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Fairness Opinion Detail

MJN FOOpen source

Mead Johnson Nutrition Company to Reckitt Benckiser Group plc

Packaged Foods/Feb 2017/Goldman Sachs, Morgan Stanley

Deal Information

Target
Mead Johnson Nutrition Company
Acquiror
Reckitt Benckiser Group plc
Sector
Packaged Foods
Target Type
Public
Acquiror Type
Strategic
Advisors
Goldman Sachs, Morgan Stanley

Transaction Metrics

Enterprise Value
$17.9B
EV / LTM Sales
EV / LTM EBITDA
17.4x
EV / Fwd EBITDA

Advisor Transaction Comparables

Comparable transactions cited by the advisor, excluding the subject transaction.

Advisor: Goldman Sachs

EV/LTM EBITDA selected range: 15.5x - 20.7x

19 comps
Apr 2012Pfizer Nutrition
Due to unavailability of LTM EBITDA, Goldman Sachs used actual 2011 EBITDA for Pfizer Nutrition.
Nestlé Group--23.7x-
Jul 2007Royal Numico N.V.Groupe Danone S.A.--24.4x-
Apr 2007Gerber
Due to unavailability of LTM EBITDA, Goldman Sachs used estimated 2007 EBITDA for Gerber.
Nestlé Group--15.7x-
Dec 2006Novartis Medical Nutrition
Due to unavailability of LTM EBITDA, Goldman Sachs used estimated 2006 EBITDA for Novartis Medical Nutrition.
Nestlé Group--17.6x-
Nov 2005EAC Nutrition
Due to unavailability of LTM EBITDA, Goldman Sachs used annualized third quarter 2005 EBITA for EAC Nutrition. Note: metric is EBITA, not EBITDA.
Royal Numico N.V.--25.0x-
Feb 2005Mellin S.p.A
Due to unavailability of LTM EBITDA, Goldman Sachs used actual 2004 earnings before interest, tax and amortization (EBITA) for Mellin S.p.A. Note: metric is EBITA, not EBITDA.
Royal Numico N.V.--13.8x-
Jul 2016Whitewave Foods Co.Groupe Danone S.A.--23.4x-
Jul 2016SAB Miller plcAnheuser-Busch InBev SA/NV--16.1x-
Dec 2015Keurig Green Mountain Inc.JAB Holding Company--12.7x-
Mar 2015Kraft Food Group, Inc.H.J. Heinz Company--12.5x-
Jul 2014Hillshire Brands CompanyTyson Foods, Inc.--16.7x-
Apr 2013D.E. Master Blenders 1753Joh. A. Benckiser--18.2x-
Feb 2013H.J. Heinz Company3G Capital and Berkshire Hathaway--13.9x-
Jan 2010CadburyKraft Foods Inc.--13.0x-
Jul 2008Anheuser-Busch Cos.InBev SA--15.5x-
Apr 2008Wm. Wrigley Jr. CompanyMars Inc.--18.5x-
Jul 2007Danone Biscuits
Due to unavailability of LTM EBITDA, Goldman Sachs used actual calendar year 2006 EBITDA for Danone Biscuits.
Kraft Foods Inc.--13.1x-
Dec 2000Quaker Oats CompanyPepsiCo Inc.--15.6x-
Jun 2000Bestfoods CorporationUnilever plc--14.3x-
Mean-17.0x-
Median-15.7x-

Advisor: Morgan Stanley

AV/EBITDA (LTM) selected range: 15.0x - 20.0x

12 comps
Jul 2016Whitewave Foods Co.Groupe Danone S.A.--23.4x-
Dec 2015Keurig Green Mountain Inc.JAB Holding Company--12.7x-
Mar 2015Kraft Food Group, Inc.H.J. Heinz Company--12.5x-
Jul 2014Hillshire Brands CompanyTyson Foods, Inc.--16.7x-
Apr 2013D.E. Master BlendersJoh. A. Benckiser--18.2x-
Feb 2013H.J. Heinz Company3G Capital and Berkshire Hathaway--13.9x-
Dec 2010Wimm-Bill-Dann FoodsPepsiCo Inc.--16.2x-
Jan 2010CadburyKraft Foods Inc.--13.0x-
Apr 2008Wm. Wrigley Jr. CompanyMars Inc.--18.5x-
Jul 2007Danone BiscuitsKraft Foods Inc.--13.1x-
Dec 2000Quaker Oats CompanyPepsiCo Inc.--15.6x-
Jun 2000Bestfoods CorporationUnilever plc--14.3x-
Mean-15.7x-
Median-14.9x-

DCF Assumptions

Discount rate and terminal value assumptions the advisor selected for its discounted cash flow analysis.

Goldman Sachs

Open
WACC
7.75% – 8.25%
Terminal method
Perpetuity growth
Terminal assumption
2.75% – 3.25%
Forecast basis
Forecasts (Management Forecasts), unlevered free cash flow
Forecast period
fiscal years 2017 through 2021

Morgan Stanley

Open
WACC
6.2% – 7.8%
Terminal method
Exit multiple
Terminal assumption
12.0x – 15.0x (NTM EBITDA)
Forecast basis
Forecasts and Consensus Case
Forecast period
calendar years 2017 through 2021
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