Sectorwatch: Consumer Retailers - 7 Mile Advisors - February 2021
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7 Mile Advisors Sectorwatch: Consumer Retailers February 2021
Consumer Retailers
7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only in
conjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document.
All data cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor 2
7M Securities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treated
as confidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error.Overview DASHBOARD
• Summary metrics on the sector
• Commentary on market momentum by comparing the
most recent 12-month performance against the last 3-
year averages.
PUBLIC BASKET PERFORMANCE
• Summary valuation and operating metrics for a basket of
We advise on M&A and private capital transactions and provide market comparable public companies.
assessments and benchmarking. As a close-knit team with a long history
together and a laser focus on our target markets, we help our clients sell
their companies, raise capital, grow through acquisitions, and evaluate new
markets. VALUATION COMPARISON
We publish our sectorwatch, a review of M&A and operational trends in • Graphical, detailed comparison of valuation multiples for
the industries we focus. the public basket.
RECENT DEALS
• The most recently announced deals in the sectorDashboard
1 - year revenue growth compared to revenue growth average for last 3 years - Current revenue
growth rate exceeds the average of the last 3 years by this amount, indicating that market
momentum is increasing
4Public Basket Overview
Consumer Retailers
5Public Basket
Amazon.com 1,690,410 45,291 347,945 31.1% 25.2% 13.0% 4.9x 37.3x 798,000 436
Walmart 454,261 34,419 548,743 5.3% 24.8% 6.3% 0.8x 13.2x 2,200,000 249
The Home Depot 317,150 20,046 125,631 13.2% 34.0% 16.0% 2.5x 15.8x 415,700 302
Costco Wholesale 151,490 8,019 172,929 11.8% 13.2% 4.6% 0.9x 18.9x 273,000 633
Lowe's Companies 135,835 10,937 85,313 18.9% 32.9% 12.8% 1.6x 12.4x 320,000 267
Target 100,748 9,010 88,621 14.1% 29.2% 10.2% 1.1x 11.2x 368,000 241
Walgreens Boots Alliance 82,584 7,171 141,504 3.0% 19.7% 5.1% 0.6x 11.5x 331,000 428
Kroger 44,122 7,236 130,654 7.4% 23.1% 5.5% 0.3x 6.1x 435,000 300
Carrefour 31,548 5,024 81,237 -0.5% 21.6% 6.2% 0.4x 6.3x 321,383 253
Best Buy (Minnesota) 26,933 3,339 45,521 5.3% 22.6% 7.3% 0.6x 8.1x 125,000 364
303,508 15,049 176,810 10.9% 24.6% 8.7% 1.4x 14.1x 558,708 347
118,291 8,515 128,143 9.6% 24.0% 6.8% 0.9x 12.0x 349,500 301
6Public Basket
7Operational Metrics
8Operational Metrics
9Operational Metrics
10Valuation
11Valuation
12Valuation
EBITDA(x)
LTM GP%
EBITDA(x)
LTM RGR%
6x 6x 8x 11x 12x 12x 13x 16x 19x 37x
6x 6x 8x 11x 12x 12x 13x 16x 19x 37x
EBITDA(x) LTM GP%
EBITDA(x) LTM RGR%
13Recent Transactions
Target Revenue (TTM
Date Target Buyer Total Transaction Amount at time of deal) TEV / Revenue TEV / EBITDA
31-Dec-20 Flinders Nine United - - - -
22-Dec-20 Tradehouse BaltCap - 19.03 - -
15-Jan-21 Cost Plus World Market Kingswood Capital Management - - - -
29-Jan-21 Quickchek Corporation Murphy 645.00 - - -
22-Jan-21 P&H Motorcycles Staminier - - - -
28-Dec-20 ShopRunner FedEx - - - -
23-Dec-20 Ann Taylor (Ohio) Sycamore Partners Management - - - -
05-Jan-21 FreshDirect Centerbridge Partners 300.00 600.00 0.50 -
01-Dec-20 BevMo! goPuff 350.00 - - -
28-Dec-20 FFO Home American Freight 7.00 - - -
17-Nov-20 The GrowBiz GrowGeneration - - - -
07-Jan-21 Tiffany LVMH Moët Hennessy Louis Vuitton 15780.00 3668.70 3.99 21.51
18-Dec-20 Partner Coffee Services Tchibo Coffee Service - - - -
19-Jan-21 Hims & Hers Health Oaktree Acquisition 279.50 - - -
06-Nov-20 1-800 Contacts Kohlberg Kravis Roberts 3000.00 - - -
30-Oct-20 Mountain Equipment Kingswood Capital Management - - - -
07-Dec-20 JC Penney Brookfield Property Partners 1750.00 8240.00 0.14 -2.39
15-Nov-20 Urban Ladder Reliance Retail 24.54 - - -
11-Sep-20 Sleepo BHG Group (Malmo) 6.13 9.70 - -
02-Dec-20 Stop-N-Go of Madison Kwik Trip - - - -
1415
Public Basket Amazon.com
Online product and digital media sales comprised 50% of net revenue in 2019, followed by commissions, related fulfillment and
shipping fees, and other third-party seller services (19%), Amazon Web Services' cloud computing, storage, database, and other
offerings (13%), Prime membership fees and other subscription-based services (7%), product sales at Whole Foods and other physical
store retail formats (6%), and advertising services and cobranded credit cards (5%). International segments constituted 27% of
Amazon's non-AWS sales in 2019, led by Germany, the United Kingdom, and Japan.
16Public Basket Amazon.com
Company Name Date Deal Synopsis
The company received an undisclosed amount of development capital from Amazon.com, Mitsubishi Heavy Industries, Neuman & Esser Usa,
Infinium (Energy) 26-Jan-21 Grantham Environmental Trust and AP Ventures on January 26, 2021. The funding will be used to advance the development of commercial
scale applications to decarbonize the transportation sector.
Umbra (Multimedia and Design
24-Jan-21 The company was acquired by Amazon.com (NAS: AMZN) for an undisclosed amount on January 24, 2021.
Software)
17Public Basket Walmart
Its home market accounted for 77% of sales in fiscal 2020, with Mexico and Central America (6%), the United Kingdom (6%), and
Canada (4%) its largest external markets. In the United States, around 56% of sales come from grocery, 34% from general
merchandise, and 10% from health and wellness items. The company operates several e-commerce properties apart from its
eponymous site, including Flipkart and shoes.com (it also owns a roughly 10% stake in Chinese online retailer JD.com). Combined, e-
commerce accounted for about 7% of fiscal 2020 sales.
18Public Basket Walmart
Company Name Date Deal Synopsis
PhonePe 03-Dec-20 Flipkart sold a 13% stake in the company to Walmart and other undisclosed investors for $700 million on December 3, 2020.
The company reached a definitive agreement to be acquired by Walmart (NYS: WMT) for an undisclosed amount on November 20, 2020.
JoyRun 20-Nov-20 This acquisition allows Walmart to further augment its team and ongoing efforts to explore even more ways to deliver for customers in the
future.
19Public Basket The Home Depot
Its stores offer numerous building materials, home improvement products, lawn and garden products, and decor products and
provide various services, including home improvement installation services and tool and equipment rentals. The acquisition of
distributor Interline Brands in 2015 allowed Home Depot to enter the maintenance, repair, and operations business, which is
expected to expand with the pending acquisition of HD Supply. The tie-up with Company Store also brought textile exposure to
Home Depot's lineup.
20Public Basket The Home Depot
Company Name Date Deal Synopsis
The company was acquired by The Home Depot (NYS: HD) for $8 billion on December 24, 2020. As a result of the transaction, The Home
HD Supply 24-Dec-20 Depot will now hold a 82.9% stake in the company. The transaction enables The Home Depot to become a premier provider in the MRO
marketplace.
The company raised $90 million of Series C venture funding in a deal led by Chromo Invest and Blackrock Innovation Capital Group on
November 20, 2020. Maersk Growth, TFI International, Bramalea Partners, Alumni Ventures Group, and Perry Capital Partners also
Loadsmart 20-Nov-20 participated in the round. The funds will be used to better serve shippers through doubling down on the tools to deliver excellent
operational performance, as well as an expansion of value-added services like mode optimization, price transparency and data insights on
supply chain optimization opportunities.
21Public Basket Costco Wholesale
It sells memberships that allow customers to shop in its warehouses, which feature low prices on a limited product assortment.
Costco mainly caters to individual shoppers, but roughly 20% of paid members carry business memberships. Food and sundries
accounted for 42% of fiscal 2020 sales, with hardlines 17%, ancillary businesses (such as fuel and pharmacy) nearly 17%, fresh food
14%, and softlines 10%. Costco's warehouses average around 146,000 square feet; over 75% of its locations offer fuel. About 6% of
Costco's global sales come from e-commerce (excluding same-day grocery and various other services).
22Public Basket Costco Wholesale
Company Name Date Deal Synopsis
The company, a subsidiary of Transformco, was acquired by Costco Wholesale (NAS: COST) for $998 million on March 17, 2020. The
Innovel Solutions 17-Mar-20 acquisition will provide the company and its employees with the resources to continue to build out a best in class logistics platform and the
proceeds from the sale will allow TFCO to repay all of its non-real estate debt.
Navitus Health Solutions 03-Mar-20 SSM Health Partners sold a minority stake in the company to Costco for an undisclosed amount on March 03, 2020.
23Public Basket Lowe's Companies
The firm's stores offer products and services for home decorating, maintenance, repair, and remodeling. Lowe's targets retail do-it-
yourself and do-it-for-me customers as well as commercial business clients. We estimate that Lowe's captures a low-double-digit
share of the domestic home improvement market, based on U.S. Census estimates for market size.
24Public Basket Lowe's Companies
Company Name Date Deal Synopsis
The Retail Analytics Platform of Boomerang Commerce was acquired by Lowe's Companies (NYS: LOW) for an undisclosed amount on May
Boomerang Commerce (Retail
20-May-19 20, 2019. This acquisition will allow Boomerang Commerce to significantly accelerate their product roadmap and invest in customer success
Analytics Platform)
infrastructure for CommerceIQ.
The company was acquired by Lowe's Companies (NYSE: LOW) for $509 million on June 2017. The acquisition will help Lowe's Companies
Maintenance Supply
01-Jun-17 to enhance existing relationship with its customer base, particularly with regard to its Pro Services business and enable it to better serve
Headquarters
clients in the multifamily housing segment.
25Public Basket Target
Most of Target's stores are large-format, averaging roughly 130,000 square feet. The company has a significant e-commerce
presence, deriving around 9% of sales from the channel. In addition to its namesake stores, Target owns Shipt, an online same-day
delivery platform. After it exited Canada in 2015, virtually all of Target's revenue is generated from the United States.
26Public Basket Target
Company Name Date Deal Synopsis
Deliv 01-May-20 The company was acquired by Target (NYS: TGT) for an undisclosed amount in May 2020.
The company raised $100 million through the combination of debt and Series D venture funding from Target, IVP, Norwest Venture Partners,
Rosecliff Venture Partners, Alumni Ventures Group, New Enterprise Associates, Plus Capital, Omega Venture Partners and Generation
Casper 04-Feb-19 Ventures (Palo Alto) on February 04, 2019, putting the company's pre-money valuation at $1.04 billion. Dani Reiss, PROOF Fund,Founders
Circle Capital, Future Tech Labs, Chestnut Street Ventures, Gordon Segal, Evolution VC Partners, and Sand Hill Angels also participated in the
round. The funds will be used to fuel the company's international expansion and the growth of its physical retail stores.
27Public Basket Walgreens Boots Alliance
The core defensive positioning is primarily around the pharmacy that are placed in high traffic locations. Currently, the company has
the largest retail pharmacy market share (around 20%, excluding mail) which provides significant cost advantages and scale. Annually,
the company generates over $140 billion in revenue consisting of U.S. retail pharmacy (around 75%), International pharmacy (around
10%) and pharmaceutical wholesale (around 20%). Walgreens has established strategic partnerships to offer incremental services to
increase average revenue per customer and has an equity stakes in AmerisourceBergen (26%) and Sinopharm Holding Guoda
Drugstores (40%).
28Public Basket Walgreens Boots Alliance
Company Name Date Deal Synopsis
iA (Pharmaceuticals) 12-Jan-21 The company was acquired by Walgreens Boots Alliance (NAS: WBA) for an undisclosed amount on January 12, 2021.
The company raised $1.02 billion of venture funding in a deal led by Walgreens Boots Alliance on January 6, 2021. Kinnevik also participated
VillageMD 06-Jan-21
in the round. The funds will be used to increase the pace and scale of the rollout of the clinics and to adjust certain other terms.
29Public Basket Kroger
Around 82% of stores have pharmacies, while over half also sell fuel. The company also operated more than 300 fine jewelry stores
at the end of fiscal 2019. Kroger features a leading private-label offering and manufactures around a third of its own-brand units (and
42% of its grocery own-label assortment) itself, in 35 food production plants nationwide. Kroger is a top-two grocer in 90% of its
major markets (as of late 2019, according to Planet Retail and Edge Retail Insight data cited by the company). Virtually all of Kroger's
sales come from the United States.
30Public Basket Kroger
Company Name Date Deal Synopsis
The company was formed as a joint venture between Kroger and Lindsay Goldberg on May 14, 2019. The company will be a part of Kroger's
PearlRock Partners 14-May-19
alternative profit streams portfolio.
Shopko (42 Shopko Pharmacy
11-Dec-18 The 42 Shopko pharmacy locations of Shopko were acquired by Kroger for an undisclosed amount on December 11, 2018.
Stores)
31Public Basket Carrefour
Established in 1959, it is slowly diversifying away from the original large hypermarket format, although hypermarkets still account for
the majority of sales in France. Its focus on developing smaller stores has reduced exposure to the nonfood category (17% of group
sales). About 77% of sales are in Europe, with 20% in Latin America and 3% in Asia.
32Public Basket Carrefour
Company Name Date Deal Synopsis
The company, a subsidiary of The Dairy Farm Company (SES: D01), was acquired by Carrefour (PAR: CA) for EUR 97 million on December
Wellcome Department Store 31-Dec-20
31, 2020.
The company reached a definitive agreement to be acquired by Carrefour (EPA: CA) for EUR 60 million on November 2, 2020. The
Bio c' Bon 02-Nov-20
acquisition reinforces Carrefour's ambition to become the leader in organic food and the food transition for all in France.
33Public Basket Best Buy (Minnesota)
Bureau of Economic Analysis). The company is focused on accelerating online sales growth, improving its multichannel customer
experience, developing new in-store and in-home service offerings, optimizing its U.S., Canada, and Mexico retail store square
footage, lowering cost of goods sold expenses through supply-chain efficiencies, and reducing selling, general, and administrative
costs.
34Public Basket Best Buy (Minnesota)
Company Name Date Deal Synopsis
BioSensics (predictive health The predictive health care technology business of BioSensics of BioSensics was acquired by Best Buy (Minnesota) (NYS: BBY) for $20 million
07-Aug-19
care technology) on August 07, 2019.
The company was acquired by Best Buy (NYS: BBY) for $125 million on May 09, 2019. The acquisition is aligned with Best Buy's strategy to
Critical Signal Technologies 09-May-19
address health and wellness with a focus on aging seniors and how technology can help them live longer in their homes.
35Leroy Davis, Partner 704.899.5962 leroy@7mileadvisors.com
Tripp Davis, Partner 704.899.5762 tripp@7mileadvisors.com
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As a close-knit team with a long history together
and a laser focus on our target markets, we help Alexis Papa, Marketing & Sales Coordinator 704.414.8732 lexi.papa@7mileadvisors.com
our clients sell their companies, raise capital, grow
Marty Johnson, Senior Associate 704.973.3999 marty@7mileadvisors.com
through acquisitions, and evaluate new markets.
Securities offered through 7M Securities LLC. Sydney Scadden, Senior Associate 704.973.3998 sydney@7mileadvisors.com
Steve Buffington, Associate 704.960.1828 steve@7mileadvisors.com
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Ilia Ulianchuk, Senior Analyst 704.414.8743 ilia@7mileadvisors.com
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Sawyer Willingham, Analyst 704.285.8171 sawyer.willingham@7mileadvisors.comYou can also read
