Slide 1: Saputo Acquires Dairyworld Foods
SAPUTO ACQUIRES DAIRYWORLD FOODS
Slide 2: Overview of the transaction
Overview of the transaction “This transaction is a key strategic step towards the Company’s objective to become a leader of the North American dairy industry” v On December 18, 2000, Saputo Inc. announced that it has entered into an agreement to acquire the fluid milk (“Dairyland”) and cheese operat
Slide 3: Overview of Dairyworld Foods
Overview of Dairyworld Foods “Dairyworld Foods will diversify Saputo’s product range in its core business” v National in scope and scale on the Canadian territory. v Over 3,200 employees. v 1.4 billion litres of milk processed Division Segmentation by Revenue annually. v 24 plants strategically loca
Slide 4: Overview of Dairyworld Foods - Employees
Overview of Dairyworld Foods “Dairyworld’s seasoned team will contribute significantly to Saputo’s growth” Employees v Dairyworld employs approximately 3,200 people of which 2,400 are hourly employees. Ø 1,700 hourly employees are unionized. v Dairyworld has historically had good relationships with
Slide 5: Overview of Divisions - Dairyland
Overview of Divisions - Dairyland “Important market shares in Western Canada and New Brunswick” General v Produces and markets refrigerated dairy products and beverages. v C$838 million (U$551 million) in annual revenues. v EBITDA of C$22.4 million (US$14.7 million). v Approximately 73% of revenues
Slide 6: Overview of Divisions - Dairyland Products
Overview of Divisions - Dairyland “Dairyland is well developed in all significant dairy categories” Products v The Dairyland fluid business is dominated by Dairyworld’s own brands: Dairyland, Dairy Producers and Baxter. v Dairyland has innovative, value-added products Ø Milk 2 Go, a portable single-
Slide 7: Dairyland Division's Revenue by Market Segment
Overview of Divisions - Dairyland “Dairyland’s market segmentation is similar to total Canadian market” Sales v 87% of total division sales are branded products and 13% are private label products. v In the Retail segment, Dairyland sells to Division’s Revenue by Market Segment most of the major supe
Slide 8: Overview of Divisions - Dairyland Production
Overview of Divisions - Dairyland “Dairyland bottles approximately 600 million litres of fluid milk annually” Production v 12 plants + 1 plant (Saskatoon) shared with Armstrong, strategically located in all major markets in Canada. Plant Locations Courtenay, BC Armstrong, BC Edmonton, AB Brampton, O
Slide 9: Overview of Divisions - Armstrong
Overview of Divisions - Armstrong “Important market shares in Western Canada and Ontario” General v Manufactures and markets cheese, butter, powdered milk, evaporated milk and food ingredients. v C$582 million (U$383 million) in annual revenues. v EBITDA of C$39 million (US$25.6 million). v Approxim
Slide 10: Overview of Divisions - Armstrong Products
Overview of Divisions - Armstrong “More than 50% of cheese production consists of Cheddar and another 18% is composed of Process Cheese” Products v The business is dominant in cheese, with a broad and growing focus in other food ingredient and manufactured retail products. v Armstrong’s product rang
Slide 11: Armstrong Division's Revenue by Market Segment
Overview of Divisions - Armstrong “Retail is Armstrong's most important market segment” Sales v 71% of division sales are private label products. Division’s Revenue by Market Segment v In the Retail segment, Armstrong sells to most of the major supermarket chains in International Canada as well as c
Slide 12: Overview of Divisions - Armstrong Production
Overview of Divisions - Armstrong “Armstrong produces on an annual basis 60 million kg of cheese” Production v 11 plants + 1 plant (Saskatoon) shared with Dairyland, strategically located in all major markets in Canada. Plant Locations Abbotsford, BC Red Deer, AB Saskatoon, SK Oakville, ON Glenwood,
Slide 13: Strategic Rationale
Strategic Rationale “This transaction places Saputo at the forefront of the Canadian dairy industry” v This acquisition will give Saputo: Ø Greater geographic breadth (plants in 8 Canadian provinces); Ø An important presence in the national Cheddar market; Ø A significant participation in the Canadi
Slide 14: Combined Company – Financial Analysis
Combined Company – Financial Analysis “The combined company will have 65.1% of its sales in Canada and 32.7% in the U.S.” Overview v Following the acquisition of Dairyworld Foods, Saputo will be an even more significant player in the consolidating North American dairy industry Ø 55 production facili
Slide 15: Combined Company – Attractive multiples
Combined Company – Financial Analysis “Attractive multiples” Multiples v Purchase price of C$407 million (US$268 million) representing: Ø TEV/EBITDA multiple of 6.6 x annualized EBITDA of C$61.4 million (US$40.4 million) Ø TEV/Sales multiple of 0.29 x annualized revenues of C$1.4 billion (US$921 mil
Slide 16: Pro Forma Consolidated Balance Sheet
Combined Company – Financial Analysis “Saputo will maintain a strong balance sheet” Pro Forma Consolidated Balance Sheet Total (1) (2) Saputo Inc. Dairyworld Combined Assets Current Assets 431.5 276.6 708.1 Fixed Assets / PP&E 495.7 172.1 667.8 Goodwill 478.7 114.6 593.3 Other Assets 21.1 12.7 33.8
Slide 17: Pro Forma Consolidated Income Statement
Combined Company – Financial Analysis “The acquisition is accretive without taking into account any synergies” Pro Forma Consolidated Income Statement v Acquisition is accretive to Total C$ millions, except per share amounts Saputo (1) Dairyworld Foods (2) Adjustments (3) Combined EPS by $0.23 (excl
Slide 18: Pro Forma Segmented Information
Combined Company – Financial Analysis “Saputo will become an important player in the Canadian fluid milk market” Pro Forma Segmented Information (in millions of C$) Total (1) (2) Saputo Inc. Dairyworld Combined Revenues Dairy Products Canada 601.9 582.3 1,184.2 United States 1,109.4 - 1,109.4 1,711.