healthy lifestyle and craft beer quarterly...

Market Analysis Spring 2015

Healthy Lifestyle and Craft Beer Quarterly Report

Non-Durables Fitness/Weight Management • Natural, Organic & Functional Food & Beverage • Fitness Centers • Natural Living (Beauty, Household & Pet) • Weight Management • Supplements Wholesalers • Supplements Direct-to-Consumer • Health & Wellness Retailers/Distributors

Craft Products • Craft Beer & Hard Cider

Kurt M. Roth Owen L. Hart David M. Silver Satoshi Matsumoto Managing Director Managing Director Managing Director Managing Director +1.312.609.4689 +1.415.627.3273 Head of European Director of Japan M&A [email protected] [email protected] Investment Banking +1.312.609.5446 +44.207.667.8216 [email protected] [email protected]

Table of Contents Page

Please refer to Appendix – Disclaimers and Other Disclosures on page 25.

• Robert W. Baird & Co. Healthy Lifestyle and Craft Beer Practice ........................ 1

• Healthy Lifestyle and Craft Beer Stock Activity .................................................. 2

• Quarterly Transaction Update ............................................................................ 4

• Addressable Markets .......................................................................................... 8

• Public Company Performance ........................................................................... 14

• Same-Store Sales Performance ........................................................................ 20

• Equity Capital Markets Overview ...................................................................... 21

• Recently Priced IPOs ........................................................................................ 22

• Baird’s Healthy Lifestyle and Craft Beer Transaction Experience ...................... 23

• Global Investment Banking Contact List ........................................................... 24

The following report has been prepared by the Global Investment Banking Department of Robert W. Baird & Co. This report is an overview and analysis of industry and consolidation trends and is not intended to provide investment recommendations on any specific industry or company. A complete listing of all companies covered by Baird U.S. Equity Research and applicable research disclosures can be accessed at <http://www.rwbaird.com/researchdisclosure>. You can also call 1-800-792-2473 or write: Robert W. Baird, Equity Research, 24th Floor, 777 E. Wisconsin Avenue, Milwaukee, WI 53202.

Robert W. Baird & Co. (“Baird”) is a leading middle market focused investment bank serving the M&A and equity financing needs of our clients throughout the U.S., Europe and Asia. Since 2008, we have advised on 404 M&A transactions totaling $89 billion and have served as an underwriter on 547 equity offerings totaling more than $172 billion in raised capital. Baird’s balanced buy- and sell-side practice provides expertise for public and private companies, while our dedicated financial sponsor coverage further expands opportunities and financing resources for our clients. Through close coordination between our U.S., European and Asian bankers, we work to optimize opportunities and results for clients in the international marketplace. Approximately one-third of our M&A activity over the past five years has involved international transactions.

Robert W. Baird & Co. Healthy Lifestyle and Craft Beer Practice

Robert W. Baird & Co. 1

AN EXPERIENCED, PROVEN AND TRUSTED ADVISOR Baird’s Global Investment Banking team possesses highly relevant industry expertise and significant transaction experience in the Healthy Lifestyle sector. • We have in-depth advisory and equity origination capabilities in the Healthy Lifestyle space:

– Multiple high-profile assignments over the last decade – Unique knowledge of consumer growth investors – Expert insight into current “hot button” issues

• Deep industry knowledge and proprietary transaction and benchmarking database • Established relationships with, and access to, key industry and client decision makers • Significant senior resources dedicated to industry and execution • Focus on long-term partnerships and senior level attention

Baird Healthy Lifestyle Practice Contacts

Kurt M. Roth Managing Director +1.312.609.4689 [email protected]

Owen L. Hart Managing Director +1.415.627.3273 [email protected]

David M. Silver Managing Director Head of European Investment Banking +44.207.667.8216 [email protected]

Satoshi Matsumoto Managing Director +1.312.609.5446 [email protected]

Baird is One of the Most Active Advisors and Underwriters to the Consumer Sector

Baird’s Consumer investment banking team has a proven track record of delivering outstanding results for our clients. We offer comprehensive strategic advisory and capital market services across several consumer sectors. Our transaction experience, frequent dialogue with industry participants and robust deal flow provide us with unique insight into the sectors we serve.

• Since the start of 2010, completed 111 consumer M&A and public equity transactions worth $28 billion

• Market maker in over 500 Consumer stocks • 5 Consumer focused research analysts covering 82

companies

Middle-Market Deal Award Nine consecutive years 2005 - 2013

“Most Trusted” Research Eleven consecutive years 2004 - 2014(1)

Adviser of the Year Awards 2008 - 2011

“Wisconsin Specialty Protein sale to Omega Protein” Nutrition Business Journal’s Top Deal of the Year January 2014

_____________________ (1) Baird ranked No.1 for “Most Trusted” Research for the eleventh consecutive year in the 2014 Greenwich Associates Surveys (2004 - 2014). Surveys conducted with U.S.

small-cap and mid-cap fund managers.

Healthy Lifestyle and Craft Beer Stock Activity


Rising Valuations Supportive of Increased Transaction Activity

LTM Stock Performance

90%

95%

100%

105%

110%

115%

120%

Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15

HLCB S&P 500

10.4%12.3%

_____________________ Source: Capital IQ. LTM as of March 31, 2015. See footnote at bottom of page for list of companies that comprise Healthy Lifestyle and Craft Beer (HLCB) index.

Recent Stock Performance

Index 1-Month %

Change 3-Month %

Change 6-Month %

Change 1-Year % Change

S&P 500 (1.7%) 0.4% 4.8% 10.4%

Healthy Lifestyle and Craft Beer 2.9% 4.6% 10.8% 12.3%

Natural, Organic & Functional Food & Beverage 1.3% 12.6% 15.2% 28.4%

Supplements Wholesalers 16.1% 4.1% (1.2%) (9.8%)

Supplements Direct-to-Consumer 6.4% (2.6%) 5.2% (17.8%)

Health & Wellness Retailers/Distributors 0.1% 0.6% 24.9% 1.8%

Craft Products 3.9% (3.4%) 7.4% (0.7%)

Fitness Centers 2.9% 9.4% 14.3% 23.6%

Weight Management (3.1%) (26.3%) (22.6%) (10.1%)

Recent Healthy Lifestyle and Craft Beer IPOs 2.9% 8.4% 22.9% 7.5% _____________________ Source: Capital IQ. LTM as of March 31, 2015. Natural, Organic & Functional Food & Beverage index consists of BDBD, FRPT, HAIN, TSE:2220, LWAY, MJN, MNST, SET:ICHI, TSX:SOY and WWAV. VMS Wholesalers index consists of ENXTAM:DSM, NUTR, OME and PRGO. VMS Direct-to-Consumer index consists of HLF, LFVN, NATR, NUS, RELV and USNA. Health & Wellness Retailers/Distributors index consists of TFM, GNC, NGVC, SFM, UNFI, VSI and WFM. Craft Products index consists of BREW and SAM. Fitness Centers index consists of ASX:AAD, TSE:4801, BMV:SPORT S, LTM, BSE:533200 and CLUB. Weight Management index consists of MED, NTRI and WTW. Healthy Lifestyle and Craft Beer index consists of all companies listed directly above. Recent Healthy Lifestyle and Craft Beer IPOs index consists of SFM, WWAV, NGVC, FRPT, GNC and TFM.

Healthy Lifestyle and Craft Beer Stock Activity


Recent Valuations

Index

Median Multiple

LTM Revenue LTM EBITDA 2015 P/E

Healthy Lifestyle and Craft Beer 1.4x 11.5x 21.5x

Natural, Organic & Functional Food & Beverage 3.0x 19.3x 31.8x

Supplements Wholesalers 1.1x 7.7x 16.1x

Supplements Direct-to-Consumer 0.8x 8.4x 15.3x

Health & Wellness Retailers/Distributors 1.2x 13.4x 24.4x

Craft Products 2.6x 19.1x 35.2x

Fitness Centers 2.0x 10.2x 19.1x

Weight Management 1.4x 7.3x 16.3x

Recent Healthy Lifestyle and Craft Beer IPOs 2.0x 14.9x 40.1x

_____________________ Source: Capital IQ. Figures as of March 31, 2015. See “Recent Stock Performance” table on page 2 for list of companies that comprise each index.

Top 10 Stock Price Gainers in Q1 2015

40.4% 38.7%

29.5% 28.7% 27.7% 26.7% 25.3% 23.4% 22.8% 15.4%

0%

10%

20%

30%

40%

50%

HL Corp(Shenzhen)

Nu SkinEnterprises

Inc.

Omega ProteinCorporation

TalwalkarsBetter Value

Fitness Limited

MonsterBeverage

Corporation

TheWhiteWave

FoodsCompany

Life TimeFitness, Inc.

JohnsonHealth Tech

Co., Ltd.

Central SportsCo.,Ltd.

Lifeway FoodsInc.

Top 10 Stock Price Losers in Q1 2015

(71.9% )

(39.2% )(28.5% )

(15.3% ) (15.2% ) (13.8% ) (10.8% ) (10.8% ) (10.7% ) (8.9% )

(80%)(70%)(60%)(50%)(40%)(30%)(20%)(10%)

0%

WeightWatchers

International,Inc.

LifevantageCorporation

Ardent LeisureGroup

Grupo SportsWorld, S.A.B.

de C.V.

VitaminShoppe, Inc.

BoulderBrands, Inc.

SunOpta Inc. Nature'sSunshine

Products Inc.

Medifast Inc. KoninklijkeDSM N.V.

_____________________ Source: Capital IQ. YTD as of March 31, 2015.

Quarterly Transaction Update


Pages 4-6 list M&A transactions, private placements and equity offerings announced during Q1 2015 for categories within the scope of this report. The Healthy Lifestyle and Craft Beer sectors registered significant levels of M&A activity on a global basis in the first quarter. We have identified 34 change-of-control M&A transactions announced during the quarter; this level was slightly below the quarterly average of 37 over the past two years.

Global Healthy Lifestyle M&A Activity by Quarter

29

48

36 34 3732

4534

0

10

20

30

40

50

60

Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15

Deal Count Average Deal Count

Average = 37

_____________________

Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis. Includes deals in the following segments: Natural, Organic & Functional Food and Beverages; Natural Living products; VMS Wholesalers and Direct-to-Consumer platforms; Health & Wellness Specialty Retailers and Distributors; Craft Beer & Hard Cider; Weight Management; and Fitness Centers

Global Healthy Lifestyle and Craft Beer M&A Activity in Q1

Date Announced

Target Name / Nationality

Target

Acquiror

Deal Value ($mil) Commentary Segment Description

30-Mar-15 Total Fitness / U.K. Fitness Centers Operator of health clubs

Northedge Capital Partners; RooGreen Ventures; Company Management

- Private equity firms Northedge and RooGreen joined the executive management of Total Fitness in acquiring the business, which has 17 locations in northern England

30-Mar-15 Angel's Share Brands / U.S. Craft Products Maker of bourbon whiskey

Bacardi - The acquisition allows Bacardi to expand in the super-premium spirits segment by entering the bourbon category of the North American whiskey sector

29-Mar-15 Perrin Brewing / U.S. Craft Products Brewer of beer Oskar Blues Brewery - The acquisition by Fireman Capital-backed Oskar Blues, whose products are distributed in 42 states, will help Michigan-based Perrin build its geographic presence

25-Mar-15 Club Pilates / U.S. Fitness Centers Operator and franchisor of Pilates clubs

LAG Fit - LAG Fit, a firm specializing in acquiring and expanding wellness concepts, acquired 35-studio chain Club Pilates

16-Mar-15 MonaVie / U.S. Supplements Direct-to-Consumer

Maker of nutritional products

Jeunesse Global - Following the acquisition, Jeunesse, a healthy living oriented direct selling company, has a network of 4 million distributors in over 100 countries

16-Mar-15 Life Time Fitness / U.S. Fitness Centers Operator of fitness clubs

Leonard Green & Partners; TPG Capital; LNK Partners

4,071.8 The pending deal’s share price represents a 73% premium to the closing price on August 22, 2014, when Life Time announced it was considering strategic options

11-Mar-15 My Goodness / U.K. Supplements Wholesale

Producer of sports nutrition and protein drinks/snacks

Aurivo Co-operative Society Limited

- The deal provides Ireland-based Aurivo a significant position in the expanding sports nutrition and protein drinks/snacks market in the U.K. and Ireland

9-Mar-15 Brand Aromatics / U.S. Natural, Organic & Functional

Maker of marinades and broths

McCormick & Company 63.0 Brand Aromatics, with $28 million in 2014 sales, enhances the breadth of value-added products in McCormick’s offering for packaged food companies and restaurants

9-Mar-15 Natural American Pet Products and Natural Life Pet Products / U.S.

Natural Living Producer of pet foods Arthur Dogswell - The acquisition brings vertical integration in the premium pet treat space to natural pet food producer Arthur Dogswell

9-Mar-15 Full Sail Brewing / U.S. Craft Products Brewer of beer

Encore Consumer Capital; Oregon Craft Brewers

- Encore Consumer Capital acquired employee owned Full Sail, which brewed 115,000 barrels in 2014, through its newly formed investment group Oregon Craft Brewers

5-Mar-15 Ritual Wellness / U.S. Natural, Organic & Functional

Producer of organic juices

Project Juice - The combined company seeks to source from more farms due to its enhanced scale

__________________ Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis.



Global Healthy Lifestyle and Craft Beer M&A Activity in Q1 (continued)

Date Announced


Target

Acquiror

Deal Value ($mil) Commentary Segment Description

4-Mar-15 Empire Kosher Poultry (remaining 80% stake) / U.S.

Natural, Organic & Functional

Producer of kosher poultry products

The Hain Celestial Group

57.6 Empire Kosher, with $100+ million in 2014 sales, expands Hain’s farm to table offerings

2-Mar-15 Citrusource / U.S. Natural, Organic & Functional

Supplier of orange juice and citrus products

SunOpta Grains and Foods

13.3 The deal is aligned with SunOpta’s strategy to grow its healthy beverages portfolio

28-Feb-15 Two Virgin Active Gyms in Glamorgan and Middleton / U.K.

Fitness Centers Operator of two fitness centers

LaSalle Investment Management

13.9 LaSalle acquired the two Virgin Active fitness centers to capitalize on the growing interest in health and fitness in the U.K.

20-Feb-15 Belvedere International / Canada

Natural Living Producer of health and beauty care products

The Hain Celestial Group

- Hain established a personal care base in Canada with the acquisition of Belvedere, whose Live Clean brand of natural products fueled annual sales of $25 million

17-Feb-15 Healthy Food Ingredients / U.S.


Supplier of organic food ingredients

Hesco - Specialty grain producer Hesco acquired Healthy Food Ingredients in order to expand into specialty ingredients for organic foods

16-Feb-15 Enjoy Life Foods / U.S. Natural, Organic & Functional

Producer of allergen free snacks

Mondelez International - Enjoy Life Foods fits the strategy of Mondelez to drive growth in snacking by expanding its portfolio through allergy-friendly 'free from' offerings

11-Feb-15 JackedPack / U.S. Supplements Direct-to-Consumer

Online retailer of health supplements

IdeoClick - E-commerce company IdeoClick acquired JackedPack, a provider of nutrition supplement samples, to expand its presence in nutrition supplements

9-Feb-15 Nutricap Labs / U.S. Supplements Wholesale

Manufacturer of nutraceuticals

Twinlab Consolidated Holdings, Inc.

12.0 The acquisition is designed to provide more product options and services for the customers of Nutricap and Twinlab

9-Feb-15 Native Remedies Inc., Certain Assets / U.S.

Supplements Direct-to-Consumer

Marketer of herbal supplements

Silver Star Brands (Blyth, Inc.)

- The acquisition complements the direct-to-consumer portfolio of Silver Star and enhances its e-commerce market share

4-Feb-15 Yellow Chips BV (51%) / Netherlands


Producer of vegetable and organic chips

Diamond Foods - Yellow Chips allows Diamond Foods to compete more effectively in the high-growth vegetable chip category in Europe

30-Jan-15 Eos Fitness Holdings / U.S. Fitness Centers Operator of a chain of fitness centers

Bruckmann, Rosser, Sherrill; Performance Equity Management; Stellus Capital

- Eos Fitness, a chain of 16 clubs in the southwest U.S., was acquired by a private equity group that includes BRS, which brings fitness center expertise through prior ownership of Town Sports International

29-Jan-15 Krave Pure Foods / U.S. Natural, Organic & Functional

Producer of meat-based snack items

The Hershey Company - The acquisition will help Hershey enter the all-natural meat snacks market and expand in the broader snacks space. Krave has trailing full-year sales of about $35 million

27-Jan-15 17 Planet Fitness locations in New York / U.S.

Fitness Centers Operator of fitness clubs Exaltare Capital Partners; Brightwood Capital Advisors

- Private equity firms Exaltare and Brightwood acquired 17 Planet Fitness sites in New York from a franchisee, bringing their ownership of Planet Fitness locations to 52 franchises

23-Jan-15 Elysian Brewing Company / U.S.

Craft Products Brewer of beer Anheuser-Busch InBev - The proposed acquisition fits the strategy of AB InBev, which has acquired two other craft brewers since the start of 2014

20-Jan-15 Salix Animal Health / U.S. Natural Living Producer and distributor of dog chews, treats and snacks

Spectrum Brands Holdings

- With annual revenue of about $100 million, Salix enables Spectrum’s pet supplies unit to expand its dog treats business, leverage Salix’s enzyme technology and seek new opportunities in Europe and Latin America

16-Jan-15 Planter's S.p.A. / Italy Natural Living Maker of herbal products and natural cosmetics

Investor group - Italy-based private equity firm DGPA SGR sold Planter’s to an unspecified investor group

14-Jan-15 XS Energy / U.S. Natural, Organic & Functional

Producer of sugar-free energy drinks

Amway - Amway, the exclusive distributor of XS Energy since 2003, will expand the brand’s geographic reach, including in Southeast Asia. XS Energy is distributed in 38 countries with annual sales of $150 million

9-Jan-15 Nutritional Laboratories International / U.S.

Supplements Wholesale

Producer of nutritional and dietary supplements

Elite One Source Nutrisciences

- Elite One Source, majority-owned by Ampersand Capital Partners, acquired NLI from Praesidian Capital as part of its strategy to become the leading contract maker of nutritional and dietary supplements

8-Jan-15 Freedom Fitness Milton Keynes / U.K.

Fitness Centers Operator of a fitness club in Warwick, U.K.

Wealden Leisure - U.K.-based Wealden Leisure, which operates 30+ Freedom Leisure fitness centers, added to its U.K. portfolio with this acquisition

5-Jan-15 Sun Orchard (majority stake) / U.S.


Provider of fruit juices and beverage products

Centre Partners Management

- Sun Orchard brings a premium juice platform to Centre Partners, which intends to fuel growth through new product lines and channels plus select acquisitions

__________________ Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis.



Global Healthy Lifestyle and Craft Beer Private Placements in Q1

Date Announced


Target Investment Amount ($mil) Type Investor(s) Use of Proceeds Segment Description

27-Mar-15 The Pulse Beverage Company / U.S.


Producer of healthy beverages

$1.0 Equity Private investors Expand its operations into Mexico and Canada, and support working capital growth

23-Mar-15 Smari Organics / U.S. Natural, Organic & Functional

Maker of organic Icelandic yogurt

3.8 Equity Private investors Working capital

19-Mar-15 Fireman's Brew / U.S. Craft Products Producer of beer and coffee

5.0 Equity Private investors -

16-Mar-15 Five Star Organics / U.S. Natural, Organic & Functional

Maker of organic candy bars


12-Mar-15 Camden Town Brewery / U.K.

Craft Products Brewer of beer 2.7 Equity Private investors Fund growth and return manufacturing to the U.K.

11-Mar-15 Nature Cell / U.S. Natural, Organic & Functional

Producer of health drinks and organic foods

2.0 Debt Private investors Operations

10-Mar-15 Windy Hill Spirits / U.S. Craft Products Maker of whiskeys 5.0 Debt Private investors -

6-Mar-15 Payette Brewing Company / U.S.

Craft Products Brewer of beer 1.3 Equity Private investors -

2-Mar-15 Bhakti Chai / U.S. Natural, Organic & Functional

Provider of ready-to-drink and bottled tea and coffee products

4.9 Equity Colorado Impact Fund and private investors

Manufacturing facility in Colorado, sales and marketing, and national distribution

27-Feb-15 Columbia Phyto Technology / U.S.

Supplements Wholesale

Producer of organic and conventional powders

1.5 Debt Private investors -

20-Feb-15 True Drinks Holdings / U.S. Natural, Organic & Functional


4.3 Equity Toba Capital Working capital

12-Feb-15 BAI Brands / U.S. Natural, Organic & Functional


15.0 Equity Private investors Working capital

9-Feb-15 Pangea Naturals / U.S. Natural Living Maker of skincare products


6-Feb-15 Biena / U.S. Natural, Organic & Functional

Maker of chickpea snacks


1-Feb-15 Wisconsin Brewing Co / U.S. Craft Products Brewer of beer 2.0 Equity Private investors Working capital and capex

29-Jan-15 Bowen Hayward Group / U.S.

Craft Products Brewer of beer 1.2 Debt & Equity

Private investors -

29-Jan-15 Westbourne / U.S. Natural, Organic & Functional

Producer of organic popcorn


22-Jan-15 Synergy Strips Corp. / U.S. Supplements Wholesale

Producer of orally dissolving film strips

6.0 Debt & Equity

Knight Therapeutics

Acquisition of the Focus Factor business

20-Jan-15 American Botanicals / U.S. Supplements Wholesale

Processor of herbs, roots and barks

2.7 Equity

Advantage Capital Partners

Fund growth

20-Jan-15 KonaRed / U.S. Natural, Organic & Functional

Maker of beverages and nutritional products

1.0 Debt Group 10 Holdings -

14-Jan-15 New Oberpfalz Brewing / U.S.

Craft Products Brewer of beer 1.0 Equity Private investors Pay executives

12-Jan-15 Wright Leisure Limited / U.K. Fitness Centers Operator of a chain of gyms

7.6 Equity Business Growth Fund plc

Fund growth

8-Jan-15 Sonoma Beverage Works / U.S.

Craft Products Maker of flavored ciders

1.2 Equity/ Debt

Private investors -

7-Jan-15 Soylent / U.S. Weight Management

Maker of food replacement products

20.0 Equity Andreessen Horowitz; Index Ventures; Lerer Hippeau Ventures

Expand manufacturing, shipping, product development, biotechnology research and resource procurement

Global Healthy Lifestyle and Craft Beer Equity Offerings in Q1

Offer Date Issuer Name /

Nationality

Issuer

Offering Type Gross Offering Amount ($mil) Use of Proceeds Segment Description

4-Mar-15 Sprouts Farmers Market / U.S.

Health & Wellness Retail

Retailer of fresh, natural and organic food

Follow-on 559.4 -

15-Feb-15 By-health Co. / China Supplements Wholesale

Maker of nutritional supplements

Follow-on 298.9 General corporate purposes and working capital

_____________________ Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis.



Selected LTM Healthy Lifestyle and Craft Beer M&A Activity

Date Announced Target Target Nationality Target Description Acquiror

Deal Value ($mil)

EV / LTM

Revenue EBITDA

16-Mar-15 Life Time Fitness United States Operator of fitness clubs Leonard Green & Partners; TPG Capital; LNK Partners

$4,071.8 3.2x 10.9x

5-Dec-14 McCleskey Mills United States Provider of shelled peanuts and seed peanuts

Olam International 176.0 - 6.0

21-Nov-14 TIPNESS Japan Operator of fitness clubs Nippon Television Holdings 203.0 0.7 -

26-Oct-14 Chiquita Brands International

United States Processor of produce Banco Safra S.A. and Sucocitrico Cutrale

1,321.7 0.4 12.6

15-Oct-14 Penford United States Maker of natural ingredient systems Ingredion 338.5 0.8 12.4

9-Oct-14 New Britain Palm Oil Papua New Guinea Producer of palm oil Sime Darby Plantation 2,010.8 3.4 12.6

24-Sep-14 Green Eagle Holdings Singapore Producer of palm oil PT. BW Plantation, Tbk 880.9 6.1 -

17-Sep-14 So Delicious Dairy Free United States Producer of dairy-free frozen desserts

The WhiteWave Foods Company

195.0 1.7 -

12-Sep-14 Isopure United States Producer of protein powder and drinks

Glanbia 153.0 2.1 -

8-Sep-14 Annie's United States Maker of natural and organic food products

General Mills 823.0 4.0 38.6

7-Jul-14 WILD Flavors Switzerland Maker of natural ingredients, flavors and colors

Archer Daniels Midland 3,096.5 2.3 -

4-Jul-14 Apple & Eve United States Branded juice manufacturer Lassonde Industries 147.9 - 9.7

2-Jul-14 Vitacost.com United States Online retailer of health and wellness products

The Kroger Co. 281.2 0.6 -

30-Jun-14 Flagstone Foods United States Producer of snacks and dried fruits TreeHouse Foods 875.0 1.2 16.1

11-Jun-14 Healthy Directions, LLC United States Maker of nutritional supplements Helen of Troy 195.0 1.3 8.0 14-Apr-14 DIANA S.A.S. France Nutritional and natural-ingredients

foods producer Symrise AG 1,796.2 2.9 14.0

10-Apr-14 Deoleo SA Spain Producer of olive oil, vinegars, sauces and olives

CVC Capital Partners 1,258.1 1.2 12.5

Mean 2.0x 14.0x Median 1.5x 12.5x

_____________________ Source: Capital IQ, Dealogic and Robert W. Baird & Co. analysis. List includes deals with reported values of at least $100 million and a disclosed valuation multiple.

Addressable Markets


Natural, Organic & Functional Food & Beverage Market

The Natural, Organic & Functional food and beverage market includes food and beverages classified as natural, organic or functional by the Nutrition Business Journal. Natural foods and beverages typically focus on the health benefits derived from natural ingredients. Organic food and beverages generally are produced without chemicals, pesticides, herbicides, hormones, antibiotics or genetically modified feed crops. Functional foods and beverages are designed to provide health benefits via the inclusion or combination of certain ingredients.

The U.S. market for Natural, Organic and Functional food and beverage items increased to approximately $104 billion in 2013 from approximately $95 billion in 2012, representing growth of nearly 10% versus an increase of around 3% for the entire food and beverage market. Natural, Organic and Functional food and beverage sales accounted for 14% of total U.S. food sales in 2013, up from just over 11% in 2008.

U.S. Natural, Organic & Functional Retail Sales

$66.7 $72.0 $74.8 $79.6 $86.6 $94.8 $103.9$114.0 $124.7

$136.2$148.3

$161.2$174.8

0%

2%

4%

6%

8%

10%

$0$25$50$75

$100$125$150$175

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

2007-2013 CAGR: 7.7% 2013-2019 CAGR: 9.1%

$in b

illio

nsYear-over-year growth

_____________________ Source: Nutrition Business Journal, Sterling-Rice Group.

Breakdown of 2013 Sector Sales by Category and Channel Natural Sales by Category Organic Sales by Category Functional Category Sales by Category

Dairy14%

Fruit & Vegetables

11%

Breads & Grains15%

Meat, Fish & Poultry

10%Beverages

23%

Snack Foods8%

Packaged & Prepared

Foods15%

Condiments4%

Dairy16%

Fruit & Vegetables

39%Breads &

Grains10%

Meat, Fish, & Poultry

3%

Beverages11%

Snack Foods5%

Packaged & Prepared

Foods12%

Condiments4%

Dairy5% Breads &

Grains13%

Beverages65%

Snack Foods8%

Packaged & Prepared

Foods8%

Other1%

Natural Sales by Channel Organic Sales by Channel Functional Sales by Channel

Retail - Health & Wellness

32%

Internet 2%Retail - Mass

63%

Other 3%

Retail - Health & Wellness,

44%

Internet, 3%

Retail - Mass, 46%

Other, 6%


10% Internet1%

Retail - Mass88%

Other1%


Addressable Markets


Supplements Market

The supplements market includes vitamins, minerals, herbs & botanicals, specialty supplements, meal replacements and sports nutrition products. After an extended period of impressive growth, the U.S. supplements market generated retail sales of nearly $35 billion in 2013.

U.S. Supplements Retail Sales

$23.8 $25.5 $27.0$28.2 $30.1 $32.5 $34.9 $37.4

$39.9 $42.7 $45.6 $48.7$52.0

0%

2%

4%

6%

8%

$0

$10

$20

$30

$40

$50

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

2007-2013 CAGR: 6.6% 2013-2019 CAGR: 6.9%

$in b

illio



Breakdown of 2013 Sector Sales by Category and Channel Sales by Category Sales by Channel

Specialty & Other19%

Vitamins32%

Herbs & Botanicals

17%

Sports Nutrition

13%

Minerals7%

Meal Replacements

12%


36%

Internet6%Retail - Mass

28%

Other30%


Addressable Markets


Natural Living Products Market

The natural living products market includes personal care, household and pet products classified as natural by the Nutrition Business Journal. Natural living products focus on the health benefits derived from natural ingredients.

The U.S. natural living products market increased to $18.6 billion in 2013 from $16.9 billion in 2012, representing expansion of 10%, far outpacing growth for conventional products in the personal care, household and pet segments. High single-digit annual growth is projected for this market over the next several years.

U.S. Natural Living Product Sales

$12.9 $13.4 $14.2 $15.2 $16.9 $18.6 $20.5 $22.4 $24.4 $26.6 $28.8$31.2

0%

3%

6%

9%

12%

15%

0

10

20

30

40

2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E

2007-2013 CAGR: 8.3% 2013-2019 CAGR: 9.0%

Reve

nue (

$ in b

illio

ns) Year-over-year growth


Breakdown of 2013 Sector Sales by Category and Channel Personal Care Sales by Category Household Sales by Category Pet Sales by Category

Skincare39%

Hair Products25%

Bath and Toilet Soap

13%

Aroma and Fragrances

5%

Deodorants3%

Oral Hygiene4%

Cosmetics6%

Other5%

Total Organic Fiber (Linens and Clothing)

28%

Natural and Organic

Household Cleaners

22%

Natural and Organic Pet

Food48%

Organic Flowers

2%

Pet Supplements

45%

Natural and Organic Food

45%

Supplies and Other10%

Personal Care Sales by Channel Household Sales by Channel

MM and Beauty Supply

Discounters 21%

Other Direct and

Multichannel NPC Brands

13%

Network Marketing 18%

Natural and Specialty

Retail 30%

Other 18%

Natural and Specialty

Retail, 30%

MM and Beauty Supply Discounters,

45%

Department Store,

Boutique, Salon, and Spa, 13%

Other, 13%


Addressable Markets


Craft Beer Market

The U.S. craft beer market increased to $14.2 billion in 2013 from $11.9 billion in 2012, representing expansion of 19%, well above the overall growth of the beer market. Craft beer is expected to represent about 20% of market volume by 2020, quadruple the market share of 2010.

U.S. Craft Beer Revenue and Production Growth

$9.0 $10.3 $11.9 $14.2$17.2 $19.3

$21.9$24.5

$27.9$30.9

0

20

40

60

0

10

20

30

40

2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E

2010-2013 CAGR: 16.4% 2014-2019 CAGR: 12.4%

Reve

nue (

$ in b

illio

ns)

Barrels(millions)

_____________________ Source: Historical and projected revenue figures provided by Mintel; reflects total U.S. sales (on- and off- premises). Barrel production figures apply constant 2013 revenue / barrel metric (per Brewers Association data) to annual revenue figures.

U.S. Craft Market Share (by Volume)

4.0%

8.0%

12.0%

16.0%

20.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Marke

t Sha

re

Actual Projected

_____________________ Actual market share figures provided by Brewers Association. Projections assume straight-line growth from 2014 to 2019 to reach anticipated ~20% share by volume.

Number of Breweries

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2013 2014

Numb

er of Br

eweries

ProhibitionEra

Industry Majors’ Rise to Dominance

Resurgence of Craft Brewing Popularity

_____________________ Source: Brewers Association.

Addressable Markets


Fitness Centers Market

The U.S. Fitness Centers market consists of about 30,000 membership-based exercise facilities. Fitness centers operate as parts of multi-site chains or as single-location entities. Following steady market growth in recent years, the Fitness Center market exceeds $22 billion in revenue, with aggregate membership of about 53 million.

U.S. Fitness Center Revenue

$18.5 $19.1 $19.5 $20.3 $21.4 $21.8 $22.4 $22.9 $23.6 $24.4 $25.1 $25.9 $26.4

0%

1%

2%

3%

4%

5%

6%

$0$3$6$9

$12$15$18$21$24$27

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

2007-2013 CAGR: 3.2% 2013-2019 CAGR: 2.8%

$in b

illio


_____________________ Source: IHRSA and IBISWorld industry reports. Revenue for 2007-2013 is based on IHRSA data. Estimates for 2013-2019 are based on IBISWorld growth projections.

U.S. Fitness Center Membership

46.7 45.6 45.3 50.2 51.4 51.3 52.9 54.1 54.8 56.0 56.9 58.2 58.8

(6%)

(3%)

0%

3%

6%

9%

12%

0

15

30

45

60

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

2007-2013 CAGR: 2.1% 2013-2019 CAGR: 1.8%

Mem

bers

in m

illio

ns Year- over-year growth

_____________________ Source: IHRSA and IBISWorld industry reports.

Participation Rate by Sport in U.S.

12%

13%

21%

36%

49%

61%

0% 10% 20% 30% 40% 50% 60% 70%

Water Sports

Racquet Sports

Team Sports

Individual Sports

Outdoor Sports

Fitness Sports

_____________________ Source: Physical Activity Council, 2014 Participation Report

Addressable Markets


Weight Management Market

The U.S. Weight Management market consists of a variety of products and services designed to promote weight loss and maintenance. For the purposes of this report, relevant market segments include weight loss centers, meal replacements, diet pills and drugs, weight loss surgeries and diet-related media (e.g., books, videos). The size of these segments of the U.S. Weight Management market is estimated at about $10 billion, with more than 100 million consumers undertaking dieting-related activities each year.

Sales for Selected U.S. Weight Management Market Segments

$10.4 $10.1 $10.2 $10.1

$0

$2

$4

$6

$8

$10

$12

2010 2011 2012 2013

$in b

illio

ns

_____________________ Source: Marketdata Enterprise.

Over the past several years, the size of the U.S. Weight Management market has been relatively unchanged. During the 2010-2013 period, weight loss centers and meal replacements became a larger share of consumer spending in this market, at the expense of share for surgery and diet-related media.

Wallet Share for Selected U.S. Weight Management Market Segments

Weight Loss Centers

31%

Meal Replacements

26%

Surgery31%

Diet Media12%

2010

Weight Loss Centers

33%

Meal Replacements

28%

Surgery28%

Diet Media11%

2013

_____________________ Source: Marketdata Enterprise.

Public Company Performance


Natural, Organic & Functional Food & Beverage

Kameda Seika

Valuation & Operating Statistics

($ in millions except per share data) 3/31/2015Last Twelve Month Results PE Ratio LTM Valuation Multiples

Price per % of 52- Enterprise Total Revenue Gross EBITDA EBIT TotalTicker Company Name Nationality Share Week High Value Revenue Growth Profit % Margin % Margin % 2015E 2016E Revenue EBITDA EBIT

NasdaqGS:BDBD Boulder Brands, Inc. United States $9.53 51.6% $858.7 $516.6 8.2% 37.0% 11.5% 7.5% 36.3 x 27.6 x 1.7 x 14.5 x 22.3 xFRPT Freshpet, Inc. United States 19.43 91.4% 614.1 86.8 26.4% 48.7% 0.0% (7.4% ) N/A 48.0 7.1 N/A N/ANasdaqGS:HAIN The Hain Celestial Group, Inc. United States 64.05 96.5% 7,254.9 2,468.9 21.4% 24.3% 11.9% 9.7% 31.8 28.4 2.9 24.6 30.3SET:ICHI ICHITAN GROUP Public Company Limi Thailand 0.65 87.2% 897.3 188.4 (3.9% ) 34.4% 25.8% 19.9% 21.7 17.7 4.8 18.4 24.0TSE:2220 Kameda Seika CO., Ltd. Japan 40.71 96.0% 887.6 794.2 (11.9% ) 43.3% 9.9% 4.8% 27.5 26.7 1.1 11.3 23.3NasdaqGM:LWAY Lifeway Foods Inc. United States 21.39 95.6% 352.4 119.0 16.3% 26.4% 6.5% 3.7% 38.9 32.9 3.0 45.9 N/ANYSE:MJN Mead Johnson Nutrition Company United States 100.53 95.3% 20,624.1 4,409.3 3.1% 61.4% 24.2% 22.1% 25.1 22.7 4.7 19.3 21.1NasdaqGS:MNST Monster Beverage Corporation United States 138.40 96.2% 22,377.9 2,464.9 7.2% 54.4% 31.3% 30.2% 41.1 34.3 9.1 29.0 30.0TSX:SOY SunOpta Inc. Canada 10.60 82.7% 839.2 1,242.6 9.0% 11.5% 5.3% 3.6% 24.1 18.1 0.7 12.7 18.9NYSE:WWAV The WhiteWave Foods Company United States 44.34 97.4% 9,232.5 3,436.6 24.3% 33.6% 11.3% 8.1% 40.1 33.9 2.7 23.7 33.1

Mean 89.0% $6,393.9 10.0% 37.5% 13.8% 10.2% 31.8 x 29.0 x 3.8 x 22.2 x 25.4 xMedian 95.5% 892.4 8.6% 35.7% 11.4% 7.8% 31.8 28.0 3.0 19.3 23.6

_____________________ Source: Capital IQ. Figures and LTM as of March 31, 2015. Figures are as reported and have not been adjusted for recent acquisitions.

Historical Performance

Revenue EBITDA Stock Performance

1.4x 1.5x1.8x

2.6x 2.6x3.0x

2.6x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

2010 2011 2012 2013 2014 LTM2015

2015E

12.7x 11.8x14.2x

17.2x19.1x 19.3x

17.5x

0x

4x

8x

12x

16x

20x

2010 2011 2012 2013 2014 LTM2015

2015E

80%

90%

100%

110%

120%

130%

Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15

S&P 500 HLCB Natural, Organic & Functional

_____________________ Source: Capital IQ. LTM as of March 31, 2015. Median multiples are based on enterprise values as of the end of the period indicated divided by the income statement figure for the period indicated.



Supplements Wholesalers and Direct-to-Consumer




Supplements WholesalersENXTAM:DSM Koninklijke DSM N.V. Netherlands 55.83 96.2% 12,563.5 11,113.0 (11.0% ) 26.2% 12.2% 6.6% 19.7 x 17.2 x 1.1 9.3 17.2NasdaqGS:NUTR Nutraceutical International Corporation United States 19.70 67.6% 227.9 216.0 3.6% 49.1% 17.4% 11.8% 12.4 12.0 1.1 6.1 9.0NYSE:OME Omega Protein Corporation United States 13.69 86.0% 329.8 308.6 19.2% 25.1% 22.2% 15.1% 12.0 9.4 1.1 4.8 7.1NYSE:PRGO Perrigo Company Ireland 165.55 94.8% 25,527.3 4,171.5 7.4% 34.4% 28.4% 18.6% 21.3 18.3 6.1 21.5 32.9Supplements Direct-to-ConsumerNYSE:HLF Herbalife Ltd. Cayman Islands 42.76 61.4% 5,105.7 4,958.6 (0.1% ) 50.5% 12.7% 10.8% 10.1 9.3 1.0 8.1 9.5NasdaqCM:LFVN Lifevantage Corporation United States 0.79 51.0% 86.5 211.0 0.7% 85.5% 10.6% 9.5% 6.6 N/A 0.4 3.9 4.3NasdaqCM:NATR Nature's Sunshine Products Inc. United States 13.12 71.4% 187.4 366.4 (2.9% ) 75.0% 6.4% 5.2% 18.7 13.7 0.5 8.0 9.8NYSE:NUS Nu Skin Enterprises Inc. United States 60.21 67.1% 3,525.1 2,569.5 (22.3% ) 81.4% 15.8% 13.7% 15.3 13.7 1.4 8.7 10.0NasdaqGS:RELV Reliv International, Inc. United States 1.12 41.8% 13.6 57.3 (10.1% ) 79.7% 1.8% 0.2% N/A N/A 0.2 12.9 N/ANYSE:USNA USANA Health Sciences Inc. United States 111.12 93.5% 1,295.5 790.5 8.1% 82.2% 15.8% 14.7% 16.6 14.7 1.6 10.4 11.2

Mean 73.1% $4,886.2 (0.7%) 58.9% 14.3% 10.6% 14.8 x 13.5 x 1.5 x 9.4 x 12.3 xMedian 69.5% 812.7 0.3% 62.8% 14.3% 11.3% 15.3 13.7 1.1 8.4 9.8




1.1x

0.7x0.9x

1.3x

1.0x1.1x 1.1x

0.0x

0.3x

0.6x

0.9x

1.2x

1.5x

2010 2011 2012 2013 2014 LTM2015

2015E

6.5x

4.9x 5.4x

9.3x8.1x 8.4x 7.9x

0x

2x

4x

6x

8x

10x

2010 2011 2012 2013 2014 LTM2015

2015E

75%

80%

85%

90%

95%

100%

105%

110%

115%


S&P 500 HLCB Supplements




Health & Wellness Retailers & Distributors




NasdaqGS:TFM The Fresh Market, Inc. United States $40.64 96.5% $1,956.7 $1,753.2 16.0% 33.9% 10.7% 7.2% 21.9 x 19.9 x 1.1 x 10.4 x 15.5 xNYSE:GNC GNC Holdings Inc. United States 49.07 98.8% 5,520.0 2,613.2 (1.1% ) 37.5% 18.7% 16.6% 15.6 13.9 2.1 11.3 12.8NYSE:NGVC Natural Grocers by Vitamin Cottage, Inc. United States 27.61 62.8% 647.4 546.0 13.9% 29.0% 8.0% 4.6% 40.9 N/A 1.2 14.9 25.6NasdaqGS:SFM Sprouts Farmers Market, Inc. United States 35.23 91.6% 5,644.3 2,967.4 14.7% 29.8% 8.6% 6.8% 40.1 32.4 1.9 22.0 28.2NasdaqGS:UNFI United Natural Foods, Inc. United States 77.04 91.8% 4,385.3 7,555.4 17.0% 16.0% 3.7% 3.0% 24.4 21.5 0.6 15.7 19.6NYSE:VSI Vitamin Shoppe, Inc. United States 41.19 82.7% 1,267.8 1,213.0 8.7% 42.5% 12.1% 9.3% 17.2 15.1 1.0 8.6 11.2NasdaqGS:WFM Whole Foods Market, Inc. United States 51.95 90.2% 18,114.5 14,626.0 10.0% 35.5% 9.2% 6.6% 28.9 25.9 1.2 13.4 18.9

Mean 87.8% $5,362.3 12.9% 32.0% 10.2% 7.7% 27.0 x 21.4 x 1.3 x 13.7 x 18.8 xMedian 91.6% 4,385.3 13.9% 33.9% 9.2% 6.8% 24.4 20.7 1.2 13.4 18.9




1.2x1.3x

1.5x 1.6x

1.2x 1.2x1.0x

0.0x0.2x0.4x0.6x0.8x1.0x1.2x1.4x1.6x1.8x

2010 2011 2012 2013 2014 LTM2015

2015E

12.9x 12.4x14.1x

16.6x

13.2x 13.4x12.2x

0x

3x

6x

9x

12x

15x

18x

2010 2011 2012 2013 2014 LTM2015

2015E

75%

80%

85%

90%

95%

100%

105%

110%

115%


S&P 500 HLCB Retailers & Distributors




Craft Products




SAM Boston Beer Co. Inc. United States $267.40 82.3% $3,490.9 $903.0 14.7% 51.5% 20.3% 16.4% 35.2 x 29.7 x 3.9 x 19.0 x 23.5 xBREW Craft Brew Alliance, Inc. United States 13.64 76.2% 275.1 200.0 7.3% 29.4% 7.2% 2.9% N/A 37.3 1.4 19.2 48.2

Mean 79.3% $1,883.0 11.0% 40.4% 13.7% 9.6% 35.2 x 33.5 x 2.6 x 19.1 x 35.9 xMedian 79.3% 1,883.0 11.0% 40.4% 13.7% 9.6% 35.2 33.5 2.6 19.1 35.9




1.9x1.7x 1.8x

2.9x 2.7x 2.6x2.3x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

2010 2011 2012 2013 2014 LTM2015

2015E

13.5x11.5x 12.5x

24.1x

19.4x 19.1x16.7x

0x

5x

10x

15x

20x

25x

2010 2011 2012 2013 2014 LTM2015

2015E

75%

80%

85%

90%

95%

100%

105%

110%

115%


S&P 500 HLCB Craft Products




Fitness Centers




ASX:AAD Ardent Leisure Group Australia $1.71 64.2% $971.8 $437.7 (3.6% ) 70.0% 19.6% 10.8% 15.7 x 13.5 x 2.2 x 11.3 x 20.6 xTSE:4801 Central Sports Co.,Ltd. Japan 18.60 92.7% 292.6 424.0 (9.7% ) 11.5% 8.8% 5.7% N/A N/A 0.7 7.8 12.1BMV:SPORT S Grupo Sports World, S.A.B. de C.V. Mexico 1.48 85.1% 130.8 71.9 1.4% N/A 19.0% 8.5% 21.0 16.7 1.8 9.6 21.4NYSE:LTM Life Time Fitness Inc. United States 70.96 99.1% 4,016.2 1,290.6 5.2% 44.9% 28.9% 17.8% 21.5 19.6 3.1 10.8 17.5BSE:533200 Talwalkars Better Value Fitness Limited India 5.94 90.7% 191.2 34.2 9.3% 80.7% 51.4% 36.9% 17.2 13.8 5.6 10.9 15.2NasdaqGM:CLUB Town Sports International Holdings Inc. United States 6.81 77.6% 457.0 453.8 (2.8% ) 57.5% 11.6% 1.2% N/A N/A 1.0 8.7 N/A

Mean 84.9% $1,009.9 (0.0%) 52.9% 23.2% 13.5% 18.9 x 15.9 x 2.4 x 9.8 x 17.4 xMedian 87.9% 374.8 (0.7%) 57.5% 19.3% 9.6% 19.1 15.3 2.0 10.2 17.5




1.8x

1.5x

1.9x 2.0x

2.4x

2.0x 2.0x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

2010 2011 2012 2013 2014 LTM2015

2015E

8.0x 7.6x8.9x

7.9x9.0x

10.2x 9.8x

0x

2x

4x

6x

8x

10x

12x

2010 2011 2012 2013 2014 LTM2015

2015E

90%

95%

100%

105%

110%

115%

120%

125%

130%


S&P 500 HLCB Fitness Centers




Weight Management




NYSE:MED Medifast Inc. United States $29.97 83.1% $311.7 $285.3 (17.9% ) 73.3% 15.0% 12.2% 16.3 x 14.4 x 1.1 x 7.3 x 8.9 xNasdaqGS:NTRI Nutrisystem, Inc. United States 19.98 93.1% 545.0 403.1 7.5% 50.6% 9.2% 7.3% 25.5 21.1 1.4 14.7 18.6NYSE:WTW Weight Watchers International, Inc. United States 6.99 23.4% 2,501.2 1,479.9 (9.9% ) 54.5% 24.4% 21.0% 11.7 12.9 1.7 6.9 8.0

Mean 66.5% $1,119.3 (6.8%) 59.5% 16.2% 13.5% 17.8 x 16.2 x 1.4 x 9.6 x 11.9 xMedian 83.1% 545.0 (9.9%) 54.5% 15.0% 12.2% 16.3 14.4 1.4 7.3 8.9




1.6x

0.8x1.0x

1.2x 1.3x 1.4x1.2x

0.0x

0.5x

1.0x

1.5x

2.0x

2010 2011 2012 2013 2014 LTM2015

2015E

10.8x

8.8x9.9x

8.0x8.7x

7.3x

10.6x

0x

3x

6x

9x

12x

2010 2011 2012 2013 2014 LTM2015

2015E

85%

90%

95%

100%

105%

110%

115%

120%

125%

130%


S&P 500 HLCB Weight Management


Same-Store Sales Performance


Health & Wellness Retailers & Distributors

8.5% 6.2%

4.5% 3.0% 1.7%

(3.0% )(5%)

0%

5%

10%

Sprouts Famers Market,Inc.

Natural Grocers by VitaminCottage, Inc.

Whole Foods Market, Inc. The Fresh Market, Inc. Vitamin Shoppe, Inc. GNC Holdings Inc.

_____________________ Source: Capital IQ. Same-Store Sales Performance for Calendar Year Q4.

Fitness Centers

10.2% 9.3%

0.6%

(3.9% )(5%)

0%

5%

10%

15%

Talwalkers Better Value Fitness Limited Ardent Leisure Group Life Time Fitness Inc. Town Sports International Holdings Inc.

_____________________ Source: Capital IQ. Same-Store Sales Performance for Calendar Year Q4.

Equity Capital Markets Overview


Equity Market Commentary Broader Equity Markets

• The S&P 500, Dow Jones and Nasdaq all fell in March, while the Russell 2000 was the only major index to end the month in positive territory

- Healthcare was the sole S&P sector to move higher, ending the month up 0.8%, while materials was the biggest laggard, falling 5.0%

• During Q1, the Dow Jones recorded the most daily swings of 1% or more since the fourth quarter of 2011; the increase in volatility occurred despite below-average volume for the quarter

20.0%40.0%60.0%80.0%

100.0%120.0%140.0%160.0%180.0%200.0%220.0%

Dec-06 Jan-09 Feb-11 Mar-13 Mar-15

NASDAQ Russell 2000 S&P 500 DJIA

March '15 2015DJIA (2.0%) (0.3%)S&P 500 (1.7%) 0.4%NASDAQ (1.3%) 3.5%Russell 2000 1.6% 4.0%

_____________________ Source: FactSet. As of March 31, 2015.

IPO Market Commentary Monthly IPO Pricing Activity

• The IPO market was quiet, with 8 IPOs pricing in March, raising $1.5 billion; this brings the Q1 total to 30 IPOs raising $5.6 billion, compared to 68 IPOs raising $12.1 billion in Q1 2014

• Demand for IPOs during Q1 was strong, with 30% pricing above their filing range, compared to 18% during Q1 2014

• Given the backdrop of elevated volatility, aftermarket performance in Q1 has pulled back, with average offer to 1-day and offer to 30-day at 12.2% and 18.5% respectively, compared to 19.4% and 33.4% during the same 2014 period

3027

22

3033

9

16

26 26

14 139 8

0

6

12

18

24

30

36

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

Average = 20

_____________________ Source: Dealogic. As of March 31, 2015. Excludes Closed End Funds and deals under $15 million.

Follow-on Market Commentary Monthly Follow-on Pricing Activity

• Driven by Healthcare, Energy and Financial Services, March was a record month, as 102 offerings priced, raising $37.1 billion, bringing the YTD total to 227 offerings

• The median file-to-offer discount declined for a second consecutive month to 3.5%, bringing the YTD median to 4.1%, the same level seen in all of 2014

• Bought deals were extremely prevalent in March, as 42% of all follow-on offerings were bought deals, compared to 15% last month and 25% for 2014

90

51

72 68

50

31

63

31

57

38

5867

102

0

20

40

60

80

100

120

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

Average = 60

_____________________ Source: Dealogic. As of March 31, 2015. Excludes Closed End Funds and deals under $15 million.

Recently Priced IPOs


IPO Valuation Statistics: 2010 – YTD 2015 (In millions, except per share data)

Valuation DataMedian of

Precedents

SectorNatural/

Organic & Functional

Health & Wellness Retailer

Healthy Living Packaged

Foods




-

IPO Date 7-Nov-14 31-Jul-13 25-Oct-12 24-Jul-12 31-Mar-11 4-Nov-10 -

Initial Filing Range $12.00 - 14.00 $14.00 - 16.00 $14.00 - 16.00 $13.00 - 15.00 $15.00 - 17.00 $18.00 - 20.00 -

IPO Price $15.00 $18.00 $17.00 $15.00 $16.00 $22.00 -

Post-Deal Market Cap. $500.4 $2,635.8 $2,941.0 $335.2 $1,656.8 $1,055.8 $1,356.3

Forward Year Ending 31-Dec-13 31-Dec-13 31-Dec-12 31-Dec-11 31-Dec-11 -

Long-term EPS Growth 30.0% 25.4% 17.3% 21.5% 11.9% 14.0% 19.4%

P/E - Forward Year at Pricing 73.2x 32.7x 23.6x 32.6x 13.0x 21.4x 28.1x

PEG - at Pricing 2.44x 1.09x 1.35x 1.16x 0.87x 0.97x 1.1x

P/E - NTM 191.6x 40.1x 40.1x 40.9x 15.6x 21.9x 40.1x

EV/EBITDA - NTM 16.6x 17.6x 18.8x 13.0x 10.4x 9.0x 14.8x

Operating Data

LTM Revenue at Pricing $74.2 $2,071.2 $2,157.6 $316.6 $1,822.2 $940.7 $1,381.5

LTM Net Income at Pricing ($34.4) $36.3 $117.6 $7.8 $96.6 $38.0 $37.1

Aftermarket Performance

Offer to 1 Day 27.4% 122.8% (1.5%) 19.1% 4.7% 46.0% 23.3%

Offer to 1 Month 12.5% 105.3% (6.2%) 30.5% 19.1% 73.6% 24.8%

Offer to Current 29.5% 95.7% 160.8% 84.1% 206.7% 84.7% 90.2%

_____________________ Source: Capital IQ, company filings and Wall Street research. As of March 31, 2015.

Baird’s Healthy Lifestyle and Craft Beer Transaction Experience


Undisclosed Value

Preferred Equity

Private Placement

$68,900,000Common Stock

Initial Public Offering

$257,500,000

A Portfolio Company of

Sale to

Undisclosed Value

Inv estment in

Financing

Undisclosed Value


Sale to

Undisclosed Value

Sale of 30% stake to




Follow-on Offering





Undisclosed Value

Sale to



$1,400,000,000

Acquisition of 48% of

Undisclosed Value

Minority Investment in

Undisclosed Value

Undisclosed Value


Sale to

$190,000,000


Sale to

Undisclosed Value

Alliance with

Undisclosed Value

Undisclosed Value

Acquisition of




Follow-on Offering


Follow-on Offering



Undisclosed Value

Sale to



_____________________ Note: The transactions noted were selected for their relevance and are not indicative of all Baird transactions. Asterisk indicates a transaction executed by senior Baird team members at prior firms dating back to 1995. Please visit www.rwbaird.com/investment-banking for a complete list of Baird’s transactions.

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Global Investment Banking Contact List


Brian S. Doyal Co-Head of Global

Investment Banking +1.312.609.4916

[email protected]

Brian P. McDonagh Co-Head of Global

Investment Banking +1.704.553.6611

[email protected]

Rodney L. Jones-Tyson Managing Director

Chief Operating Officer +1.312.609.4984

[email protected]

Richard F. Waid Vice Chairman

+1.404.264.2210 [email protected]

C.H. Randolph Lyon Vice Chairman

+1.312.609.4931 [email protected]

Technology & Services Peter S. Kies Managing Director Head of Technology & Services Investment Banking +1.414.765.7262 [email protected] Stephen B. Guy Managing Director +1.414.765.7247 [email protected] Christopher W. Hildreth Managing Director +1.312.609.4937 [email protected] Michael Horwitz Managing Director +1.415.627.3284 [email protected] John R. Lanza Managing Director +1.414.298.7669 [email protected] Mike Magluilo Managing Director +1.303.551.4673 [email protected] John Moriarty Managing Director +1.650.424.3811 [email protected]

Kiran Paruchuru Managing Director +1.414.298.7642 [email protected] Breton A. Schoch Managing Director +1.312.609.4965 [email protected] Andrew K. Snow Managing Director +1.312.609.4972 [email protected] Ross W. Williams Managing Director +1.414.298.6235 [email protected] Daniel M. Alfe Director +1.312.609.4922 [email protected] Peter Augar Director +44.207.667.8263 [email protected] Jordan Klein Director +1.312.609.4978 [email protected] John Sun Director +44.207.667.8224 [email protected] .

Industrial Paul T. Rogalski Managing Director Head of Industrial Investment Banking +1.312.609.4912 [email protected] Christopher C. McMahon Managing Director Head of Global M&A +1.312.609.4983 [email protected] Brian P. McDonagh Managing Director Co-Head of Global M&A +1.704.553.6611 [email protected] Justin T. Albert Managing Director +1.303.270.6381 [email protected] Joel A. Cohen Managing Director +1.312.609.4924 [email protected] Christopher R. Cooper Managing Director +1.704.553.6610 [email protected] Adam W. Czaia Managing Director +1.414.298.7358 [email protected] Stephen B. Guy Managing Director +1.414.765.7247 [email protected] Jason P. Kliewer Managing Director +1.813.273.8242 [email protected] Thomas E. Lange Managing Director +1.813.273.8248 [email protected] Michael Lindemann Managing Director +1.414.298.7408 [email protected] Joseph T. Packee Managing Director +1.414.298.7644 [email protected] Trisha K. Renner Managing Director +1.303.270.6347 [email protected] Christian Colucci Director +1.312.609.4475 [email protected] Yong-Jae Kim Director +1.312.609.4939 [email protected]

Consumer Brian P. McDonagh Managing Director Head of Consumer Investment Banking +1.704.553.6611 [email protected] Andrew Martin Managing Director +1.704.553.6615 [email protected]

Nicholas Pavlidis Managing Director +1.312.609.4977 [email protected] Joe Pellegrini Managing Director +1.704.553.6612 [email protected]

Kurt M. Roth Managing Director +1.312.609.4689 [email protected] Christopher J. Sciortino Managing Director +1.312.609.4923 [email protected] Katie J. Melzer Director +1.415.627.3272 [email protected] Robert Rosenfeld Director +1.312.609.4971 [email protected] Matt Tingler Director +1.312.609.4470 [email protected] Maria Watts Director +1.312.609.4743 [email protected]

Real Estate Steven Goldberg Managing Director +1.703.918.7808 [email protected] James O’Brien Managing Director +1.703.918.7814 [email protected] Jeff Rogatz Managing Director +1.703.918.7823 [email protected] Adam Lefkowitz Director +1.703.918.7817 [email protected] Tom O’Hare Director +1.202.303.1811 [email protected]

Healthcare Brian S. Doyal Managing Director Head of Healthcare Investment Banking +1.312.609.4916 [email protected] Rob Andrews Managing Director +1.312.609.5489 [email protected]

Benjamin A. Brown Managing Director +1.414.298.7013 [email protected] Ryan Mausehund Managing Director +1.650.858.3817 [email protected] David S. Schechner Managing Director +1.617.426.5424 [email protected] Bill Suddath Managing Director +1.404.264.2222 [email protected] Manish Gupta Director +1.414.765.3802 [email protected] Chad W. Moore, CPA, CFA Director +1.312.609.5475 [email protected]

Energy Richard F. Waid Vice Chairman +1.404.264.2210 [email protected] Curtis Goot Managing Director +1.314.445.6540 [email protected] John R. Lanza Managing Director +1.414.298.7669 [email protected] Frank Murphy Managing Director +1.314.445.6532 [email protected] Nick Alfermann Director +1.314.445.6531 [email protected] Kjell Lundal Director +1.314.445.6533 [email protected]

Financial Services Mark C. Micklem Managing Director +1.703.821.5787 [email protected] Paul Egge Director +1.202.303.1816 [email protected]

Financial Sponsors C. Christopher Coetzee Managing Director +1.312.609.4913 [email protected] Leslie Cheek IV Managing Director +1.617.426.5789 [email protected] Vinay Ghai Managing Director +44.207.667.8225 [email protected] Thomas W. Lacy Managing Director +1.414.298.7648 [email protected]

John Moriarty Managing Director +1.650.424.3811 [email protected] Jeffrey M. Seaman Managing Director +1.312.609.4687 [email protected] David M. Wierman Managing Director +1.404.264.2211 [email protected] Mergers & Acquisitions

Christopher C. McMahon Managing Director Head of Global M&A +1.312.609.4983 [email protected] Brian P. McDonagh Managing Director Co-Head of Global M&A +1.704.553.6611 [email protected] Owen L. Hart Managing Director +1.415.627.3273 [email protected] Howard P. Lanser Managing Director +1.312.609.5478 [email protected] Satoshi Matsumoto Managing Director Director of Japan M&A +1.312.609.5446 [email protected] J. David Cumberland, CFA Director, M&A Research +1.312.609.5429 [email protected]

Equity Capital Markets

Greg Ingram Managing Director +1.415.627.3279 [email protected] Lance R. Lange Managing Director +1.414.765.7079 [email protected] Gary R. Placek Managing Director +1.414.765.3611 [email protected] Ryan Engelhardt Director +1.414.298.2637 [email protected]

Debt Advisory Howard P. Lanser Managing Director +1.312.609.5478 [email protected] Paul Bail Managing Director +44.207.667.8271 [email protected]

Europe London†

David M. Silver Managing Director Head of European Investment Banking +44.207.667.8216 [email protected] John A. Fordham Chairman of Baird International +44.207.667.8438 [email protected] Paul Bail Managing Director +44.207.667.8271 [email protected] Vinay Ghai Managing Director +44.207.667.8225 [email protected] Jonathan Harrison Managing Director +44.207.667.8414 [email protected] Nicholas R. Sealy Managing Director +44.207.667.8370 [email protected] Martin Luen Director +44.207.667.8381 [email protected] Frankfurt Joachim Beickler Managing Director +49.69.13.01.49.51 [email protected] Michael Wolff Managing Director +49.69.13.01.49.49 [email protected] Sven Harmsen Director +49.69.13.01.49.56 [email protected]

Asia Shanghai

Anthony Siu Managing Director Head of Asia Investment Banking +86.21.6182.0980 [email protected]

† Robert W. Baird Limited is authorized and regulated by the Financial Conduct Authority.

Appendix – Disclaimers and Other Disclosures


DISCLAIMERS This is not a complete analysis of every material fact regarding any company, industry or security. The opinions expressed here reflect our judgment at this date and are subject to change. The information has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy.

ADDITIONAL INFORMATION ON COMPANIES MENTIONED HEREIN IS AVAILABLE UPON REQUEST

The Dow Jones Industrial Average, S&P 500, S&P 400 and Russell 2000 are unmanaged common stock indices used to measure and report performance of various sectors of the stock market; direct investment in indices is not available.

Baird is exempt from the requirement to hold an Australian financial services license. Baird is regulated by the United States Securities and Exchange Commission, FINRA, and various other self-regulatory organizations and those laws and regulations may differ from Australian laws. This report has been prepared in accordance with the laws and regulations governing United States broker-dealers and not Australian laws.

Copyright 2015 Robert W. Baird & Co. Incorporated. No part of this publication may be reproduced or distributed in any form or by any means without our prior written approval. However, you may download one copy of the information for your personal, non-commercial viewing only, provided that you do not remove or alter any trade mark, copyright or other proprietary notice.

OTHER DISCLOSURES UK disclosure requirements for the purpose of distributing this report into the UK and other countries for which Robert W Baird Limited holds an ISD passport.

This report is for distribution into the United Kingdom only to persons who fall within Article 19 or Article 49(2) of the Financial Services and Markets Act 2000 (financial promotion) order 2001 being persons who are investment professionals and may not be distributed to private clients. Issued in the United Kingdom by Robert W Baird Limited, which has offices at Finsbury Circus House 15 Finsbury Circus, London, EC2M 7EB, and is a company authorized and regulated by the Financial Conduct Authority.

Robert W Baird Limited ("RWBL") is exempt from the requirement to hold an Australian financial services license. RWBL is regulated by the Financial Conduct Authority ("FCA") under UK laws and those laws may differ from Australian laws. This document has been prepared in accordance with FCA requirements and not Australian laws.

Robert W. Baird & Co. www.rwbaird.com

800.RW.BAIRD

Equity Capital Markets and Private Equity Office Locations

Atlanta One Buckhead Plaza 3060 Peachtree Road Suite 1815 Atlanta, GA 30305 Boston One Post Office Square Suite 3617 Boston, MA 02109 Boulder One Boulder Plaza 1301 Canyon Boulevard – Suite 220 Boulder, CO 80302 Charlotte 6000 Fairview Road Suite 1100 Charlotte, NC 28210 Chicago 227 West Monroe Street Suite 2100 Chicago, IL 60606 Denver 210 University Boulevard Suite 700 Denver, CO 80206 Frankfurt* Neue Mainzer Strasse 28 60311 Frankfurt Germany

London* Finsbury Circus House 15 Finsbury Circus London EC2M 7EB UK Milwaukee 777 East Wisconsin Avenue Milwaukee, WI 53202 Nashville 2525 West End Avenue Suite 1000 Nashville, TN 37203 New York City 3 Rockefeller Plaza 610 Fifth Avenue New York, NY 10020 Palo Alto 1661 Page Mill Road Suite A Palo Alto, CA 94304 San Francisco 50 California Street Suite 450 San Francisco, CA 94111 555 California Street Suite 4900 San Francisco, CA 94104

Shanghai* Rm 42-022, 42/F, Hang Seng Bank Tower No.1000 Lujiazui Ring Road Pudong Shanghai 200120, China St. Louis 8000 Maryland Avenue Suite 500 St. Louis, MO 63105 Stamford 100 First Stamford Place 3rd Floor Stamford, CT 06902 Tampa 3000 Bayport Drive Suite 760 Tampa, FL 33607 Washington, D.C. 1717 K Street NW Suite 910 Washington, DC 20006

*Baird and its operating affiliates have offices in the United States, Europe and Asia. Robert W. Baird & Co. Incorporated. Member SIPC. Robert W. Baird Ltd. and Baird Capital Partners Europe are authorized and regulated in the UK by the Financial Conduct Authority. ©2015 Robert W. Baird & Co. Incorporated.

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