LOT TRACEABILITY» Monitor batch and lot location data to

trace suspect items» Minimize losses in event of a recall and

comply with all federal regulations» Generate chemical and nutrition related

labeling

FINANCE & ACCOUNTING» Optimize financial data collection and provide instant

access to accounts receivable, accounts payable and the general ledger

» Track costs across facilities for enhanced business intelligence

» Input real-time data into purchasing schedules to better manage forecasting

» Leverage sales information to account for trade rebates and commissions

PLANT REPORTING & ANALYTICS» Analyze batch yield variances to respond

quickly to product sales trends» Isolate the impact of changing raw input

prices on gross margins» Measure plant KPI’s against peers to assess

performance» Integrate with tracking equipment and

sensors for automated data capture

MACHINE MAINTENANCE & REPAIR» Monitor the performance of critical plant

equipment» Manage unplanned MRO work orders and

machine parts inventory» Schedule preventative maintenance to

maximize the useful life of assets

WAREHOUSING & INVENTORY» Validate inventory location, amount, batch/lot number

and other characteristics » Utilize handheld barcode scanning devices to keep track

of inventory movements» Enhanced pick-pack-and-ship workflows and tracking» Consolidate third-party logistics scheduling» Integrate with back-office financial team for automated

transfer of fulfillment information

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FOOD PROCESSING ERP SOFTWARE LANDSCAPE

SOFTWARE SOLUTIONS

Processing-Specific ERP Functions Adjacent Solutions

Key Vendors:Formulation & Recipe Mgmt.

Production Planning (Batch)

Quality Management

Lot Traceability / Compliance

Maintenance & Repair

Warehouse Management

eCommerce / DSD / 3PL

CRM

● ● ● ● ● ● ● OnContact CRM

● ● ● ● ● ●

● ● ● ● ●

● ● ● ● ● ●

● ● ● ● ● ● ● ●

● ● ● ● ● ●

● ● ● ● ● ● ● ●

● ● ● ● Infor EAM Infor WMS Infor CRM

● ● ● ● ● Acq. Handoff

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SOFTWARE BUYERS

Primary Processing Secondary Processing

Key Vendors:Fresh / Preserved

ProduceMeat, Seafood,

PoultrySpices &

IngredientsDairy Products Bakery Beverages

Sauces & Dressings

CPG(1)

● ● ● ● ● ● ● ●

● ● ● ● ●

● Orbis MES

● ● ●

● ● ● ● ●

● ● ●

● ● ● ● ● ●

● ● ● ● ● ● ● ●

●

1. Includes candy, snacks, confectionary, as well as frozen/packaged/prepared foods.

FOOD PROCESSING ERP SOFTWARE LANDSCAPE (CONT.)

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1H’18 2H’18 1H’19 2H’19 1H’20 2H’20

FOOD PROCESSING ERP SOFTWARE M&A & FINANCING TIMELINE

Oct-20: Orchestra

Software merges with Encompass Technologies

Oct-19: Ekos raises

$7.1m Series A funding from NMP

Nov-20: Aptean acq.

Open Systems Adaptable Solutions

Nov-20: Aptean acq.

Agiles

Aug-20: Aptean raises

growth funding from TA & Charlesbank

Aug-20: Telus acq. AFS

Technologies

Jul-20: TA Associates &

EQT recapitalization of IFS

Jul-20: Bregal

Unternehmerkapital acq. GUS Group

Jun-20: Dairy.com acq.

Orbis MES

Jul-20: Aptean acq. DIN

Solutions

Mar-18: Aptean acq.

IndustryBuilt

Dec-18: Infor acq. Alfa-

Beta Solutions

Jul-18: Plex Smart

Manufacturing acq. Dattus

Jun-19: IFS (EQT

Partners) acq. Acumatica

Jan-19: Dassault

Systemes acq. IQMS

Jul-19: Banneker Partners

acq. Dairy.com

Aug-19: Aptean acq.

Sanderson Group

Oct-19: Aptean acq.

Linkfresh

Oct-19: Aptean acq. Beck

Consulting

Oct-19: Datacor acq.

TrackAbout

Jan-20: Katana raises

$3.9m seed funding from 42CAP

Nov-19: Aptean acq.

Schouw Informatisering

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1. Pitchbook

VENDOR SPOTLIGHT: APTEANAptean provides an integrated suite of purpose-built, vertically-specific software solutions, that includes ERP, supply chain management, manufacturing solutions, transportation, and asset management, across its portfolio of brands. The Company’s solutions are used by over 6,000 organizations in 54 countries to meet their unique industry challenges with tailored solutions that drive operational efficiency.

INDUSTRIES

• Food & Beverage: Complete range of software solutions that provide producers, manufacturers, processors, and distributors with specialized tools for traceability, recipe management, quality control, and forecasting

• Distribution & Retail: Software product suite geared towards wholesale distribution, third party logistics, retail, and consumer goods importers; capabilities include supply chain management, forecasting and inventory, managed and integrated EDI, and transportation / import management

• Financial Services: Insurance, banking, and consumer credit solutions include complaints and dispute management, regulatory compliance, and customer experience management

• Industrial Manufacturing: Discrete manufacturing software with a focus on fabricated metals, computers and electronics, and electrical / transportation equipment; solutions include mixed-mode manufacturing, shop floor execution, planning and scheduling, order costing, production monitoring, and more

KEY COMPETITORS

WHY WE LIKE APTEAN

Since its formation in 2012, Aptean has been focused on providing hyper-niche software solutions, particularly through industry consolidation, acquiring dozens of companies in a range of verticals within the last few years. Aptean has achieved scale quickly, reaching 6,000+ customers in 54 countries across more than 20 industries, while maintaining focus and expertise in specific verticals (e.g., Food & Beverage). The business has a proven track record of inorganic growth and has been able to acquire international scale and product expertise across ERP, supply chain, management, and compliance functionalities.

RECENT EVENTS & ANNOUNCEMENTS

• Aptean Expands Enterprise Software Presence in [DACH] with Acquisition of Modula (Dec 1, 2020)

• Aptean Enhances ERP Offerings for Process & Discrete Mfg. with Acquisition of OSAS (Nov 17, 2020)

• Aptean Expands Food & Bev ERP Leadership in Europe with German Acquisition of agiles (Oct 5, 2020)

GENERAL

Founded: 2012

HQ: Alpharetta, GA

Website: www.aptean.com

Employees: ~2,000

Management:

• CEO: TVN Reddy• COO: Alan Somerville• CFO: Kevin McAdams• CTO: Jenny Peng• Corp Dev: Brad Debold

FINANCIALS & SIZE METRICS

Revenue: $300m+ (2020E)

Rev. Growth: n/a

EBITDA Margin: Profitable

Customers: 6,000

Users: n/a

FUNDING

Last Round: June 2020

Total Raised: Confidential

Post-$ Valuation(1): $2,000m

Investors: TA Associates, Vista, Charlesbank

TARGET MARKETS & CUSTOMERS

Food & beverage, distribution & retail, financial services, and industrial manufacturing industries

“We believe that our ability to meet the mission-critical needs of specific industries with cloud-hosted, purpose-built ERP and supply chain software is unmatched in our sector. [Recent investments] will enable us to accelerate the development of our next-generation cloud solutions, as well as our organic and inorganic growth initiatives.”- TVN Reddy, CEO, Aptean

https://www.aptean.com/our-company/news-and-press/acquisition-of-open-systems-adaptable-solutions

https://www.aptean.com/our-company/news-and-press/acquisition-of-open-systems-adaptable-solutions

https://www.aptean.com/our-company/news-and-press/aptean-acquisition-of-agiles

https://www.aptean.com/

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SELECTED FOOD PROCESSING ERP SOFTWARE VENDOR PROFILES


BatchMasterwww.batchmaster.com

HQ: Irvine, CAFounded: 1983CEO: Sahib Dudani

• BatchMaster develops and implements process manufacturing ERP solutions for food & beverage, chemicals, personal care & cosmetics, nutraceuticals, life sciences, pharmaceuticals, and other process industries

• Food division covers general food, bakeries, beverages, dairy, dressings & sauces, and seasonings & additives

• Food product suite spans compliance & traceability, costing & analysis, formulation & packaging, inventory, planning & scheduling, batch production, QC & QA, and warehousing


• Total funding: n/a • Division of eWorkplaceManufacturing, Inc.

Dairy.comwww.dairy.com

HQ: Frisco, TXFounded: 2000CEO: Scott Sexton

• Dairy.com provides both dairy management solutions and market intelligence for producers, processors and distributors

• Supports nearly 80% of Dairy Foods’ Top 100 companies to enhance bottom-line results• Processing-specific solution, Dairy.com Manufacturing, enables dairy enterprises to effectively

manage their input components, traceability and cost structure to enhance visibility through the end-product

• Significant add-on capabilities including financial, floor and EDI integrations• Complimentary advisory services that provide access to real-time dairy market data and a network

of previous contract negotiations

• Total funding: n/a • Acquired by Banneker Partners (Jul 2019)

Datacorwww.datacor.com

HQ: Florham Park, NJFounded: 1981CEO: Tom Jackson

• Datacor is a leading provider of ERP and CRM solutions for formula-based batch manufacturers, process manufacturers and chemical distributors.

• The Company’s solutions help enterprise’s optimize efficiency and growth through streamlining their operations across manufacturing, distribution, inventory and customer management.

• Comprehensive ERP solution designed to consolidate back-end operations into one location for centralized inventory and procurement, business intelligence, financial management, health & safety compliance, manufacturing, accounting, CRM and plant maintenance

• Target food & beverage industries include bakeries, beverages, flavors/fragrances, and ingredients

• Total funding: $15.0m • Raised $15.0m of mezzanine financing from Goldman Sachs Private Capital (Aug 2016)

Deacomwww.deacom.com

HQ: Chesterbrook, PAFounded: 1995CEO: Jay Deakins

• Deacom is a comprehensive ERP platform for global food & beverage, health & beauty, chemical, medical device, and high-tech manufacturers & distributors

• Food and beverage manufacturing division spans beer, candy & snack, consumer packaged goods, dairy, meat, and wine & spirits

• Food ERP solution features include lot traceability, batch management, QC visibility & control, customer shipment reports, direct store delivery (DSD) & POS systems, and inventory management


• Total funding: n/a • n/a

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SELECTED FOOD PROCESSING ERP SOFTWARE VENDOR PROFILES (CONT.)


DELMIAworkswww.3ds.com

HQ: Paso Robles, CAFounded: 1989CEO: Cheri Williams

• The DELMIAworks division is the rebranded name of IQMS, as a division of Dassault Systemes• DELMIAworks develops ERP solutions and integrated manufacturing execution systems (MES) for

repetitive, process and discrete manufacturers• DELMIAworks Food ERP connects all aspects of processing operations, reducing costs associated

with ingredient spoilage & lot expirations, simplifying customer & industry audits, and managing inventory & ingredients to ensure efficient customer deliveries

• Tools to address global food safety regulations including FDA, FSMA, PTI, GFSI, HACCP and SQF oversight

• $425m EV (Dec 2018)

Revenue:• ~$56m (CY2017)

• Acquired by Dassault Systemes (Dec 2018)

• $75m growth financing led by Banneker Partners and TCV (Sep 2014, Jul 2015)

IFSwww.ifs.com

HQ: Linköping, SWEFounded: 1983CEO: Darren Roos

• IFS develops and delivers enterprise software for customers around the world who manufacture and distribute goods, build and maintain assets, and manage service-focused operations

• IFS food and beverage ERP gives manufacturers full visibility into their supply chain and operations, offering features such as demand planning & forecasting, integrated HACCP & quality control, forward & backward traceability, trade management, CRM, NPD, and mobile integration

• Streamlined distribution support for scan-based trading (SBT) and direct store delivery (DSD) to decrease paperwork, inventories and costs

• ~$3,400m EV (2020)• $1,700m EV (2015)

LTM as of 6/30/2020:• Revenue: ~$725m• EBITDA margin: ~23%

• Recapitalized by EQT and TA Associates (Jul 2020)

• Acquired by EQT (Nov 2015)

Inforwww.infor.com

HQ: New York, NYFounded: 2002CEO: Kevin Samuelson

• Infor provides cloud-based enterprise planning solutions for companies in industry specific markets

• 17,000 employees and ~2,200 partners support an ecosystem of 67,000 customers in 178 different countries

• Infor CloudSuite Food & Beverage offers the tools to accelerate food and beverage processing supply chains, offering features such as forecasting & demand planning, production planning & scheduling, seasonality management, quality management tracking, recipe formulation and labeling support

• ~$11,000m EV (2020)• ~10,000m EV (2017)

LTM as of 1/31/2020:• Revenue: ~$1,785m• EBITDA margin: ~18%

• Acquired by Koch Equity Development (Jan 2019, Apr 2020)

(1)

Orchestrawww.orchestrasoftware.com

HQ: Portland, ORFounded: 2008CEO: Brad Windecker

• Orchestra offers ERP solutions for the craft beverage industry designed to serve breweries, distilleries, and cideries

• Helps customers control operational costs, ensure TTB compliance, expand margins and increase top-line growth

• Flagship solution boasts multifaceted functionality including supply chain management & procurement, inventory control & warehouse management, production planning & scheduling, recipe management, production processing, accounting & finance, compliance, analytics & insight, real-time alerting, and authorization & control


• Total funding: $14.0 • Merged with Encompass8 (Oct 2020)

• $14m growth financing by Radian Capital (Dec 2018)

1. Apr 2020 secondary transaction to acquire the remaining equity from Golden Gate Capital

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I. GCA COVERAGE……………….…………………………………………………………………………………..……... 3





VI. WINERY DIRECT-TO-CONSUMER SECTOR SNAPSHOT….………………………………….…………………… 62

VII. APPENDIX…………………………………………………………………………………………………………………….. 73

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Nov 2020 $700.0 n/a

Jul 2020 n/a n/a

Mar 2019 n/a n/a



Calistoga, CA

1997Paul Thienes n/a n/a

Vancouver, BC

2018

Andrew Kamphuis

n/a n/a

Bellevue, WA

2002Matt Payne n/a n/a

Cranberry Township, PA

1995

Michael Cornell

Acq. by WCAS n/a

Sonoma, CA

2011Chris Towt n/a n/a

Mesa, AZ

1999Ted Starr n/a n/a

Napa, CA

2015

Jason Curtis (GM)

Acq. by Jonas Software (TSX:CSU)

n/a

American Canyon, CA

2002Joe Waechter $52.0 n/a

Temecula, CA

2013Michael Leahy Acq. by Fullsteam n/a



Mar 2019Queens Court Capital

Management, Czar Capital, SWAT Equity Partners

$6.1 $24.0

Sep 2018 $15.0 $70.0

Mar 2017 $1.7 n/a

1. Wines Vines Analytics; IBISWorld Industry Report 31213, Wineries in the US (December 2019)2. SVB State of the Wine Industry Report 2020, Rabobank, 2020 Alcohol E-Commerce Playbook

WINERY DIRECT-TO-CONSUMER (“DTC”) SOFTWARE MARKET OVERVIEW

MARKET OBSERVATIONS

• 10,472 U.S. wineries sold ~$26B worth of product in 2019(1), while retail sales reached $72B(2), indicating a significant margin capture opportunity for wineries that leverage DTC

• Complex regulations create a unique dynamic in distribution of wine:• Most states do not allow retailers to ship wine to consumers across state borders• Today, 45 states permit direct-to-consumer shipping across state lines

• COVID-19 has accelerated consumer adoption of DTC, particularly in the beverage alcohol markets, while wineries are increasingly exploring the channel due to lack of foot traffic


# Wineries:

10,472in U.S.(1)

Total Winery DTC Sales:

$7.8bin U.S.(2)


• Target Market(s): Winery DTC software is typically sold to wineries with >$50k DTC GMV. Wineries with >$15m GMV often build their own in-house technology solution.

• Revenue Models: Subscription fees, usage/volume-based fees, revenue share via transaction payment processing

• Market Tiers: Wineries are size tiered by the number of cases shipped annually (L: 500k+, M: 50-500k, S: 5-50k, VS: 1-5k, Limited: <1k). A smaller number of larger wineries exist and produce high-volume, low-cost wines with relatively tighter margins. The middle and lower size tiers trend toward higher value cases at higher margins and therefore stand to benefit more from additional margin capture selling direct to consumers.

• Product Features: eCommerce enablement, POS, Wine Club, payments (integration), compliance (integration), fulfillment, inventory management, shipping (integration), marketplace (integration), CRM, reporting & analytics

https://winesvinesanalytics.com/statistics/winery/

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3 4

1. Wines Vines Analytics; IBISWorld Industry Report 31213, Wineries in the US (December 2019)2. SVB State of the US Wine Industry 2020 report3. Rabobank The 2020 Alcohol E-Commerce Playbook

WINERY: MACRO MARKET OBSERVATIONS

10,472 U.S. Wineries sold ~$26 billion worth of product in 2019(1) Less than 40% of domestic winery production was sold through the wholesale channel

Total U.S. Wine retail sales reached $72.0 billion in 2019(2)Approximately 60% of domestic winery production was sold direct in 2019

• The number of U.S. wine distributors has contracted to 958 (Wines Vines Analytics)

• Prior to 2016, there was significant channel shifting away from wholesale and over to the DTC channel (SVB survey)

• Major private wholesalers have merged and directed most of their efforts toward securing the largest winemaking clients

• The average small winery today is selling only 34 percent through wholesale channels and at the lowest gross margin of all channel options

• This trend makes it difficult for small, local wineries to negotiate distribution contracts with major distributors

• 57.6% of winery output was sold direct; either direct-to-trade (29.9%) or direct-to-consumer (27.7%)

• The value of shipped cases in the DTC channel grew to $4.5 billion, a 14%(2) CAGR in the five-year period leading up to 2019

• New eCommerce models have emerged to bypass the traditional three-tier beverage alcohol distribution system

• Wine retail sales equal the majority (54.2%) of online alcohol sales ($983.4M total; $523.2M wine)(3)

• Retail sales represents ~200% markup over winery sales

• Luxury wineries sell most of their wine through DTC channels: on-premise (events, tasting rooms), Wine Clubs, or online (eCommerce, marketplaces)

• Smaller wineries use DTC for access to markets they can otherwise not get distribution forDirect-to-Consumer (DTC): Direct-to-Trade (DTT):

72 wineriesOver 500,000 cases

269 wineries50,000 to 499,999 cases

1,673 wineries5,000 to 49,999 cases

3,744 wineries1,000 to 4,999 cases

4,714 wineriesUnder 1,000 cases

Number of U.S. Wineries by SizePER PRODUCTION OF9L CASES ANNUALLY

97%OF ALL U.S. WINERIES PRODUCE LESS THAN 50,000 CASES ANNUALLY

https://winesvinesanalytics.com/statistics/winery/

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Warehouses

FOOD & BEV SERVICE(On-Prem Consumption)

FOOD & BEVRETAILERS(Off-Prem Consumption)

PRODUCER DIRECT-TO-CONSUMER (DTC)

Sources:IBISWorld Industry Report 31213, Wineries in the US (December 2019), Statista, SVB State Of The Wine Industry Report 2020

WINERY: SALES CHANNELS

Import/Export

Bars & Restaurants

Hotels

Liquor

Grocery & Supermarket

Convenience

Alcohol Marketplaces

Shoppers & Members

Other

Shoppers

GuestsDistributor

Winery Brands

Online(eCommerce &

Wine Clubs)

Offline(Tasting room POS & Events)

Online

Offline

Online

Offline

Online

Offline

Online

Offline

Offline

Offline

Third-party delivery from Retailer

Winery Direct-to-Consumer

Winery Direct-to-Trade

5.3%

Export

17.0%

Retail

37.1%

Wholesale

Offline

Online

Wineries:• On-site sales (bottled or by-

the-glass)• Must close at 9p• Can sell via direct mail,

eCommerce (not more than 12 cases per consumer)

• Can distribute via Wine Coop if winery produces <25,000 gallons

Note: “Direct-to” implies:1. Fulfillment obligation2. Customer data retention

27.7%

DTC

U.S. WineriesGrowers

12.9%

Food Service

Distributors:• Handle marketing and distribution• One Distributor per brand, per region• Contracts don’t expire; must be purchased at

“fair value”

Winery Technology Opportunities

100%

Domestic

$30.1bSOURCED

$25.9bDOMESTIC

$4.2bIMPORTED

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Warehouses

FOOD & BEV SERVICE(On-Prem Consumption)

FOOD & BEVRETAILERS(Off-Prem Consumption)

PRODUCER DIRECT-TO-CONSUMER (DTC)

WINERY: BEVERAGE ALCOHOL ECOSYSTEM

Import/Export

Bars & Restaurants

Hotels

Liquor

Grocery & Supermarket

Convenience

Alcohol Marketplaces

Other

Distributor

Winery Brands

Online(eCommerce &

Wine Clubs)

Offline(Tasting room POS & Events)

Online

Offline

Online

Offline

Online

Offline

Online

Offline

Offline

Offline

Third-party delivery from Retailer

Offline

Online

U.S. WineriesGrowers

$25.9BDOMESTIC

$4.2BIMPORTED

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Source: WineDirect, 2019 Direct-to-Consumer Sales Report1. WineDirect management analysis.2. Per SVB’s State of the US Wine Industry 2020 report3. Wine Business Monthly, April 20204. https://ccinsight.org/observations/us-retailers-see-online-growth-yoy-in-april-similar-to-recent-holiday-season/

WINERY: DIRECT-TO-CONSUMER MARKET

10%

8%

15%

22%

25%

44%

9%

7%

8%

11%

11%

12%

56%

53%

36%

31%

25%

5%

25%

32%

41%

37%

39%

39%

0% 20% 40% 60% 80% 100%

<$20

$20 - $29.99

$30 - $39.99

$40 - $59.99

$60 - $99.99

$100+

Other Website Point of Sale Wine Club

DTC SALES STATISTICS (2019) DTC SALES BY CHANNEL (2019)

$2.7bDTC

non-shipped(1)

$4.5bDTC

shipped(1)

$485Per shipped

case(2)

$40.70Avg. price per

shipped bottle(2)

$5Avg. shipping

fee per bottle(3)

14%

5-year CAGR(2)

TAILWINDS

• Statewide stay-at-home orders related to COVID-19 are forcing food & beverage consumers to adopt online sales channels

• U.S. retailers' online YoY revenue growth is up 68% as of mid-April 20204, similar in pattern to year-end holiday season shopping

• Millions of consumers creating and reinforcing new online buying behaviors and habits

• Higher gross margins are a clear driver of the industry’s move to DTC

• Per SVB, Gen Xers and Boomers are demonstrating spending resilience, increasing their purchases of wine above the $9 bottle price

HEADWINDS

• Added overhead and shipping costs make profitable sales a challenge

• Large distributors and their trade representatives are strident detractors of the DTC model

• A lag in innovating alternative DTC strategies beyond the tasting room and club models is limiting DTC growth for family wineries

PER PRICE RANGE OF BOTTLE

• As bottle prices increase, Point of Sale revenues decrease in importance while Other revenues increase

• Other orders, likely predominantly tele-sales or hand-sell orders executed by a winery employee

• Wines priced at < $30 sell much more via the Point of Sale and much less through Wine Club and Other. This may be because it is harder to compete at those price points with grocery store options

• Website sales remain fairly consistent at all price points, suggesting that people will buy your wine online regardless of how much it costs

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Source: Wine Spectator1. Capacity-cap limit on the wineries that may deliver to their residents or place wholesaler-representation restrictions on which wineries may ship wine to consumers

LEGAL ENVIRONMENT HAS TILTED IN FAVOR OF OUT-OF-STATE WINERY SALES

UT

AR

MS AL

DE

RI

LA

OHNJ

Winery direct shipping permitted

Limited winery direct shipping1

Winery direct shipping prohibited

• Historically complex landscape of state and federal regulations prevented most out-of-state delivery of alcoholic beverages

• 2005: Granholm v. Heald US Supreme Court decision forced most states to update direct-to-consumer wine regulations

• Decision led to more states to permitting direct-to-customer wine shipments to private citizens inside and outside the state of manufacture, within certain limits(1)

• The most prominent effect of this ruling has been increased internet sales for US wineries, driving up profit for larger operators

States that permit out-of-state direct shipping by:

2005 2020

Wineries 27 45

Retailers 18 13

https://www.winespectator.com/articles/us-wine-shipping-laws-state-by-state-50258

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2007 2012 2013 2014 2015 2016 2017 2018 2019 2020

WINERY: SOFTWARE M&A & FINANCING TIMELINE

Oct-19: Ekos raises

$7.1M VC funding from Noro-Moseley

Sep-18: Process2Wine

acq. Wine Management Systems

Aug-13: WineDirect acq.

Elypsis Winery Software

Sep-17: BlackSquare

raises $1.2M VC funding from BDC Capital

2015: Granbury Solutions

forms VinSuite Platform

Jan-13: eWinery Solutions

merges with Napa Valley POS

Apr-07 – Feb 12 :

WineDirect raises $50M+ over 5 years primarily led

by Sid R Bass

Jan-19: Avalara acq.

Compli

Dec-20: Welsh, Carson,

Anderson & Stowe acq. TrueCommerce

Sep-13: Granbury acq.

WineWare Software

Sep-15: Sovos acq.

WineDirect Compliance

Jun-12: WineDirect acq.

Vin65

May-16: BlackSquare

raises VC funding from AVAC Group

Nov-18: VinSense raised

VC funding from Elevate Ventures

Aug-18: Jonas Software

(Constellation) acq. Orion Wine Software

Mar-19: Jonas Software

(Constellation) acq. WineFetch

DTC Focus Winery SoftwareKEY

Sep-14: Granbury

acquires eWinery & WineWeb

Mar-18: Jonas Software

(Constellation) acq. VinSuite

Mar-19: Thirstie raises

$6.1m led by Queens Court, Czar Capital &

SWAT Equity

Jul-20: Commerce7 acq.

Truvi

Sep-18: Drinks raises $15.0m led by Beverly

Pacific

Mar-19: Fullsteam

(Aquiline) acq. Xüdle

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WINERY: LEADING DTC SOFTWARE VENDORS BY SOLUTION

COMPANY OWNERSHIP / FUNDING KPIs / SIZE ECOMMERCE WINE CLUB WINERY POSINTEGRATED PAYMENTS

MARKETPLACE DISTRIBUTION FULFILLMENT

Ontario, CanadaFounded: 2015

Private 1-10 employees Yes Yes Yes

No(Integrates to Global

Payments & CardConnect)

No No

Pleasanton, CAFounded: 2003

Private 1-10 employeeseCommerce

Activ8 HostedClub Automation

POS Mobile Tasting Room

No(Integrates to

Worldpay, OpenEdge, Evo)

NoNo

Self-fulfill or 3rd

Party Shipping

Santa Rosa, CAFounded: 1981

Private 1-10 employeesWinery Shopping

CartWine Club

Tasting Room Cash Register

No No No

Vancouver, BCFounded: 2018

Private 5-10 employees eCommerce Wine Club POS

Unclear(Integrates to

CardConnect, Poynt, Stripe)

WineDepotintegration

No

Calistoga, CAFounded: 1997

Private 1-10 employees Yes Yes Yes Yes No No

Healdsburg, CAFounded: 2009

Private 1-10 employees Yes Yes Yes No No No

Bellevue, WAFounded: 2002

Private ~10 employees eCommerce Wine ClubWinery Point of

Sale


WorldPay, OpenEdge)

No No

San Francisco, CAFounded: 2017

Private ~10 employees Yes Yes Yes

Yes(integrates to Stripe, Braintree, Mygate,

Nab)

No No

Cranberry Township, PAFounded: 1995

WCAS

~800 employees (multi-industry)15-20 employees focused on Nexternal

DTC Sales

Wine Allocation Mgmt.

Wine Club Software

Point of Sale for Wineries

NoYes

(unclear on Wine-specific)

No

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WINERY: LEADING DTC SOFTWARE VENDORS BY SOLUTION (CONT.)

COMPANY OWNERSHIP / FUNDING KPIs / SIZE ECOMMERCE WINE CLUB WINERY POSINTEGRATED PAYMENTS

MARKETPLACE DISTRIBUTION FULFILLMENT

San Jose, CAFounded: 2002

Private 1-10 employeesWinery

eCommerceWine Club Software

Winery POS(Revel integration)

No No No

Sonoma, CAFounded: 2011

Private450+ craft producers~10 employees

Yes YesIntegration with

Square


Stripe)No No

Mesa, AZFounded: 1999

Private“Hundreds” of wineries in 16 states

eCommerce Wine Club Point of Sale Yes No No

Santa Rosa, CAFounded: 1980

Division of KLH Consulting (Built on MSFT Dynamics)

~70 employees of KLH Yes Yes Yes No No No

Napa, CAFounded: 2015

Parent: Constellation Software (TSX: CSU)

250-500 employees eCommerce Wine Club POS

Unclear(integrates to

OpenEdge, Worldpay)

No No

American Canyon, CAFounded: 2002

Sid Bass, AllegisCyber, PEI($52m raised)

$66.5m rev(1)

1,800+ wineries5m+ orders processed annually

Yes Yes Yes Yes Yes Yes

Napa, CAFounded: 1991

Private 1-10 employeesWinery

eCommerce Software

Wine Club Management

Software

Winery Point of Sale Software

Yes No No

Temecula, CAFounded: 2013

Parent: Fullsteam

19 states260K+ wine club members4.5M bottles sold$125M sales processed1-10 employees

Xudle’sCloudware

eCommerce

Xudle’sIntegrated Wine

Club Mgmt. Software

Xudle’sCloudware POS

Software for Wineries

Xudle Pay, Powered by Fullsteam

No No

1. Capital IQ estimate.

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WineDirect provides an end-to-end suite of DTC solutions for wineries and enterprises, including Point of Sale, eCommerce, Marketplace Distribution, Fulfillment and Wine Club Integrations. The company’s solutions power over 1,800 wineries through a uniquely tailored approach that consolidates customer service and delivery efforts.

SOLUTIONS

• Wine Club: All-in-one membership management solution to automate sign-ups, club processing, email alerts and in-depth reporting, helping wineries increase member retention and club growth

• Point of Sale: Mobile sales solution that processes and tracks transactional information across products, customers and inventory, enabling wineries to turn tasting room visitors into online buyers

• eCommerce: Internet integration solution that provides wineries with custom templates to design their digital store front; features include upselling tools, CRM, email marketing, and payment processing

• Marketplace Distribution: 3rd party integration feature that allows wineries to seamlessly connect to distribution platforms such as eBay, Vivino and many top travel & luxury loyalty programs

• Fulfillment: Order fulfillment solution alongside state-of-the-art warehouse facilities to enhance shipping capacity, inventory management and personalized handling support

KEY COMPETITORS

WHY WE LIKE WINEDIRECT

Due to the global pandemic, analysts estimate that the shift to DTC has accelerated 2-5 years and consumer behavior has been fundamentally altered. Wineries are adapting to the “new normal” and embracing the DTC channel both to access additional demand and improve margin capture. As the only fully-integrated winery software and fulfillment platform, WineDirect is the clear market leader in DTC enablement. In a world where the “Amazon effect” has heightened consumer expectations, WineDirect is poised to help wineries meet this growing demand.

RECENT EVENTS & ANNOUNCEMENTS

• WineDirect Offsets 100% of Carbon Emissions From DTC Shipping (Feb 13, 2020)

• WineDirect and VinDashboard Announce Partnership to Offer an Automatic DTC Business Intelligence Solution for Wineries (Apr 2, 2019)

GENERAL

Founded: 2002

HQ: American Canyon, CA

Website: www.winedirect.com

Employees: ~170

Management:

• CEO: Joe Waechter• CFO: John Gilmer• SVP eComm: Jim Agger

FINANCIALS & SIZE METRICS

Revenue(1): $66.5m

Rev. Growth: n/a

EBITDA Margin: n/a

Customers: 1,800+

Users: n/a

FUNDING

Last Round: February 2012

Total Raised: $3.5m

Post-$ Valuation(2): $25.3m

Investors: Undisclosed

TARGET MARKETS & CUSTOMERS

Wineries of all sizes, from family-owned vineyards to enterprise-level wineries

“This year’s sea change underscores the need for wineries to focus on eCommerce. Online sales have skyrocketed and many of our eCommerce and fulfillment clients have seen unprecedented growth. With these changing tides, we’re enabling wineries to scale in a way no other DTC partner can.”- Joseph Waechter, CEO, WineDirect

1. Capital IQ estimate2. PitchBook estimate

VENDOR SPOTLIGHT: WINEDIRECT

https://www.winebusiness.com/vendornews/?go=getVendorNewsArticle&dataId=226119

https://www.winebusiness.com/vendornews/?go=getVendorNewsArticle&dataId=211990

https://www.winedirect.com/

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I. GCA COVERAGE……………….…………………………………………………………………………………..……... 3






VII. APPENDIX………….…………………………………………………………………………………………………….. 73

74

GLOSSARY (1/5)

• Ag-retailer – Independent dealerships or cooperatives offering fertilizer, crop protection products, seed, and custom application services. (More specifically, products include: fertilizer, adjuvants, micronutrients, crop protection products, precision agriculture, custom application, seed treatment, biotech seed, and traditional seed)

• Aggregation – Aggregation in the futures markets is a process that combines of all futures positions owned or controlled by a single trader or group of traders into one aggregate position.

• Agribusiness – Composed of companies operating at the production, wholesale and processing levels of the food supply chain up to and excluding the point of retail sale. The industry involves producing agricultural products, transforming them into consumable goods and moving them to market.

• Agricultural Price Index – A measure of the returns farmers receive at the farmgate

• Agritech – The use of technology in agriculture, horticulture, and aquaculture with the aim of improving yield, efficiency, and profitability. Agritech can be products, services or applications derived from agriculture that improve various input/output processes.

• Agronomy – Agronomy is the science and technology of producing and using plants in agriculture for food, fuel, fiber, and land restoration. It is both a humanitarian career and a scientific one. Agronomy solutions focus on fields and include crop management, weather management, and soil management.

• Beginning Stocks – Existing supplies of a farm commodity that consist of remaining stock carried over from the previous year's production.

• Broilers – Mature, young chicken of either sex produced for meat. The terms "broilers," "fryers," and "young chickens" are used interchangeably.

• Bushel – A unit of measure containing 2,150.42 cubic inches.

• Carcass-weight equivalent (CWE) – The weight of meat cuts and meat products converted to an equivalent weight of a dressed carcass. Includes bone, fat, tendons, ligaments, and inedible trimmings (whereas product weight may or may not).

• CAT Coverage – Crop insurance coverage at the lowest, or "catastrophic" level. CAT coverage is set at the 50/55 level, meaning that yield must fall below 50 percent of average yield before a loss is paid, and such losses are paid at a rate of 55 percent of the highest price election. Producers must pay a service fee to become eligible, but the government pays the entire premium.

• Cereals – Generic name for certain grasses that produce edible seeds. Also used for certain products made from the seeds. Cereals include wheat, rice, and coarse grains such as oats, barley, rye, millet, corn, and sorghum grain.

• Cold Chain Management – Cold chain is a logistics management process for products that require refrigerated temperatures to prepare, store, and transport products along the cold supply chain. Failure to keep cold chain products cold will render them unusable, which leads to a wastage of the products and losses for shippers and buyers.

• Commodity crop – Commodity crops are any crops that are traded. Generally they are relatively nonperishable, storable, transportable, and undifferentiated: one corn kernel looks like any other corn kernel. But in our national discussion about food and agriculture policy, “commodity crop” refers to those that are regulated by federal programs under the commodity title of the U.S. Farm Bill. There have been 20 of them, but the major five that take the lion’s share of taxpayer money are cotton, wheat, corn, soybeans, and rice.

• Commodity specialization – A farm's commodity specialization is determined by the one commodity or related group of commodities that makes up at least 50 percent of the farm's total value of production. This definition is consistent with the North American Industry Classification System (NAICS).

• Consumer Packaged Goods (CPG) – Items used daily by average consumers that require routine replacement or replenishment, such as food, beverages, clothes, tobacco, makeup, and household products.

• Crop Insurance – Insurance product purchased by agricultural producers, and subsidized by the federal government, to protect against either the loss of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities.

• Yield-Based – when electing to participate in the crop insurance program, the producer selects both the percentage of yield loss of the crop covered by the crop insurance policy and the percentage of the market price of the covered crop based on estimated market conditions.

• Revenue-Based – revenue-based insurance policies operate in much the same way as yield-based policies except that producers insure a target level of revenue based on the market prices of the covered crop and the producer's yield history. Between 2000 and 2014 farmers, in aggregate, got back $2.20 in claims for each dollar they paid in premiums, an annual return of 120 percent.

75

GLOSSARY (2/5)

• Crop Rotation – The practice of alternating the annual crops grown on a specific field in a planned pattern or sequence in successive crop years so that crops of the same species or family are not grown without interruption on the same field. Perennial cropping systems employ means such as alley cropping, intercropping, and hedgerows to introduce biological diversity in lieu of crop rotation.

• Crop year – The year in which a crop is harvested in contrast to the marketing year. For wheat, barley, and oats, the crop year is June 1 to May 31. For corn, sorghum, and soybeans, it is October 1 to September 30, and for cotton, peanuts, and rice, it is August 1 to July 31.

• Cultivation – Digging up or cutting the soil to prepare a seed bed; control weeds; aerate the soil; or work organic matter, crop residues, or fertilizers into the soil.

• Ending stocks – The remainder of current crop production carried over into the next crop year.

• Family Farm – The general concept of a family farm is one in which ownership and control of the farm business is held by a family of individuals related by blood, marriage, or adoption. Family ties can and often do extend across households and generations.

• Farm – A farm is defined as any place from which $1,000 or more of agricultural products were produced and sold, or normally would have been sold, during the year.

• Farm – A nationwide network of borrower-owned lending institutions and specialized service organizations. The Farm Credit System provides loans, leases, and related services to farmers, ranchers, rural homeowners, aquatic producers, timber harvesters, agribusinesses, and agricultural and rural utility cooperatives.

• Farm gate value – The farm gate value of a cultivated product in agriculture and aquaculture is the market value of a product minus the selling costs.

• Farm Management Information System (FMIS) – A record-keeping and planning system that organizes people, crops/livestock, inventory, equipment, and financial records for a farm. Can include additional functionality including precision agronomy, crop marketing, sensor integration, vendor/supplier profiles, field planning, food safety and compliance etc.

• Farm operator and principal farm operator – The farm operator is the person who runs the farm, making day-to-day management decisions. The operator could be an owner, hired manager, cash tenant, share tenant, and/or a partner. If land is rented or worked on shares, the tenant or renter is the operator.

• Farm operator household – Farm operator households are those who share dwelling units with principal farm operators of family farms.

• Farm operator household income – Total income for the farm operator household consists of income from the farm business, income from other farming activities, and income from earned and unearned off-farm sources.

• Farm Subsidies – US government payments to farmers to protect against fluctuations in prices, revenues, and yield.

• Direct payments are paid at a set rate every year regardless of conditions

• Counter-cyclical payments are triggered when market prices fall below certain thresholds.

• Revenue assurance program provides for overall profitability for a given crop.

• Marketing loans offer very favorable terms whereby farmers can realize tremendous gains through loan deficiency payments (LDPs) and commodity certificates.

• Disaster payments recoup large losses due to natural phenomena. And the government subsidizes crop insurance to further insulate farmers from risk.

• Farm weight – The weight of a commodity as measured on the farm before further conditioning and processing.

• Field-level – Lowest level of the automation hierarchy and consists of field devices such as sensors and actuators. Sensors, the eyes and ears of automation, collect data on temperature, pressure, speeds, feeds, and so on, convert it to electrical signals, and relay it up to the next level. The main task of these field devices is to transfer data on processes and machines for monitoring and analysis.

• First Line Handlers – First line handlers include both for-profit commodity trading companies and farmer cooperatives that aggregate the output of individual farms to gain economies of scale and market access to the rest of the food supply chain. First line handlers also include companies that wash, wax, wrap, and pack fruits and vegetables, as well as flour millers, oilseed processors, and other firms that prepare raw materials for use in the processing and manufacturing of finished food products. By-products from this sector often are fed to livestock or used in industrial processes.

• Food company – Businesses involved in food production or processing.

76

GLOSSARY (3/5)

• Food loss – According to the Food and Agriculture Organization of the United Nations, food loss means "any change in the availability, edibility, wholesomeness or quality of the food that prevents it from being consumed by people." In the ERS Food Availability Data System, food loss represents the edible amount of food, postharvest, that is available for human consumption but is not consumed for any reason. It includes cooking loss and natural shrinkage (for example, moisture loss); loss from mold, pests, or inadequate climate control; and food waste. Also see food waste.

• Food waste – Food waste is a component of food loss and occurs when an edible item goes unconsumed, as in food discarded by retailers due to color or appearance and plate waste by consumers. The ERS Food Availability Data System is used to estimate food loss and not food waste (a subset of food loss). Also see food loss.

• Foodservice – Defines those businesses, institutions, and companies responsible for any meal prepared outside the home. This industry includes restaurants, school and hospital cafeterias, catering operations, and other food preparation locations. Defined as companies responsible for food prepared outside the home.

• Foodservice distributors – Company that provides food and non-food products to restaurants, cafeterias, industrial caterers, hospitals, schools/colleges/universities, nursing homes, and anywhere food is served away from the home.

• Forward contract – An agreement between two parties calling for delivery of, and payment for, a specified quality and quantity of a commodity at a specified future date. The price may be agreed upon in advance, or determined by formula at the time of delivery or other point in time.

• Forward pricing – Agreeing on a price or a pricing formula for later delivery. "Forward pricing" is used broadly here to refer to both hedging with futures or options, and forward contracting.

• Futures contract – An agreement to later buy or sell a commodity of a standardized amount and quality during a specific month, under terms established by the futures exchange, at a price established in the trading pit at the commodity futures exchange.

• Grain-equivalent basis – Because data for grain, flour, and selected grain products are reported in different measures (for example, metric tons for grain exports and kilograms for flour), it is often necessary to convert these to a common measure for total use calculations or comparison purposes.

• Gross Cash Farm Income (GCFI) – Gross cash farm income (GCFI) is annual income before expenses and includes cash receipts, farm-related income, and Government farm program payments.

• Groundwater – Groundwater is the water present beneath Earth's surface in soil pore spaces and in the fractures of rock formations. A unit of rock or an unconsolidated deposit is called an aquifer when it can yield a usable quantity of water.

• Handler – Any person engaged in the business of handling agricultural products, including producers who handle crops or livestock of their own production, except such term shall not include final retailers of agricultural products that do not process agricultural products.

• Hedging – The initiation of a buying or selling position in a futures or options market, intended as a temporary substitute for the later actual sale or purchase of a commodity. Hedging aims to protect against adverse price movements prior to the actual transaction.

• Hundredweight – One hundred pounds

• Landings – Quantities of fish, shellfish, and other aquatic plants and animals brought ashore and sold. Commercial landings of fish may be in terms of round (live) weight or dressed weight. Landings of crustaceans are generally on a live-weight basis except for shrimp, which may be on a heads-on or heads-off basis. Mollusks are generally landed with the shell on, but for some species only the meats are landed, such as sea scallops. Data for all mollusks are published on a meat-weight basis.

• Live-weight – The weight of an animal before it is slaughtered.

• Manufacturers’ Sales Branches and Offices (MBSO) – is a farming management concept based on observing, measuring and responding to inter and intra-field variability in crops. The goal of precision agriculture research is to define a decision support system (DSS) for whole farm management with the goal of optimizing returns on inputs while preserving resources. See also: Satellite farming and Site-specific crop management (SSCM)

• Marketing contract – A contract between a processor or handler and a grower, establishing a marketing outlet and a price (or a formula for determining the price) for a commodity before harvest or before the commodity is ready to be marketed.

• Marketing year – The 12-month period following harvest during which a commodity may be sold domestically, exported, or put into reserve stocks. The year varies by country and commodity.

• Measurement ton – A measure of volume generally equal to 40 cubic feet (1 cubic meter). Also known as cargo or freight ton.

• Metric ton – A measure of weight equal to 2,204.6 pounds, or 1,000 kilograms. See also Long Ton or Short Ton.

77

GLOSSARY (4/5)

• Net Cash Farm Income (NCFI) – the return (both monetary and non-monetary) to farm operators for their labor, management and capital, after all production expenses have been paid (that is, gross farm income minus production expenses). It includes net income from farm production as well as net income attributed to the rental value of farm dwellings, the value of commodities consumed on the farm, depreciation, and inventory changes; NCFI is not a comprehensive measure of profitability, however, because it does not account for changes in non cash income, including adjustments in farm inventory, accounts payable, accounts receivable, the imputed rental value of operator dwellings, and capital consumption.

• Noninsured Crop Disaster Assistance Program (NAP) – NAP provides financial assistance to producers of many commodities for which crop insurance is not available in the event of qualifying yield loss.

• Organic Production – A production system that is managed in accordance with the Act and regulations in this part to respond to site-specific conditions by integrating cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity

• Organic System Plan – A plan of management of an organic production or handling operation that has been agreed to by the producer or handler and the certifying agent and that includes written plans concerning all aspects of agricultural production or handling described in the Act and the regulations in subpart C of the Organic Foods Production Act.

• Ounce equivalent (oz eq.) – A comparable amount of various foods used as a standard of comparison within the grain food group and meat and beans food group.

• Pasture – Land used for livestock grazing that is managed to provide feed value and maintain or improve soil, water, and vegetative resources.

• Permanent Crops – Permanent crops are produced from plants which last for many seasons, rather than being replanted after each harvest. Traditionally, "arable land" included any land suitable for the growing of crops, even if it was actually being used for the production of permanent crops such as grapes or peaches.

• Processing – The transformation of agricultural products into food, or of one form of food into other forms

• Producer – A person who engages in the business of growing or producing food, fiber, feed, and other agricultural-based consumer products.

• Production contract – An agreement between a processor and a grower that usually specifies in detail the production inputs supplied by the processor and the grower, the quality and quantity of a particular commodity that is to be delivered, and compensation that is to be paid to the grower. In return for relinquishing control over decision making, the producer is often compensated with a price premium or lower market risk.

• Retailer – Businesses that sell food to consumers for preparation at home. Businesses can range from big box retailers (e.g., Costco, Walmart), through supermarkets/grocery stores, down to convenience stores or specialty food stores (e.g., butcher shop).

• Row crops – A row crop is a crop that can be planted in rows wide enough to allow it to be tilled or otherwise cultivated by agricultural machinery, machinery tailored for the seasonal activities of row crops. Such crops are sown by drilling rather than broadcasting.

• Schedule F – IRS tax form titled “Profit or Loss from Farming" to report an agricultural business’s net profit or loss for the tax year. Livestock, dairy, poultry, fish and fruit farmers as well as owner/operators of plantations, ranches, ranges, nurseries or orchards are considered farmers for the purposes of Schedule F. Farming profit or loss is then transferred to a form 1040 for computing your total tax liability.

• Short Ton – A row crop is a crop that can be planted in rows wide enough to allow it to be tilled or otherwise cultivated by agricultural machinery, machinery tailored for the seasonal activities of row crops. Such crops are sown by drilling rather than broadcasting.

• Specialty crops – Specialty crops are defined in law as “fruits and vegetables, tree nuts, dried fruits and horticulture and nursery crops, including floriculture.” This definition, although more exact than previous legal definitions, leaves a certain amount of latitude in interpretation. Fruits, vegetables, tree nuts, nursery crops and floricultural crops are all considered to be horticultural crops. Regardless, the specific mention of these crop groups means that plants so classified automatically qualify as specialty crops. Where interpretation is needed is in which plants, not specifically mentioned in legislation, can be classified as horticulture crops.

• Surface Water – Surface water is water located on top of the Earth's surface such as rivers, creeks, and wetlands.

• Tertiary Food Processing – Tertiary food processing is the commercial production of what is commonly called processed food. These are ready-to-eat or heat-and-serve foods, such as TV dinners and re-heated airline meals.

• Ton – A measure of weight equal to 2,000 pounds, or 907 kilograms. Also called short ton. See also Long Ton and Metric Ton. A "ton" is also a measure of volume (see Measurement Ton). Ton is the standard unit of measurement in this data series.

• Total Gross Income – Total gross income includes gross cash income, non-money income and value of inventory adjustments

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GLOSSARY (5/5)

• Wild Crop – Any plant or portion of a plant that is collected or harvested from a site that is not maintained under cultivation or other agricultural management.

• Winery – A building or property that produces wine, or a business involved in the production of wine, such as a wine company. Some wine companies own many wineries. Besides wine making equipment, larger wineries may also feature warehouses, bottling lines, laboratories, and large expanses of tanks known as tank farms. Wineries do not have to be located adjacent to vineyards; grapes can be shipped anywhere.

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This report was prepared by GCA Advisors, LLC, a registered broker-dealer and member of FINRA and SIPC. Sources of data include Capital IQ and other news organizations. Information obtained from third-party sources is considered reliable, but we do not guarantee that the information herein is accurate and complete. The report shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities mentioned herein; past performance does not guarantee future results. Recipients of this report should not interpret the information herein as sufficient grounds for an investment decision or any other decision.

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