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Sell-Side: DTCF Leverages Food & Beverage Experience to Successfully Complete Carve-Out Transaction

Deloitte & Touche Corporate Finance LLC

Abstract

A multi-billion dollar food and beverage manufacturer was looking to divest its flavored and functional water and juice brands. Deloitte & Touche Corporate Finance LLC* (“DTCF”) was chosen to be the exclusive sell-side financial advisor to the company. DTCF identified several potential strategic and private equity acquirers, assisted the company in developing carve-out financials and helped execute a transaction that included both brands as well as the related manufacturing and operating assets.

Challenge

The brands lacked scale and were viewed as non-core assets by the client. As a result, the brands did not receive a significant level of focus and investment. Additionally, many potential buyers were only interested in acquiring the water brand and viewed the under utilized manufacturing assets as a liability. Complex carve-out issues including assisting the client with the development of stand-alone brand financial information and assisting with the negotiation of a host of ancillary agreements including the transition service agreement and co-manufacturing agreements added to the complexity of the transaction.

Approach

DTCF was able to identify a buyer that understood the opportunity the brands presented.  The buyer was willing to dedicate the required resources for future development and agreed to acquire the manufacturing assets including any potential severance costs. The DTCF team paired its industry and complex carve-out experience to bring the parties to a completed deal.

Solution

Through our deep coverage of the food and beverage sector, credentials in completing middle-market transactions, and strong track-record advising clients on carve-out transactions, DTCF was able to help our client close the transaction timely and effectively.

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