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Industry Update: Consumer & Retail M&A – December, 2015

December, 2015

Stock price performance and valuation trends have been strong across most sectors. The following is an overview of the selected industries and their respective stock price performance over the last three years and current valuation levels [(Relative Stock Price) (Enterprise Value to EBITDA)].

– Apparel & Accessories (12.3%) (12.0x)
– Automotive & Components (72.8%) (7.7x)
– Consumer Electronics (54.0%) (12.0x)
– Consumer Services (72.4%) (10.2x)
– Footwear (-2.0%) (13.9x)
– Home Improvement (71.1%) (16.6x)
– Leisure Products (42.8%) (10.2x)
– Retailing (16.1%) (16.8x)

For year-to-date 2015, strategic buyers accounted for 84% of Consumer & Retail M&A transactions. During 2014, strategic buyers accounted for 84% of the transactions as well.
For reported closed transactions, Consumer & Retail transaction multiples have been in the 10x – 12x range since 2010.

Select recent notable publicly announced M&A transactions:

– Interval Leisure Group, Inc. signed a definitive agreement to acquire Starwood Vacation Ownership, Inc. for $1.7 billion.
– Mattress Firm entered into a agreement to acquire Sleepy’s, LLC for approximately $780 million.
– Hotel Shilla Co. signed a definitive agreement to acquire DFASS Group for approximately $105 million.
– Westport Innovations, Inc. entered into a merger agreement to acquire Fuel Systems Solutions, Inc. for approximately $136 million.
– QVC, Inc. signed a definitive agreement to acquire Zulily, LLC for approximately $2.5 billion.
– Perceva Capital offered to acquire Vanity Fair Brands, LP from Fruit of the Loom for an undisclosed amount.

Notable IPO’s include Etsy, Bojangles, MCBC Holdings, Fogo de Chao, Planet Fitness and Wingstop.

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