Smithfield Foods, Inc. to Shuanghui International Holdings Limited

Packaged Foods/May 2013/Barclays

Deal Information

Target

Smithfield Foods, Inc.

Acquiror

Shuanghui International Holdings Limited

Sector

Packaged Foods

Target Type

Public

Acquiror Type

Strategic

Advisors

Barclays

Enterprise Value

$7.1B

EV / LTM Sales

EV / LTM EBITDA

9.3x

EV / Fwd EBITDA

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

Transaction Value / LTM EBITDA selected range: 7.0x - 8.0x

8 comps


May 2010	Michael Foods Group	The Goldman Sachs Group, Inc.	-	-	7.7x	-
Sep 2009	Pilgrim's Pride Corp.	JBS SA	-	-	8.0x	-
Jun 2008	Starkist	Dongwon F&B Co., Ltd.	-	-	7.8x	-
May 2007	Swift & Co.	JBS S.A.	-	-	7.7x	-
Sep 2006	Premium Standard Farms, Inc.	Smithfield Foods, Inc.	-	-	6.0x	-
Jul 2006	ConAgra Foods, Inc. Branded Meats Business	Smithfield Foods, Inc.	-	-	5.8x	-
Jun 2006	Sara Lee Corp. European Meat Business	Smithfield Foods, Inc.	-	-	6.0x	-
Jan 2001	IBP, Inc.	Tyson Foods, Inc.	-	-	7.3x	-
	Mean			-	7.0x	-
	Median			-	7.5x	-

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

2 DCF scenarios

WACC: 8.0%
Terminal method: Exit multiple
Terminal assumption: 6.0x – 7.0x (EV/EBITDA, period ending 2018-12-31)
Forecast basis: Smithfield management projections - Management Sensitivity 1 (EBITDA margin -100bp)
Forecast period: FY2014 through FY2018 (FY2018 extrapolated by Barclays)

Advisor	WACC	Terminal method	Terminal assumption	Forecast basis	Forecast period	Filing
Barclays	7.5% – 8.5%	Exit multiple	6.0x – 7.0x (EV/EBITDA, period ending 2018-12-31)	Smithfield management projections - Management projections	FY2014 through FY2018 (FY2018 extrapolated by Barclays)	Open
Barclays 2 DCF scenarios	8.0%	Exit multiple	6.0x – 7.0x (EV/EBITDA, period ending 2018-12-31)	Smithfield management projections - Management Sensitivity 1 (EBITDA margin -100bp)	FY2014 through FY2018 (FY2018 extrapolated by Barclays)	Open