Catching the Trendswithin the

Consumer SectorPresented by Opus Connect

Moderator:David Yarnell, BEV Capital

Panelists:Richard Baum, Consumer Growth Partners

Alex Chefetz, BTIGLisle Davies, Davies + Co.

Sabrina Merage, Consolidated Investment Group

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Questions for the panel?

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• Founded by Lou Sokolovskiy

– Founder of Genero Capital Partners

• Chapters: LA, NY, San Francisco, Chicago,

Orange County

– Monthly seminars

– Specialty: webinars, Deal Connect “speed-networking”

• Membership by invitation only

– Only accomplished senior executives, vetted by selection committee

• Intimate, productive events 3

25+ years experience in the broad consumer sector (including retail, restaurants, products, ecommerce, media, services, travel)

• As an Operator

– CEO of Mom365 (in hospital newborn photography and marketing to moms)

– CEO of MEXX USA (apparel)

– Product Management (General Mills)

– Buyer (Macys)

• As a Consultant

– McKinsey & Company

– Boutique turnaround groups

David Yarnell

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• As an Investor

– Operating Partner at Falconhead Capital (middle market PE consumer)

– BEV Capital (venture consumer & technology)

– Consumer Venture Partners (venture consumer)

– Advisor to several middle market PE consumer funds

• Board Seats (representative)

– Alloy Media, Buca di Beppo (restaurants), Escort (radar), LoveSac (retail), Travel Holdings

David Yarnell

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Private equity firm with exclusive focus on retail and non-perishable branded consumer products

Extensive network of investors, lenders, industry executives, and service providers

Unlike traditional PE funds, CGP does not have a pool of committed capital, but instead raises capital on a deal-by-deal basis from institutional investors and family offices

CGP adds significant value over the total investment horizon by its involvement from due diligence through exit.

Portfolio

CGP Overview:

A Sector Focused Private Equity Firm

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The CGP Team:

Over 100 Years of Combined Sector and Investment Experience

Richard Baum, Managing Partner (New York) 30+ years as top-ranked Wall Street retail/consumer equity research analyst

at Credit Suisse First Boston, Goldman Sachs, Sanford C. Bernstein & Co. Previous experience at Bloomingdale’s and The Boston Consulting Group Board of Directors of Vera Bradley, Inc. (NYSE: VRA) and Harris Originals of

NY, Inc.

Bill Reisler, Managing Partner (San Diego/Kansas City) 30+ years of private equity experience. Co-Founder of Kansas City Equity

Partners and Former Chairman of NASBIC Previous experience in new product development and strategic planning at

Hallmark and Sprint Board of Directors of B Cellars and Wild Things Gear

Jeff Teeven, Partner (Kansas City) 16+ years of private equity/venture capital direct investment experience,

primarily at Kansas City Equity Partners and CGP Previous experience in corporate finance/M&A at KPMG Peat Marwick

Earl Benson, Principal (Atlanta) 30+ years of C-level financial and operating experience with public and

privately held retailers. Previous experience in assurance and advisory work at Deloitte

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CGP Investment Criteria:

Backing Proven Concepts

Profitable companies with at least $2MM of EBITDA

Evaluation criteria

Defensible business model Experienced management team Proven economics EBITDA growth potential Viable exit strategy

Capital requirements of at least $5MM

Control or significant minority participation

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Source: BTIG, LLC

BTIG Global Share Volume

BTIG Global Equity volume in 2013 was 46.5 billion shares, up from 30 billion shares in 2012

8th largest US equity broker-deal; 16th

largest global equity broker-dealers

BTIG offers a substantial source of liquidity in a highly complex, fragmented and volatile market

445+ professionals in 10 US and 4 International offices

US Office

International Office

Business inception

New York

Prime Brokerage

Institutional Trading

DMA

San Francisco

Outsource Trading

Boston

Dallas Equity Derivatives

Chicago Greenwich

Red Bank

Los Angeles

24-Hour Global Trading

Sydney

Hong Kong

Event-Driven Team (US)

Singapore

Japan Team

Fixed Income

Capital Markets

London

Commodities/Futures

Corporate Access

Preferred Securities

F/X

Atlanta

Event-Driven Team (UK)

Derivatives (UK)

TradeSave (UK)

Resources (UK)

Convertibles

Rates

0

2,000

4,000

6,000

8,000

10,000

12,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Qu

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y V

olu

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Mil

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BTIG Select Recent Capital Markets ActivitiesJanuary 2014

$84,000,000

F/O Equity Offering

Selling Group

April 2013

$175,000,000

Preferred Stock

Selling Group

August 2013

$34,000,000

IPO

Selling Group

August 2013

$220,000,000

F/O Equity Offering

Selling Group

July 2013

$40,000,000

Preferred Stock

Selling Group

June 2013

$265,200,000

Convertible Notes

Co-Manager

June 2013

$20,000,000

Preferred Stock

Lead Manager

June 2013

$7,202,500

Preferred Stock

Selling Group

June 2013

$18,000,000

Preferred Stock

Selling Group

June 2013

$115,000,000

Preferred Stock

Selling Group

May 2013

$48,000,000

Preferred Stock

Selling Group

September 2013

$88,000,000

Preferred Stock

Selling Group

September 2013

$705,000,000

F/O Equity Offering

Co-Manager

September 2013

$20,000,000

F/O Equity Offering

Co-Manager

• BTIG has been very active in capital markets activities

• In 2013, we participated in over 65 transactions totaling over $40 billion

• So far in 2014, we have participated in over 20 transactions, raising over $2 billion

September 2013

$25,000,000

Preferred Stock

Selling Group

October 2013

$260,000,000

IPO

Co-Manager

May 2013

$12,000,000

Equity Offering

Sole Arranger

August 2013

$2,730,000

ATM Offering

Placement Agent

June 2013

$132,250,000

Preferred Stock

Selling Group

October 2011 - Present

$15,000,000

ATM Offering

Placement Agent

May 2013

$750,000,000

Preferred Stock

Selling Group

November 2013

$113,850,000

IPO

Co-Manager

November 2013

$42,000,000

Preferred Stock

Co-Manager

December 2013

$20,000,000

Preferred Stock

Co-Manager

December 2013

$3,250,500

PIPE

Sole Arranger

February 2014

$131,410,000

F/O Equity Offering

Co-Manager

March 2014

$37,000,000

Convertible Debt

Sole Arranger

April 2014

$103,000,000

F/O Equity Offering

Selling Group

April 2014

$822,000,000

F/O Equity Offering

Selling Group

April 2014

$60,000,000

Preferred Stock

Selling Group

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Investment Banking Product OfferingA Partnership with Corporate Management

At-the-Market (“ATM”) Offerings

PRODUCT OFFERINGS CAPITAL RAISING TO SUPPORT

Registered Directs / PIPEs

Private Placements

M&A Advisory

Capital Markets Advisory

Growth Capital

Acquisition

Recapitalizations

Restructurings

Follow-On Offerings

Convertible Bonds/Preferred Securities Stock Buyback

General Corporate Purposes

Dividend Distributions

Initial Public Offerings

Re-Domiciling

Uniquely tailored financing and advisory solutions to corporate clients seeking to achieve liquidity or access the capital markets

We start with an in-depth analysis of each client’s needs and align their requirements with appropriate liquidity alternatives and sources of capital

We provide direct access to market makers and sales traders to provide real-time feedback and trading dynamics

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Selected Clients

Ecommerce Softlines Hardlines Restaurants Hospitality Food & Beverage Consumer Finance Consumer Products

Alex Chefetz, Managing Director – Investment Banking

Mr. Chefetz is a Managing Director with BTIG ’s Investment Banking group. BTIG was formed in 2005, through the merger of San Francisco’s Baypoint Trading and New York’s Bass Trading. The founders set out to create an institutional trading firm which offers high-touch service in an increasingly automated industry. BTIG has become one of the most recognized block trading experts and funds services firms in the world. The Goldman Sachs Group, Inc. became an investor in 2008, and CLSA became an investor in 2014.

Mr. Chefetz has over 20 years of investment banking experience, providing M&A and financing advice to a wide range of growth companies in retailing, footwear & apparel, food & beverage, personal care, household products, eCommerce, restaurants and consumer finance.

Prior to BTIG, Mr. Chefetz was with Lazard Middle Market as the co-head of the consumer and retail banking group. He started his investment banking career at Drexel Burnham Lambert, spent seven years with Citigroup in their consumer & retail investment banking group and was one of the original partners of Thomas Weisel Partners, co-heading their consumer and retail investment banking group for almost ten years.

Mr. Chefetz received his BA from Haverford College and his MM from J. L. Kellogg Graduate School of Management at Northwestern University.

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About Davies + Co.

• Davies + Co. is a New York City-based advisory firm that supports consumer brands, retailers, and investors in areas related to strategy

• We provide our clients with comprehensive:

– Market research & analysis

– Consumer insights

– Competitive intelligence

– Brand growth & positioning strategies

– Expert store audits

– Key category expertise

– Due diligence support

• Davies + Co. brings to bear best of breed teams to optimally address clients’ business challenges

– We specialize in

• Identifying key business challenges and critical issues for testing

• Designing research methodologies to deliver significant insights and actionable data

• Translating findings into business strategies that drive growth and offer practical merchandising and marketing improvements

– We triangulate multiple data points to ensure delivery of value-added research and analysis to our clients

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About Lisle Davies

• Lisle has 25 years of consumer and retail industry experience advising clients across a range of strategic issues. She works directly with Boards of Directors, CEO’s, CMO’s and private equity/ investor partners to develop consumer insight driven growth strategies for private and public companies. She has advised clients across a range of issues including business planning, consumer/customer acquisition/ retention, channel strategy, market entry, brand positioning, product and assortment, marketing, and productivity improvement

• Lisle has worked with 20+ private equity and other investment firms conducting comprehensive due diligence on M&A deals and assisting firm leadership teams to assess growth potential, identify profit opportunities, understand critical success factors and mitigate risks across target consumer and retail businesses, as well as existing portfolio companies, to ensure successful execution

• Prior to Davies + Co., Lisle was a Partner at The Grayson Company for 11 years. Previously, Lisle was a Senior Manager at PricewaterhouseCoopers in the Retail Consulting Practice. Lisle began her career in the training program at R.H. Macy & Co.

• Lisle holds an M.B.A. from Columbia University and a B.A. in Economics from Tufts University

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About

Consolidated Investment Group is an entrepreneurial investment company that manages a diverse portfolio valued in excess of $1.5B. Since 2003, CIG has actively invested in private equity, capital markets, real estate, and philanthropy. Our mission is to preserve and grow our shareholders’ capital for current and future generations and support their philanthropic endeavors. We accomplish this through innovative processes and our results-oriented team. We are committed to an environment founded on high ethical standards that puts its people first, fosters collaboration, and inspires dedication. We invest domestically and internationally through operating partners, direct investment, and opportunistic funds.

History

In 1977, David Merage co-founded Chef America, a national frozen food manufacturer known for inventing and marketing Hot Pockets®, Lean Pockets®, and Croissant Pockets®. At the time of its sale to Nestlé in 2002 for $2.6B, the company had reached $750 million in annual sales, employed 1,800 people, and was growing at a rate of 15% per year, making it one of the most successful food companies in the world. After the sale of Chef America, David Merage founded Consolidated Investment Group.

Consolidated Investment Group

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The Family Office

• Established after sale of Chef America in 2002

Consolidated Investment Group

Real Estate Investment

Family Foundations

Capital Markets

Investment

• Over $600M gross asset value

• Direct owned and JV investments

• Valued at over $1B

• Invest across asset classes

• Public equities, fund investments, direct and venture capital

• 4 Family Foundations

• Early Learning Ventures

• Art and Community

• Israel

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PE Direct Investment Division

Investment Focus

• Direct investments in food and beverage companies

Company Size• Up to $5 million EBITDA• Obtainable EBIT margins of at least 10%

Investment Size:• $5 million to $20 million• Preferred equity• Majority ownership and board control

Geography• Continental U.S.

Investment Approach

Investment Criteria• Strong management team• Limited customer concentration• Meaningful barriers to entry• CIG partnership with management in strategic

oversight• Compelling products and business models • Innovative, high growth companies

CIG-Led Partnership Opportunities • We are a single-source capital provider who would welcome minority partners with strategic and operational expertise, if appropriate

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About

The Investment Company with the Millennial Edge • Early stage growth equity fund• Consumer product focus• Companies founded by young, driven, entrepreneurs with product concepts targeted at Millennial demographic• Strategic partnerships and value add• Board representation

Echo Capital Group

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What are some of the key trends in the consumer sector?

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Key Consumer Trends

• Health/ Wellness/ Fitness/ Beauty (older consumers)

• Sharing economy (younger consumers)

• Social media

• Consumer in the driver’s seat

– Convenience

– Speed

– Mobile

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What are some of the key trends in consumer company

transactions?

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IPOsCompany Date Comments

Rumored $20 Billion IPO adding insider shares

Rumored $1.5 Billion in revenues, $5 billion valuation

Rumored $600mm + revenue. Great Hill Partners

4/16/2014 Underwriters: MS, GS, BofA, DB. Return to public markets after 2007 take private by TPG & Silver Lake for $5 billion. Market Cap $4B

4/16/2014 Underwriters: CS, GS. Seller: PE owner, Seidler Market Cap $450 million. Outdoor sporting goods retailer. 47 stores in 18 states.

4/11/2014 Underwriters: Jefferies, Piper Jaffary, Baird. Mediterranean style food restaurants. 111 locations across 15 states

4/10/2014 Underwriters: Baird, BMO, Janney. Real estate company: row crop farmland including corn and soybean in North America

4/3/2014 Investors: Spectrum Warburg, TH Lee, Benchmark & GS, Underwriters: Citi, MS. Merged with Seamless web. Market Cap. $2.5B

3/14/2014 Sears spins off Landsend into separate public company- tracking stock

3/6/2014 Underwriters: GS, Allen, BofA. Promotional platform offering online printable, social and mobile coupons in apparel, automotive, beverages, books, food, entertainment etc. Market Cap. $1.3B

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FinancingsCompany Date Comments

4/24/2014 Hires Houlihan Lokey to review financings & strategic alternatives. Market Cap. $20 million

4/11/2014 Catterton Partners invested $10.5 million. Pittsburgh based developer of optics device creating 360 degree interactive pictures or videos.

4/2/2014 Karp Rilley purchased controlling interest. Opening 4 stores in 2014, 5-8 stores in 2015. 9 in SF, 3 in Denver.

3/26/2014 Sold 61 million shares at $.50 cents per share to make debt payments. Market Cap $119.9 million

3/24/2014 Golden Gate buys 9.5% stake, Blackrock has a 9.3% stake

3/20/2014 $27 million convertible notes with warrants. Underwriter: Cowen Existing. Investor: Clinton Group. Market Cap. $97.4 million

3/14/2014 Sycamore Partners provides $150 mm in loans and receives convertible preferred stock to buy up to 5% raising stake to 12.3%. Expands board by one member. Market Cap $374.4 million

2/18/2014 $44.1 million PIPE: Preferred stock ($20 mil), convertible notes ($24 mil). Janney. Market Cap. $59 million

2/3/2014 Perella Weinberg unsuccessful in finding buyer now looking for additional financing. Market Cap. $25 million

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Company Date Comments

4/25/2014 Buyer: Prestige Brands (PBIT). Purchase Price: $750mm + NOL of $100mm. Pro forma revs $800mm and EBITDA $300mm. Market Cap $1.65B

4/21/2014 Buyer: Clearview Capital. NCL formulates physician strength care & prestige cosmetic products

4/21/2014 Buyer: TreeHouse foods. Seller: Whitecastle Investments. Purchase price: $150 million. Canadian based market maker of carton and recartbroth soups and gravy. Revenue of $110 million

4/21/2014 Buyer: Hillshire Brand (HSH). Seller: Catterton. Purchase price $165 million. Simple clean ingredient food brand in frozen breakfast and snack foods. 2014 expected revenue $60 million

4/15/2014 DSW buys interest for $62 million. Canadian retailer of men’s, women’s and children’s footwear founded in 1952.

4/14/2014 Buyer: Castle Harlan. Seller: Prospect Partners. Nutritional food distributor to 3500 K-12 schools in CA, AZ & NV

4/11/2014 Sycamore partners plans to spin SW (footwear design firm) out of the Jones Group which it bought for $1.3 billion

4/9/2014 Buyer: Mars. P&G sells 80% of pet food unit for $2.9B (2.3 X sales).

4/6/2014 Rumors that Baidu to fully acquire Ctrip-largest online travel agency in China. Market Cap $6.5 billion

4/4/2014 Buyer: B&G Foods. Seller: American Capital. Purchase price: $155mm. Packaged foods company with $85 million in revenue and $20 million in adjusted EBITDA

4/4/2014 Buyers: Sentinel Capital. 9 company owned and 58 franchised counter service restaurants

M&As

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Company Date Comments

4/3/2014 Filed for chapter 11 with plan to sell to Spenser’s for $147 million

4/2/2014 Buyer: Lonestar Funds. Purchase price: $1.3 billion including $500 million of debt. 5.8% premium to closing stock price

4/2/2014 Hired Eastwind & Oppenheimer to look at strategic alternatives. Lender Salus Capital. Market Cap. $10 million

3/17/2014 Buyer: Bregal Partners. Seller: Norwest Equity. Performance and protective athletic equipment. Bregal had prior relationship with CEO

3/13/2014 Debt owned by Atalyla. 60 restaurants and 80 food service locations. Yucaipa involved. Chapter 11 emergence

3/10/2014 Preparing for chapter 11 filing. 140 million of debt. Closing 155 of it’s 400 restaurants

2/28/2014 Receives letter from Vintage Capital to acquire for $30.50 per share

2/27/2014 Buyer: Essilor. Purchase price: $430 million; at 43% premium. Online retailer of contact lenses and eye wear products based in Vancouver

2/4/2014 Seller: TSG. Buyer: TPG acquires majority stake in digital fast growing cosmetics brand. Estimated value $160 million. Quick flip for TSG

2/3/2014 Buyer: Knoll $95 million + earnout. Revenue $94 million. 10% + operating margin. HH designs furniture, lighting & textiles for architects

1/23/2013 Buyer: Home Depot. Blinds #1 online window coverings retailer. $100mm revenues

12/10/2013 Bain Capital acquires majority stake in Canadian winter gearmanufacturer. Founded in Toronto 1957. Had been growth raise

11/8/2013 Buyer: Elissor. Acquisition of all outstanding shares of Costa for $270 million. 19% premium. Had sold Cross Pens to Clarion

M&As

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What are some of the key trends in service and nonperishable

product companies?

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Five Macro Consumer Trends

Health, Wellness & Fitness

Mobile Devices & Accessories

Hospitality, Resort & Travel (Destinations)

Leisure & Recreation (Home & Community)

Consumer Aspirational Purchases

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Five Critical Strategic Considerations

Brand Equity

Omnichannel Retailing

Social Media & Connectivity

Affinity & Loyalty Programs

Big Data

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Attractive Investment Targets

Later Stage Businesses in Transition

Family, founder, or legacy owners/management

Owners unable or unwilling to invest in the future growth of the business

Owners seeking a partial or total exit No clear succession plan

Early Stage Businesses With Proven Economics

Dynamic and talented management team Infrastructure requires significant

enhancement Business can significantly benefit from

outside expertise and experience

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What are some of the key trends in food and beverage

companies?

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Industry Trends and Challenges

Growing Trends in F&B• Better for you

• Natural beverages (Coconut water, natural energy, naturally sweetened, kombucha)

• Fresh grab-and-go, Prepared Foods • All natural (slippery slope term), Organic, Non-GMO, GF, Kosher • Healthy snack, Savory

• Healthy cooking at home• Cooking/Crockpot kits• Instant side dish kits

• Ethnic: Hispanic, Asian, Fusion• Super food trends: Quinoa, Acai, Hemp, Protein, Kale • Positioning for a younger consumer demographic (Millennials) • Food and technology merge

Challenges• Identifying between long-term trends and fads • Trends that are nationally scalable versus niche and selective• Product labeling challenges• Staying ahead of the curb of what young consumers want• Fresh, grab-and-go, non-GMO, etc often means more expensive for the

consumer and more labor intensive for the manufacturer • Sales channels are shifting

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Which retail players are winners and which are losers?

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How is the younger demographic impacting the market?

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• They’re driving…

– Sharing economy

– Omni channel

– Use of technology

– Social media

– Sales to web

– Sales to mobile

– Experiences vs. products

Influence of millenials?

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What types of valuations are you seeing on consumer deals?

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Q&A with the Panel

• Please submit your questions via “Q&A” to “All Panelists”

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Thank you!

• You will receive:– Survey about today’s webinar

– Contact information for our panel

– Link to a recording of today’s webinar

• Questions? Contact Nick Zobel (nick@opusconnect.com)– Qualified potential members are invited to attend TWO Opus

Connect chapter meetings free of charge.

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