Private equity (“PE”) activity in the food and beverage sector continues at a torrid pace. Attracted to high-growth and fast markets, PE buyers seek typically to infuse capital, increase capacity and productivity, and quickly grow market share. Though not exclusively so, the acquired entities tend to be micro-to-small cap operators, privately-held, often family-owned, with energetic and visionary leaders. Of keen interest are food products and beverages perceived to be ready to eat and more healthy, vis-à-vis less processing, organic origins, and infused with functional ingredients or exotic spices and flavors.

Leading the Charge

Global Food Properties is a leading advisor to PE buyers, advising on plant valuations, in the M&A context or in the event of a disposition; inventorying available expansion options, to include both publicly and privately available properties; and working alongside tax counsel on the aggressive appeal of food property taxes, which as often as not ignore basic valuation practices leading to dramatic overpayment. Who you choose matters, as expertise in nuanced food facilities is not a commodity expertise.

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Avoiding Mistakes Along the Way

The most common pitfall is relying on generalist brokers for advice on nuanced and infrastructure-heavy production plants. Food safety and the necessity of throughput as the antidote to thin margins are impacting occupancy and values in ways heretofore unseen; generalist brokers do not have eyes on this fast moving dynamic, and cannot comment on the role machinery, equipment, and previous use will play in a transaction.  

Tax.png#asset:956Likewise, and as referenced above, if PE owners are not strategic in appealing property taxes, money is being left on the table. Global Food Properties works alongside the best tax attorneys in the field, providing compelling expert or rebuttal testimony on the relevance of market comparables, the most dispositive indicia of value but the one least relied upon by most tax assessors.

Aligned with the Right Team

Global Food Properties is aligned with several expert tax litigators, most of whom work on a contingency of the taxes saved or reclaimed retroactively; hence, risk and expense are nominal if existing at all. Current and past clients include Treehouse Foods, General Mills, Hormel Foods, and the National Sugar Beet Association.