Newly Acquired Risk: What Executives Should Know Post-Acquisition

M&A insight within the food & beverage industry sheds light for executives in other manufacturing categories

Excerpt from Industry Today:

High Merger & Acquisition Activity Continues in Food & Beverage
As food and beverage companies continue to face disruptive pressures – in large part spurred by changing consumer preferences, with an increased demand for organic and natural products – the industry is being forced to adapt. Acquisitions are increasingly helping food companies expand their product lines, increase efficiencies, meet consumer demand and maintain market share. According to Mergers & Acquisitions, the U.S. food industry saw $42 billion in deals in 2017, and deal activity within the food and beverage industry has remained active in 2018.

“There are a lot of emerging trends in food, especially with the increase in demand for healthy and organic brands,” says Jeff Wahba, former co-chief executive officer and chief financial officer of Farmer Brothers Co (NASDAQ: FARM), a $600 million national manufacturer of coffee, tea and culinary products. “It’s generally a lot cheaper for a food company to buy a brand that already has some momentum in a desired channel, rather than having to start from scratch.”

This sentiment aligns with data from a recent survey conducted by Mortenson, in which 67 percent of CFOs surveyed say that mergers and acquisitions (M&A) was likely for their company in the next three years.