How to Attract Strategic Buyers for F&B Businesses

Who is going to buy your business? Plenty of people will buy your business. There is a massive market of "unsophisticated" investors browsing the internet right now, looking to "buy a job” or a small bolt-on to their business. They are active, they are eager, and they typically transact at multiples of up to 3x earnings. There is nothing wrong with that market. It serves a purpose. But if you want to break through that ceiling and achieve significantly higher valuation multiples, you need to attract large Strategics, it’s as simple as that. Strategic buyers aren't buying a job. They are buying the future. They are paying for synergy, scale, market share or IP. But here is the catch: You have to build what they want to buy. If you haven't engineered your business to fit their specific mandates, be it compliance, scale, customer type, or capability etc… you limit your exit value before you even start. We see this mistake often. I have seen businesses make decisions that grew their revenue in the short term but actually detracted from their strategic exit value. Take a Food Distribution business as an example: If you focus on "Food Service" (restaurants/cafes/pubs) but then decide to chase volume by expanding into Supermarkets (Retail), you might increase revenue, but you often decrease the multiple. Why? Because the ultimate strategic buyer is most likely a dedicated Food Service giant. By muddying the waters with low-margin, slower paying retail contracts, you make the asset less attractive to the highest bidder. I have seen this. We spend every day negotiating with the pool of acquirers who pay for quality: -Private Equity firms looking to back management teams to scale. -HNW Family Offices deploying patient capital for generational wealth. -National & Multinational Corporates needing to buy innovation or market share because it’s faster than building it. In the last 12 months, we have transacted clients with these types of strategic acquirers: ✅ ARA Group – An AUS/NZ employee-owned Facility Maintenance group with over 4,000 employees. ✅ Roc Partners – Managing over $9.3B, backing high-growth assets. ✅ Retail Food Group (RFG) – The ASX-listed multi-brand food franchisor. ✅ Apta Group – Agile Private Equity unlocking SME growth. ✅ Adenes Group – A global leader in insurance loss adjusting. ✅ See Differently (Royal Institute for the Blind) – Major Not-For-Profits expanding strategically. ✅ Straight Bat Private Equity – "Patient capital" investors. And right now? We currently have businesses under offer with: a Singaporean Conglomerate, a Global Leader in Sustainable Water Solutions, and a Strategic Investment Firm rolling up the Infrastructure Services sector. In summary, build a business that fits the mandate of a strategic buyer. If you know who pays the best value, you can build exactly what they are looking for. EP Advisors #MergersAndAcquisitions #ExitStrategy #BusinessValue #MidMarket #StrategicBuyers

I've been on both sides of the table in over 100 M&A deals. As a buyer, I said no to thousands of businesses in the first five minutes. As a seller, I positioned companies for maximum value and exited successfully. Here's what I learned: Premium buyers don't just look at your financials. They're pricing something deeper. Four criteria separate businesses that attract serious offers from those that don't: 1. Transferable operations Can the business run without you? If you're the rainmaker, the relationship holder, or the one who knows where everything is, you don't have a business. You have a job. Premium buyers pay for systems, not dependencies. 2. Documented processes When I walked into a business as a buyer, I looked for proof the company knew how it made money. If the owner said "it's all in my head" or "my team just knows what to do," I was already halfway out the door. Buyers need to see the playbook. Without it, they're buying a black box. 3. Trained team that executes A strong team isn't just talented people. It's people who can operate independently and consistently. If your business falls apart when you take a two-week vacation, you're not ready to sell. Buyers want to know the machine keeps running after you leave. 4. Predictable revenue streams One-off projects and lumpy revenue are red flags. Buyers pay multiples for predictability. Recurring contracts, repeat customers, or reliable deal flow all signal lower risk. The more predictable your cash flow, the higher your valuation. When you nail these four, three things happen: ~Your business becomes an asset, not a liability tied to your personal effort. ~You attract buyers who compete for your deal instead of negotiating you down. ~You walk away with real wealth, not just a modest exit that reflects all the risk you're leaving behind. I've seen founders leave millions on the table because they waited too long to build these four things. Don't be one of them. Start now, even if a sale is years away. The businesses that command premium valuations don't get built in the months before a deal. They get built in the years of disciplined operation before anyone's watching.

When a Strategic Buyer looks at your company, they aren't just seeing what you are... they are calculating what you could be in their hands. This is called Synergy, and it is the primary justification for high M&A premiums. There are two main types you need to articulate in your pitch: 1. Cost Synergies (The "Hard" Numbers) These are efficiency gains, cutting redundant costs. • Examples: Closing duplicate headquarters, streamlining supply chains, or combining R&D teams. • Why it matters: These are "hard" synergies because they are high-confidence. Buyers pay for these because they can practically guarantee the savings. When Exxon merged with Mobil, they generated over $5 billion in cost synergies by eliminating overlaps. 2. Revenue Synergies (The "Soft" Numbers) This is about growth, selling more together than you could alone. • Examples: Cross-selling your software to their enterprise clients or using their global distribution network for your local product. • The Case Study: When Disney acquired Pixar, it wasn't just for the movies. It was for the ability to push Pixar characters through Disney theme parks and stores—massive value creation neither could achieve alone. The Founder’s Job Buyers often underestimate synergies to protect their ROI. Your job is to "document the opportunities". Don't just list your features; quantify how your technology reduces their costs or how your IP accelerates their roadmap. Cost synergies are realized faster, but Revenue synergies offer the highest theoretical ceiling. If you can prove the math on both, you force the buyer to raise their Maximum Allowable Purchase Price.

I analyzed over 200 strategic M&A deals from food & beverage deals from the last TEN YEARS Why? To give YOU the roadmap on what it takes to sell your brand to a strategic buyer, and to who & for how much Let's get into it👇 1/ Who is going to buy your brand? The most active acquirer in F&B over the last 10 years has been Hershey, with a deal per year. Then, Pepsico with 7. Ferrero group with 7. After that it drops off and it could be anyone. Coca Cola is surprisingly not that active (for now..) 2/ How much are they paying? Hershey's avg deal is $637m, or 13x EBITDA & 4x sales. Pepsi's avg deal is $1.2B, they tend to disclose less on valuation multiples, but think ~$500m+ revenue to move the needle on Pepsi's nearly $100b in revenue. Ferrero - tends to pay more for larger deals, 15x+ EBITDA and in the billions. 3/ Which subcategories are most popular? In order: 1) Snacks 2) Beverage 3) Candy 4/ Durability Matters The median years in business from the analyzed deals for the target company was 17 years. There are of course exceptions: 1) Kevin's Natural Foods (Mars) - 4 years 2) Sour Strips (Hersheys) - 5 years 3) Alani Nu (Celsius) - 7 years 5/ Diversification is key One thing you'll notice is that most of these acquired brands represent some sort of non-core business line -Poppi as better for you soda to traditional soda company Pepsi - LesserEvil as better for you snacking to traditional snacking Hershey - Power Crunch - protein brand going to a candy company (Ferrero) So, the moral of the story is basically; Scale a snacks or beverage brand with some sort of next gen twist to low 9 figures in revenue and you are in the ultimate sweet spot for being acquired by a strategic. Tomorrow I'll be posting a similar analysis for the Beauty & Personal care industry so make sure to follow me. Plus, in my Friday newsletter I'll be consolidating Food & Beverage, Beauty & Personal Care, Apparel, and Health/Wellness into one mega newsletter that breaks down all the M&A trends across all of consumer products. A can't miss if you're a founder, investor, operator, or acquirer. Subscribe at the link pinned to my profile 🙂

After The State Plate got acquired by JustMyRoots, a lot of people have asked me about the process of looking for potential buyers and the mechanics of the deal. I wanted to share our learnings for the first part of the question & maybe will delve deeper into the second sometime later. Once you have decided that you are looking for a strategic investor/acquirer, you try to step into the shoes of an acquirer and see what merits they can find in you. You list down all the good things/assets your startup can offer. It can be anything - IP, brand value & goodwill, distribution, product, customer base, profitable P&L, amazing team and so on. Post this, you pick each of these identified assets and see which kind of company would benefit from having that asset in their current range of offerings. At TSP, we identified food aggregator platforms, FMCG conglomerates, cloud kitchen brands and some more as our target sectors. Then, you prepare a compelling story of why it's a win-win situation for both the entities. Both financially and non-financially. And then, you start speaking to these companies directly or engage an investment banker to do the same for you. In our case, we did both. Once there is a clear interest from both the ends, you sit & finalise the mechanics of the deal and the entities happily partner. I hope this helps founders who are looking to partner & grow their company. Happy to discuss in detail if it can be helpful :)