Retail CFOs Expect More Merger Activity

supermarketnews.com DATAPOINTS March 11, 2013 RETAIL CFOS EXPECT MORE MERGER ACTIVITY CHICAGO – The retail industry is poised for another year of mergers and acquisitions, most likely led by strategic buyers, according to the BDO Retail Compass Survey of CFOS from BDO USA. The survey of chief financial officers from 100 large retailers revealed that nearly all retail CFOS (94%) expect merger and acquisition activity will increase or remain steady in 2013. Retailers seeking omni-channel capabilities could drive strategic deals, BDO reported. The survey found that 59% of CFOS expect most deals to be strategic in 2013. A separate report from the Food Institute, Upper Saddle River, N.J., noted that food-industry merger activity declined in 2012, with 301 deals completed, down about 21%. “Fiscal uncertainty and frustration with Washington politics created a hesitant approach to M&A in 2012," said Henry Mollman, a Food Institute analyst. SOURCE: BDO USA, Food Institute Food Industry Mergers Decline* More Strategic Buyers Seen Retail Mergers Seen Increasing (% of CFOS who predict most deals will be done by each type of buyer) 6% Decrease 400 300 384 301 200 - 317 100 40% Increase 54% About the same 2010 2011 2012 41% Financial Buyers * Includes retailers, restaurants and suppliers 59% Strategic Buyers SOURCE: Food Institute Investment Firms Reduce Activity* 70 60 SOURCE: BDO Retail Compass Survey 50 69 40 49 30 46 20- 83 SOURCE: BDO Retail Compass Survey Number of food-processor 10 mergers in 2012 2010 Private equity acquisitions of food-industry firms completed or in process at year-end. 2011 2012 SOURCE: Food Institute 22 SOURCE: Food Institute U.S. Seen Leading M&A Activity (Where retail CFOS expect most deals to occur in 2013) 68% 20% 3% of retail CFOS predict most mergers will take place among food companies 7% 2% U.S. ASIA/PACIFIC LATIN AMERICA EUROPE OTHER SOURCE: BDO Retail Compass Survey "Steadier markets, renewed interest in international growth and the desire for omni-channel capabilities are fueling the investment rebound in retail and consumer businesses." -STEPHEN VWYSS, partner, retail and consumer practice, BDO USA 515 -27.9% Decline in financial acquisitions of food-industry firms in 2012 SOURCE: Food Institute Average EBITDA multiple retail CFOS expect to pay (for retail/consumer goods companies) supermarketnews.com DATAPOINTS March 11, 2013 RETAIL CFOS EXPECT MORE MERGER ACTIVITY CHICAGO – The retail industry is poised for another year of mergers and acquisitions, most likely led by strategic buyers, according to the BDO Retail Compass Survey of CFOS from BDO USA. The survey of chief financial officers from 100 large retailers revealed that nearly all retail CFOS (94%) expect merger and acquisition activity will increase or remain steady in 2013. Retailers seeking omni-channel capabilities could drive strategic deals, BDO reported. The survey found that 59% of CFOS expect most deals to be strategic in 2013. A separate report from the Food Institute, Upper Saddle River, N.J., noted that food-industry merger activity declined in 2012, with 301 deals completed, down about 21%. “Fiscal uncertainty and frustration with Washington politics created a hesitant approach to M&A in 2012," said Henry Mollman, a Food Institute analyst. SOURCE: BDO USA, Food Institute Food Industry Mergers Decline* More Strategic Buyers Seen Retail Mergers Seen Increasing (% of CFOS who predict most deals will be done by each type of buyer) 6% Decrease 400 300 384 301 200 - 317 100 40% Increase 54% About the same 2010 2011 2012 41% Financial Buyers * Includes retailers, restaurants and suppliers 59% Strategic Buyers SOURCE: Food Institute Investment Firms Reduce Activity* 70 60 SOURCE: BDO Retail Compass Survey 50 69 40 49 30 46 20- 83 SOURCE: BDO Retail Compass Survey Number of food-processor 10 mergers in 2012 2010 Private equity acquisitions of food-industry firms completed or in process at year-end. 2011 2012 SOURCE: Food Institute 22 SOURCE: Food Institute U.S. Seen Leading M&A Activity (Where retail CFOS expect most deals to occur in 2013) 68% 20% 3% of retail CFOS predict most mergers will take place among food companies 7% 2% U.S. ASIA/PACIFIC LATIN AMERICA EUROPE OTHER SOURCE: BDO Retail Compass Survey "Steadier markets, renewed interest in international growth and the desire for omni-channel capabilities are fueling the investment rebound in retail and consumer businesses." -STEPHEN VWYSS, partner, retail and consumer practice, BDO USA 515 -27.9% Decline in financial acquisitions of food-industry firms in 2012 SOURCE: Food Institute Average EBITDA multiple retail CFOS expect to pay (for retail/consumer goods companies)