1、CONSUMER HEALTH AND WELLNESSA Return to FundamentalsLeading Independent,Global Advisory FirmHoulihan Lokey is the trusted advisor to more top decision-makers than any other independent global investment bank.2,500+35$6.5B+$1.8B25%NOEMPLOYEESLOCATIONSMARKET CAP(1)ANNUAL REVENUE(2)EMPLOYEE-OWNEDDEBT(1

2、)As of January 2023.(2)LTM ended December 31,2022.Source:Refinitiv.Excludes accounting firms and brokers.Source:Refinitiv.Source:Refinitiv.Announced or completed transactions.Source:PitchBook.Corporate Finance No.1 Global M&A Advisor Under$1 Billion Leading Capital Markets Advisor Raising More Than$

3、100 Billion in Past Five Years2022 M&A Advisory Rankings Global Transactions Under$1 Billion1 Houlihan Lokey2 Rothschild 3 JP MorganAdvisorDeals381369217Financial and Valuation Advisory No.1 Global M&A Fairness Opinion Advisor Over the Past 25 Years 1,000+Annual Valuation Engagements1998 to 2022 Glo

4、bal M&A Fairness Advisory Rankings1 Houlihan Lokey2 JP Morgan3 Duff&Phelps,A Kroll BusinessAdvisorDeals1,2321,030938Financial Sponsors Coverage No.1 Global Advisor to Private Equity Firms 1,000+Sponsors Covered Globally2022 Most Active Global Investment Banks to Private Equity Firms1 Houlihan Lokey2

5、 Lincoln International3 DeloitteAdvisorDeals242192190Financial Restructuring No.1 Global Restructuring Advisor$3.0 Trillion of Aggregate Transaction Value Completed2022 Global Distressed Debt&Bankruptcy Restructuring Rankings 1 Houlihan Lokey2 PJT Partners3 LazardAdvisorDeals583029North AmericaAtlan

6、taBostonChicagoDallasHoustonLos AngelesMiamiMinneapolisNew YorkSan FranciscoWashington,D.C.Europe and Middle EastAmsterdamDubaiFrankfurtLondonMadridManchesterMilanMunichParisStockholmTel AvivZurichLEADING GLOBAL INDEPENDENT INVESTMENT BANKAsia-PacificBeijingFukuokaGurugramHo Chi Minh CityHong Kong S

7、ARMumbaiNagoyaOsakaShanghaiSingaporeSydneyTokyo2022 M&A Advisory RankingsAll U.S.Consumer,Food&Retail Transactions1 Houlihan Lokey2 Goldman Sachs3 William Blair4 JP Morgan5 Lincoln International5 Robert W Baird1817161313AdvisorDeals21Source:Refinitiv based on 2022 number of transactions.Excludes acc

8、ounting firms and brokers.No.1 M&A AdvisorAll U.S.Consumer,Food&Retail TransactionsBold denotes Consumer,Food&Retail(CFR)team.14130+100+350+LOCATIONS WORLDWIDECONSUMER,FOOD&RETAIL BANKERSTOTAL CONSUMER,FOOD&RETAIL DEALS PAST THREE YEARSCROSS-BORDER TRANSACTIONS SINCE 2011 3Consumer Health and Wellne

9、ss:A Return to FundamentalsThe consumer health and wellness sector saw a surge of M&A activity over the past 10 years,with transaction volume peaking in 2021 as the COVID-19 pandemic drove appetite for products supporting health and longevity.2022,however,was a markedly different story,with companie

10、s facing a number of headwinds impacting both revenue and profitability.The result was an increasingly high bar for M&A,with fewer deals getting done and a mixed bag of valuations,leaving many to question what is in store for this year.In this piece,we share insights into the decrease in activity ov

11、er the past year and discuss what it means for M&A and valuations in 2023.We will highlight the key trends and specific criteria that can position a company for strong interest and value in todays environment.42022 Year in Review:The COVID-19 HangoverConsumer health and wellness was a fantastic plac

12、e to be through COVID-19 and its aftermath,with categories like VMS seeing a whopping$11.2 billion in incremental sales volume between 2019 and 2021,up more than 23%from pre-COVID-19 levels.The industry saw this growth normalize in 2022,as total sales volumes for the year are estimated at$60.9 billi

13、on,up 1.7%versus 2021.Susan Roddy,Managing Director in Houlihan Lokeys Consumer,Food&Retail Group,noted:“In 2022,softer consumer demand meant flat to declining revenue for many companies in the space,along with a disproportionate impact to the bottom line as costs continued to rise.”$36.7$38.8$41.2$

14、43.4$46.1$48.7$55.7$59.9$60.9$61.6 20142015201620172018201920202021 2022E 2023EVMS Category Growth($in billions)Source:Nutrition Business Journal 2022.Consumer Health and Wellness M&A505047517565516393512013201420152016201720182019202020212022(Number of closed deals)Source:PitchBook.“The deal enviro

15、nment was further burdened by a gap in valuation expectations between sellers and buyers,along with constrained credit markets limiting capital availability.All of these factors together resulted in a significant decline in M&A activity for the year.”52023 Expectations:A Return to FundamentalsSo,wha

16、t does this mean for 2023?Houlihan Lokey expects 2023 to mark a return to fundamentals,both in terms of business models and valuations.Here,we share key insights into what will drive buyer and investor interest in the coming year and how to maximize value in todays market environment.DTC Is Out;Omni

17、channel Is In2022 was the year of reckoning for many DTC brands.Increasing ad costs on Facebook,combined with worsening ad measurement(Apples iOS 14 privacy changes),were a struggle for most DTC companies,with many also facing supply chain challenges and increased shipping costs.In response,many DTC

18、 brands flocked to brick-and-mortar,looking for alternative channels to drive growth and profit.The results for most remain to be seen,but the takeaway is clear:2023 will be the year of omnichannel,as strategic and financial investors alike look to de-risk channel dependence and pursue investments i

19、n companies with a more balanced approach to driving profitable growth.This does not mean that all is gloom and doom in DTC land.“Brands that are digitally native,tech-forward,and adept at gathering and leveraging consumer data will continue to be valuable,especially if they can do so profitably.”Pr

20、ofitability Over GrowthPerhaps the most dramatic change over the past 12 months has been how buyers view the P&L.Eighteen months ago,investors were chasing high-growth assets,with a much more forgiving view toward profitability.“We knew we were at the top of the market when revenue multiples became

21、the new baseline for valuation,”said Susan Roddy.“More recently,there has been a noticeable shift in the types of opportunities that are attracting strong interest in the market.Buyers are looking for proven resiliency and a track record of sustained profitability.”Growth will still be a considerati

22、on,but it is no longer prioritized at the expense of the rest of the P&L.“Understanding how buyers will look at your size,growth,and margin profile is critical as you think about timing to approach the market,”said Roddy.“We like to develop relationships with companies early so we can help them plan

23、 ahead for an optimal exit.”6Womens Health and Personal CareNatural OTC and Clean MedicineSexual Health and Well-BeingHealthy AgingCognitive and Brain HealthWell-Being IngredientsCategories to Watch in 2023What Do We Expect From Buyers?The M&A bar remains high in 2023 as rising inflation,tight credi

24、t,and broader market sentiment have subdued the go-go activity we saw in 2021,but Houlihan Lokey remains bullish on the sector.We expect continued appetite from the large global strategics who are flush with cash and tend to take a longer-term view toward portfolio growth.The consumer health and wel

25、lness sector remains an attractive sector in which to invest,despite softer demand and earnings volatility in the near term.Large CPG players like Nestl and Unilever will continue to invest in high-quality assets that provide incremental capabilities or fill a white space gap in their portfolios.Lik

26、ewise,the newly independent consumer health divisions of large pharma,like Haleon and Kenvue,will be motivated to add higher-growth brands in attractive subsegments.Despite the current environment,premium assets are still garnering significant attention in the market and Houlihan Lokey expects M&A a

27、ctivity to rebound in 2023.Standing Out From the CrowdIn todays environment,buyers are taking a much more disciplined approach to reviewing acquisitions,and being able to articulate clear points of differentiation is important.Houlihan Lokey sees a number of key trends and attributes driving deal ac

28、tivity this year.Millennial Mom will continue to be a coveted consumer demographic,as will the brands who speak to her with clean labels,transparency,and better-for-you product attributes.We also see a huge opportunity in healthy aging,particularly for brands targeting condition-specific categories

29、like cognitive,heart health,blood pressure or circulation,and menopause.Womens health and femtech are ripe for investment from both strategic buyers and financial investors.“We continue to see buyers place a premium on science,and this is especially true in nutritional supplements.Products backed by

30、 patents or clinical trials are relatively unique and may be valued at a premium.Doctor or pharmacist recommended claims,if substantiated,can also be indicative of trust and credibility.We also see interest in innovative products or formats,including novel ingredients,unique delivery methods,or prod

31、ucts with enhanced absorption or bioavailability.”While it is tempting to“do it all,”Roddys advice to growing brands today is“focus over breadth.”Generally speaking,buyers are much more interested in seeing established market leadership in one or two categories than presence across many.7Spotlight o

32、n Well-Being Ingredients Just as Houlihan Lokey expects an uptick in M&A activity among standout brands,Houlihan Lokey also expects an uptick in M&A activity in another complementary area of the consumer health value chainwell-being ingredients.As brands continue to seek evolution,innovation,and dif

33、ferentiation,companies that develop and manufacture high-impact specialty ingredientsthe sources of key sensory,functional,or nutritional attributes in the finished productsare increasingly prized partners.M&A involving larger and middle-market companies in this area of the value chain has been acti

34、ve in the past and could pick up again as both larger companies and investors seek to address growing consumer demand in key categories.“There is noteworthy innovation and differentiation among the developers and manufacturers of specialty ingredients that supply consumer health brands,”said Tim Lar

35、sen,Managing Director in Houlihan Lokeys Consumer,Food&Retail Group focused on well-being ingredients.“Closely connected to the categories that Susie highlighted as intriguing for consumer health brands,we would expect to see growing interest and activity in specialty ingredients for areas pertainin

36、g to the braincognitive performance,mental health,optical healthas well as ongoing activity in microbiome health and other lifestyle-focused segments.”8Maximizing Value in Todays Environmenthas been acquired bySellside AdvisorDikey Vitamin Grouphas sold a minority stake and entered into a strategic

37、partnership withSellside Advisora portfolio company ofhas been acquired bySellside Advisora portfolio company ofhas been acquired bySellside Advisorhas been acquired by Sellside Advisorhas been acquired bySellside Advisorhas been acquired bySellside Advisora portfolio company ofhas been acquired byS

38、ellside Advisora portfolio company ofhas been acquired bySellside AdvisorA controlling interest inhas been acquired bySellside Advisora portfolio company ofhas been acquired bySellside Advisora portfolio company ofhas been acquired bySellside Advisor“It is more important than ever to plan ahead for

39、an exit,”said Susan Roddy.Those who are weathering todays dynamic environment may be uniquely positioned to approach the market.With more than 15 years of dedicated coverage to the consumer health and wellness sector,Houlihan Lokey is a market leader in sellside advisory with a unique focus on helpi

40、ng founders and entrepreneurs achieve their aims and objectives.Houlihan Lokeys dedicated team focuses exclusively on consumer health and wellness,allowing them to leverage years of experience advising companies for their capital-raising or sellside needs.Tombstones included herein represent transac

41、tions closed from 2018 forward.9Houlihan Lokey ContactsTim LarsenManaging DirectorChicago312.456.4786TLarsenHL.comGaryth StoneManaging DirectorLondon+44(0)20 7747 7580GStoneHL.comChanChan WangDirectorLondon+44(0)20 7747 7585CCWangHL.comSusan RoddyManaging DirectorNew York212.497.4195SRoddyHL.comMori

42、tz von BodmanManaging DirectorMunich+49(0)89 413 121 32 Moritz.BodmanHL.comNorth AmericaEurope10Disclaimer 2023 Houlihan Lokey.All rights reserved.This material may not be reproduced in any format by any means or redistributed without the prior written consent of Houlihan Lokey.Houlihan Lokey is a t

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45、nd regulated by the German Federal Financial Supervisory Authority(Bundesan-stalt fr Finanzdienstleistungsaufsicht);(iii)the United Arab Emirates,Dubai International Financial Centre(Dubai):Houlihan Lokey(MEA Financial Advisory)Limited,regulated by the Dubai Financial Services Au-thority for the pro

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50、sional clients(UK,EEA,and Dubai),accredited investors(Singapore),professional investors(Hong Kong),and wholesale clients(Australia),respectively.Other persons,such as retail clients,are NOT the intended recipients of our communications or services and should not act upon this communication.Houlihan

51、Lokey gathers its data from sources it considers reliable;however,it does not guarantee the accu-racy or completeness of the information provided within this presentation.The material presented reflects information known to the authors at the time this presentation was written,and this information i

52、s subject to change.Any forward-looking information and statements contained herein are subject to various risks and uncertainties,many of which are difficult to predict,that could cause actual results and developments to differ materially from those expressed in,or implied or projected by,the forwa

53、rd-looking information and statements.In addition,past performance should not be taken as an indication or guarantee of future per-formance,and information contained herein may be subject to variation as a result of currency fluctuations.Houlihan Lokey makes no representations or warranties,expresse

54、d or implied,regarding the accuracy of this material.The views expressed in this material accurately reflect the personal views of the authors re-garding the subject securities and issuers and do not necessarily coincide with those of Houlihan Lokey.Officers,directors,and partners in the Houlihan Lo

55、key group of companies may have positions in the secu-rities of the companies discussed.This presentation does not constitute advice or a recommendation,of-fer,or solicitation with respect to the securities of any company discussed herein,is not intended to provide information upon which to base an

56、investment decision,and should not be construed as such.Houlihan Lokey or its affiliates may from time to time provide investment banking or related services to these com-panies.Like all Houlihan Lokey employees,the authors of this presentation receive compensation that is affected by overall firm profitability.Corporate Finance Financial Restructuring Financial and Valuation Advisory HL.com