2020 - 13th Annual William Blair Investment Banking Case Competition Presentation

13th Annual William Blair Investment Banking Case Competition
Paesano’s Products
Demetre Carnot | Savannah Dosland | Kov Herdic | Ki Sakuma

Agenda
Executive Summary
Industry Dynamics
Company Overview
Valuation Analysis
Final Thoughts
Strategic Options
4
Appendix
7
11
17
23
30
33
2

Team
Ki SakumaDemetre Carnot Kov HerdicSavannah Dosland
3

Options Pros Cons Target Buyer Consideration
No Change
• Maintains 100% control of all
decisions
• Risk not taking advantage of
high acquisition market
• N/A
Strategic Acquirer
• Potential premium from
synergies
• Potential acquirer pool
expansion
• Risk disclosure to industry
competitors
• Industry experts can make engaged
decisions and improve firm’s standing
• Potential premiums and cost reductions
from synergies
Financial Sponsor
• Potential for management
team to stay in control
• Potential new growth
opportunities with funding
• Risk of losing long-term
employees
• No longer the single decision
maker
• Potential to find synergies in firms' other
investments
• Looking for strong management to
continue with vision
Initial Public Offering
• Raises capital
• Keeps equity stake for future
upside
• Risk exposure disclosing firm
information
• New management looking for
shareholder best interest
• N/A
Venture Capital Investment
• Gains capital with future
upsides
• Firm has ability to reach
management vision
• Risk losing decision making
power
• Loss of equity stakes
• Industry experts can make engaged
decisions and improve firms standing
• Consultation for alternative growth metrics
Considerations
Shareholder Considerations
5

Compelling Story
Executive Summary
6
Recommendation Potential Buyers
Valuation Analysis
Sell-Side Advisory
• Paesano’s Products is a leading
partner and formulator for
personal care and household
products
• Unparalleled research and
development platform
• Strong management team with
attractive financial profile
• 2020E Revenue: $258M
• 2020E EBITDA: $57M
• 2020E EBIT: $52M
• We recommend a full sale to a
financial sponsor or strategic
acquirer
• Range: ~$700M - $760M
• Recommended financial
sponsors aim to retain strong
management teams
• Recommended strategic
acquirers have experience
integrating operations from
prior acquisitions
Financial Sponsors Strategic Acquirers
Potential Acquisitions
$550 $600 $650 $700 $750 $800 $850 $900 $950
Precedent Analysis (11.4x - 14.0x)
Comparable Analysis (11.2x - 13.6x)
DCF - Perpetuity (11.3x - 12.9x)
DCF - Exit Multiple (14.1x - 15.7x)
Leveraged Buyout (11.4x - 12.4x)

56.8%
35.1%
8.1%
Revenue Growth Revenue Breakdown (2020E – 2025P)
Client Base
59.3%
34.4%
6.3%
Home Care
Personal Care
Hospitality
Lower cost, higher volume toll
manufacturing for large CPG
firms
Contract Manufacturing
Higher cost, low-volume full-
service manufacturing for
“asset light” brand marketers
Customer Manufacturing
Small bottle, high-volume full-
service manufacturing for
hotels
Guest Amenities
Commentary
• Paesano’s Products demonstrates
significant competitive advantages
across all segments
• Improved top-line growth expected in
the hospitality segment through 2025
• Contract manufacturing accounts for
55.0% of customer relationships
• Long-term contracts drive consistent,
recurring revenue streams
• Paesano’s Products has wide
geographic reach
Company Overview
$258M $330M
Source: IBIS World 8
(2.0%)
0.0%
2.0%
4.0%
6.0%
8.0%
2021P 2022P 2023P 2024P 2025P
Home Care Personal Care Hospitality

S
 Best in class management team with years of industry expertise and knowledge
 Wide geographic reach with key locations in Midwestern hubs
 Full-service solution product offerings, creating one-stop-shop for all potential needs
 Diversified revenue streams from global CPG brands as well as high growth brands
W
 Limited differentiation among competitors
 Significant amount of debt on company’s balance sheet, potentially leading to excessive costs
 Large portion of revenue is concentrated among established brands with significant market influence and pricing power
O
 Expansion of hospitality business by capitalizing on trends of dispenser usage and refillable products
 Focus on operational improvements with respect to fixed and variable cost cutting
 Utilize future excess cash to to pursue add-on acquisitions to expand into other high performing industries
T
 Rapidly changing consumer preferences and buying behaviors
 Global supply chain shock as a result of COVID-19
 Relatively low barriers to entry
 Demand of highly profitable products tends to be seasonal in nature, leading to fluctuation in demand
 Numerous strong competitors in contract manufacturing for CPG companies
Positioning Analysis
9Source: IBIS World

Company Growth Prospects
Key Growth Initiatives
Grow Value-Added Household Products
Pursue Strategic Acquisition
Capitalize on Value-Added Services Opportunities in Personal Care
Expand Hospitality Business
Continued Focus on Operational Improvement
Hospitality Segment
Hotel Revenue Outlook Additional COVID-19 Commentary
• Increased focus on environmental concerns regarding plastic waste from
disposable bottles
• National hotel chains planning installation of reusable dispenser systems
• Elimination of small bottles by large hotel chains by the end of 2020
• Cost saving initiatives by hotels – especially important due to low occupancy
rates as a result of COVID-19
• Paesano’s Products is well positioned to capitalize on growing industry trends
• Key to recovery: make the hotel experience clean and safe for guests
(100.0%)
(50.0%)
0.0%
50.0%
100.0%
150.0%
2019 2020 2021 2022 2023 2024 2025
Revenue Domestic Trips (US Residents) Consumer Spending
Intense room cleaning throughout guest stay
Offer free hand sanitizer to customers
Additional cleaning downtime between stays
Paesano’s Products is well positioned to grow in the hospitality space
while capitalizing on shifting consumer preferences
Source: IBIS World, McKinsey & Co. 10

Industry Overview
Market Size
Annual Growth (’15 – ’19)
Projected Annual Growth (’20 – ’25)
Number of Businesses (’15 – ’20)
Projected Businesses Growth (’20 – ’25)
Contract Manufacturing
Key Industry Trends Success Factors
• In an industry dominated by medical device and pharmaceutical drug
manufacturing, consumer and homecare products account for 10.0% of
industry revenue
• Increasing demand for advanced products is a major factor driving the market
• North American manufacturers currently dominate the space, and the
presence of several large-scale companies provides stability and aides
industry growth
• The global contract manufacturing market size is expected to reach $316
billion by 2026 registering a CAGR of 12.4%
Concerns about carbon
footprints are causing
manufactures to explore
new resources
Ability to alter goods and services
produced in favor of market
conditions
$128B
6.6%
7.0%
(0.2%)
1.1%
Vertical integration through
M&A
Consumers have turned to
higher end products with
added benefits
New entrants innovate by
targeting niche markets to
compete
Large operators have the
financial means to increase
sales volumes
Industry Snapshot
24.0%
6.0%
10.0%
18.0%
20.0%
22.0%
Medical Devices
Food
Consumer Products
Electronics
Automotive and Aerospace
Pharmaceutical Drugs
Cost savings through automation
Economies of scale
Focus and quality
Efficiency in internal processes
Access to niche markets
Strong supply and customer
contracts
Proximity to key markets
CMO
Retailer
Retailor Factory
Revenue Breakdown

(20.0%)
(12.0%)
(4.0%)
4.0%
12.0%
20.0%
$SPY $VCR $VIS
$11,000
$12,000
$13,000
$14,000
$15,000
$16,000
2015 2015 2016 2017 2018 2018 2019
Key Points
$VCR, an ETF that tracks the consumer staples
sector has outpaced the S&P
$VIS, an ETF that tracks the manufacturing
industry at large has underperformed
Consumer Confidence in the United States is near
a six year low of 99.7
US Consumer Spending has fallen reversing a 5-
year trend
A PMI index of more than 50 indicates expansion
of the manufacturing segment of the economy
Paesano’s is poised to take advantage of a looming
economic recovery and a post COVID boom
Industry Drivers
97
98
99
100
101
102
Macro Trends Affecting the Industry
Consumer Confidence Consumer Spending
Consumer Staples & Manufacturing vs the S&P 500
YTD
Returns
8.8% 7.6% (0.1%)
U.S. ISM Purchasing Managers Index (PMI)
2015 2016 2017 2018 2019 20202015 2016 2017 2018 2019 2020
55
40
45
50
55
60
65
(data shown in billions)
2015 2016 2017 2018 2019 2020

Segment Drivers Outlook Key Players
Segmented Industry Drivers
Soap & Cleaning
Cosmetic & Beauty
Sanitary Paper Products
Packaging and Labeling
• Competition from foreign companies
• New product development
• High correlation with per capita disposable
income
• Environmentally conscious consumers have
spurred revenue growth
Over the next five years, the industry will
likely be poised to benefit from growing
consumer demand for high-quality,
brand-name soap and cleaning products,
growing at 2.0% annually
The cosmetics and beauty
manufacturing industry is expected to
return to normal growth, as consumer
confidence recovers, and disposable
income and consumer spending
continue to rise
• Consumers have turned to higher end
products with added benefits
• Influx of new entrants due to moderate
barriers of entry and utilization of free social
media platforms
• Carbon footprint concerns will cause
manufacturers to explore new resources
• Number of births and mortality rate
• Volatile input costs particularly in natural gas
and wood pulp have affected industry growth
• The trade weight index is expected to
decline, making U.S. goods relatively less
expensive
$13B
$32B
$43B
$9B
The number of U.S. adults aged 65+ is
anticipated to increase at an annualized
rate of 3.1% over the five years, and
industry revenue is projected to grow at
an annualized rate of 0.4% to $13.6
billion in 2025
• Vulnerable to general macroeconomic trends
that affect consumption
• E-commerce sales have been a main driver
for consumer expenditure
• Larger firms are aiming to achieve greater
economies of scale through vertical
integration
Growth in consumer spending and
disposable income is expected to return
as individuals are able to return to in-
person work, and the industry revenue
will grow at an annualized 1.9% to $10.2
billion in 2025

(4.0%)
(2.0%)
0.0%
2.0%
4.0%
6.0%
$10,000
$11,000
$12,000
$13,000
$14,000
$15,000
Revenue % Growth
(10.0%)
(6.0%)
(2.0%)
2.0%
6.0%
10.0%
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Revenue % Growth
(6.0%)
(4.0%)
(2.0%)
0.0%
2.0%
4.0%
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Revenue % Growth
Segmented Industry Performance
Soap & Cleaning Manufacturing
Sanitary Paper Product Manufacturing Packaging & Labeling Services
Cosmetic & Beauty Manufacturing
Rising demand from downstream markets will likely support revenue growth Imports and changing consumer preferences have hampered industry growth
Reusable sanitary products will likely become more popular among consumers Demand for services will increase as consumer spending continues to grow
(data shown in millions)
(data shown in millions)(data shown in millions)
(data shown in millions)
(7.0%)
(4.0%)
(1.0%)
2.0%
5.0%
8.0%
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Revenue % Growth

COVID-19 Impacts on Contract Manufacturing
E-commerce sales have been a main driver for consumer
expenditure shifting focus towards digital revenue channels
“Yesterday, the Commerce Dept.
reported that retail sales increased a
seasonally adjusted 1.9% in
September, a healthy bounce that
crushed expectations. That caps off
five consecutive months of growth.”
• In the middle of the deepest recession in memory, stock markets are
reaching new highs, and businesses are rapidly adjusting to a new normal
• With increasing demand from end users, many large companies have
turned to contract development and manufacturing organizations to
deliver essential products to customers in a timely fashion
Managing Success Amidst the Pandemic Stress
US Consumer Expenditures by Category: % Change vs. One Year Ago
(60.0%)
(30.0%)
0.0%
30.0%
60.0%
90.0%
2-Apr 10-Apr 17-Apr 23-Apr 30-Apr 15-May 5-Jun
Household Care Personal Care Cosmetics
Pre-COVID
CAGR
Post-COVID
CAGR
Estimated
Market Size
2020 Pre-COVID
Estimated
Market Size
2020 Post-
COVID
Growth Rates
9.8% 12.4
%
$152.2B $178.9
B
COVID Trends
The paper product manufacturing industry is expected to
increase 3.6% in 2020 due to pantry loading
Many upstream products are manufactured in China, causing
fluctuating purchase costs, leading to unpredictable profit
Successful firms have retrofitted manufacturing facilities to
produce hand sanitizers and other pandemic related products
Government regulations have limited prices of industry
products
Smaller contract manufactures have created chaos in the
market leading to strategic collaboration
Recent News
“Contract Manufacturing Market to
Witness Astonishing Growth by 2026
With Post Impact Of COVID-19”
10/17
Source: IBIS World, Morning Brew, NASDAQ Globe Newswire 16

Valuation
Transition
Valuation Analysis

Valuation Summary
18
$700M - $760M
$550 $600 $650 $700 $750 $800 $850 $900 $950

LTM 2020E
Amcor NYSE: AMCR 11.40$ 98.40% 17,906 24,010 12,468 1,821 14.6% 13.2x 12.4x 3.7x
Church & Dwight NYSE: CHD 94.47$ 95.46% 23,364 24,956 4,593 1,119 24.4% 22.3x 21.9x 1.8x
Edgewell Personal Care NYSE: EPC 30.07$ 77.16% 1,634 2,423 1,989 360 18.1% 6.7x 7.4x 3.6x
Kimberly-Clark NYSE: KMB 152.64$ 95.30% 52,057 58,938 18,844 4,336 23.0% 13.6x 13.0x 1.9x
MAV Beauty Brands TSX: MAV 3.61$ 56.67% 105 248 120 31 25.5% 8.1x 7.9x 5.0x
Nu Skin Enterprises NYSE: NUS 54.81$ 96.14% 2,817 2,990 2,304 295 12.8% 10.1x 9.3x 1.9x
TriMas NASDAQ: TRS 24.19$ 73.15% 1,101 1,367 742 110 14.9% 12.4x 9.3x 3.0x
High 25.5% 22.3x 21.9x 5.0x
3rd Quartile 20.0% 13.6x 13.0x 3.7x
Median 18.1% 12.4x 9.3x 3.0x
Mean 19.0% 12.3x 11.6x 3.0x
1st Quartile 10.0% 8.1x 7.9x 1.9x
Low 12.8% 6.7x 7.4x 1.8x
Company Name
Exchange
& Ticker
Price
% of
52-Wk. High
Market
Cap.
Enterprise
Value
Debt /
LTM EBITDA
EV / EBITDALTM
Revenue
LTM
EBITDA
LTM
EBITDA
Margin
Comparable Companies Analysis
Implied ValuationLTM EV/EBITDA
Paesano's Products 2020E EBITDA
Comparable Multiple Range 11.1x 13.6x
Enterprise Value Range $635.3 $776.5
$57.0
• Paesano's EBITDA margin is higher than several of its
peers, reflecting greater operating profitability and
efficiency
• With the demand for household products and personal care
goods at an all time high, most comparable companies are
trading near their 52-week high, resulting in a higher
multiple
Source: S&P Capital IQ, Bloomberg 19
12.4x
22.3x
13.6x 13.2x 12.4x 10.1x 8.1x 6.7x
0x
5x
10x
15x
20x
25x

18.8x 17.1x 16.4x
12.9x 12.5x 12.3x
10.3x
6.2x
0x
4x
8x
12x
16x
20x
Precedent Transactions Analysis
Implied ValuationTV/EBITDA
Paesano's Products 2020E EBITDA
M&A Multiple Range 11.4x 13.9x
Enterprise Value Range $650.4 $794.9
$57.0
12.7x
• A majority of recent transactions have included a strategic
acquirer as larger conglomerates seek vertical integration
• Personal care has been an industry of focus for M&A over
the past few years as more beauty, cosmetic, and hygiene
products become popular
Source: S&P Capital IQ, Bloomberg, Pitchbook 20
Revenue EBITDA
Coty Kohlberg Kravis Roberts (KKR) Sponsor 6/1/2020 2,500 1.8x 12.3x
Avon Products Natura Cosmetics Strategic 1/3/2020 2,161 0.5x 6.2x
ELEMIS L'Occitane International Strategic 1/13/2019 900 4.8x 16.4x
Water Pik Church & Dwight Strategic 7/17/2017 1,033 3.9x 12.9x
Nutraceutical International Corporation HGGC Sponsor 5/22/2017 432 1.8x 10.3x
HG International Cobepa Sponsor 1/24/2017 250 3.8x 17.1x
JemPak Corporation Apollo Healthcare Strategic 11/10/2016 100 2.4x 12.5x
Sun Products Corporation Henkel Strategic 9/1/2016 3,600 2.3x 18.8x
High 3,600 4.8x 18.8x
3rd Quartile 2,415 3.9x 16.9x
Median 967 2.3x 12.7x
Mean 1,372 2.7x 13.3x
1st Quartile 296 1.8x 10.8x
Low 100 0.5x 6.2x
Transaction Value
Target Company Acquirer
Transaction
Type
Announcement
Date
Transaction
Value

Discounted Cash Flow Analysis
Sensitivity Analysis
Implied Valuation
Commentary
• Assuming a 5-year period of steady free cash flow
• Using the targeted capital structure upon exit, the
WACC was calculated at 9.9%, placing the DCF as
the highest valuation methodology (refer to
Appendix)
• Strong EBITDA growth led to higher valuation for
the EBITDA Exit Multiple Method
• Calculated a 12.4x EBITDA Exit Multiple from the
average of the comparable company analysis
• Assumed a 2.0% perpetuity growth rate based on
the rate of inflation and steady mature nature of the
manufacturing industry
21
Discounted Cash Flows
68583.6% 1.90% 1.95% 2.00% 2.05% 2.10%
8.9% 778.3 782.7 787.3 791.9 796.5
9.4% 725.4 729.2 733.1 737.0 741.0
9.9% 679.2 682.5 685.8 689.2 692.6
10.4% 638.5 641.3 644.2 647.2 650.2
10.9% 602.3 604.8 607.4 609.9 612.5
Perpetuity Growth Rate
DiscountRate
849.9 11.4x 11.9x 12.4x 12.9x 13.4x
8.9% 828.8 856.3 883.9 911.5 939.1
9.4% 812.7 839.7 866.7 893.7 920.7
9.9% 797.1 823.5 849.9 876.4 902.8
10.4% 781.9 807.7 833.6 859.4 885.3
10.9% 767.0 792.3 817.6 842.9 868.2
EBITDA Exit Multiple
DiscountRate
Free Cash Flow Calculation 2021P 2022P 2023P 2024P 2025P
EBITDA 63.4 67.3 72.2 77.1 82.6
Less: D&A (5.5) (5.7) (6.0) (6.3) (6.6)
EBIT 58.0 61.6 66.3 70.8 76.0
Taxes @ 21.0% (12.2) (12.9) (13.9) (14.9) (16.0)
Unlevered After Tax Income 45.8 48.7 52.4 56.0 60.0
Plus: D&A 5.5 5.7 6.0 6.3 6.6
Less: CapEx (6.8) (6.4) (6.7) (6.3) (6.6)
Less: Increase in NWC (1.9) (0.6) (0.9) (0.9) (1.0)
Unlevered FCF 42.6 47.4 50.7 55.1 59.0
PV of Unlevered FCF 39.7$ 40.2$ 39.2$ 38.7$ 37.8$
Growth Rate 2.0%
Terminal Value 766.2
Present Value of Terminal Value 490.4
Enterprise Value 685.8
Perpetuity Growth Method
Exit Multiple 12.4x
Terminal Value 1,022.7
Present Value of Terminal Value 654.5
Enterprise Value 849.9
EBITDA Exit Multiple Method

Capital Structure
Leveraged Buyout Analysis
Assumptions
• Strong, consistent cash flows and secular trends
make Paesano's Products a good target for financial
sponsors with experience in the contract
manufacturing and consumer products industries
• Low capital expenditures and high margins drive
cash available for debt repayments and principal pay
downs
• Key Assumptions
• Exit Multiple: 12.4x
• Target Sponsor IRR: 25.0%
• Investment Period: 5 years
• Debt/EBITDA: 5.5x
• Senior Debt Interest Rate: L + 375 bps
• Implied Enterprise Value of $676M
22
Sensitivity Analysis Commentary
(Total EV)
$282 $245 $204 $156 $103
$538 $625 $731 $841 $919
$0
$200
$400
$600
$800
$1,000
$1,200
2021 2022 2023 2024 2025
Debt Equity
Uses ($M) % of Cap
Transaction Value 614.7 90.9%
Refinance Existing Debt 52.0 7.7%
Transaction Fees 9.2 1.4%
Total $675.9 100.0%
522.2x 11.4x 11.9x 12.4x 12.9x 13.4x
4.5x 478.5 491.1 503.8 516.4 529.1
5.0x 495.8 508.4 521.1 533.7 546.4
5.5x 513.1 525.8 538.4 551.1 563.7
6.0x 530.5 543.1 555.7 568.4 581.0
6.5x 547.8 560.4 573.1 585.7 598.4
Exit Multiple
Leverage
522.2x 20.0% 22.5% 25.0% 27.5% 30.0%
4.5x 572.4 536.0 503.8 475.2 449.8
5.0x 587.3 552.2 521.1 493.5 469.0
5.5x 602.2 568.4 538.4 511.9 488.3
6.0x 617.1 584.5 555.7 530.2 507.5
6.5x 632.0 600.7 573.1 548.5 526.7
Sponsor IRR
Leverage
Sources ($M) xEBITDA % of Cap
Senior Debt 313.5 5.5x 46.4%
Sponsor Equity 345.7 6.1x 51.1%
Management Equity 16.8 0.3x 2.5%
Total $675.9 11.9x 100.0%

Potential Acquisitions
The North American contract and customer manufacturing market for household products, personal care, and hospitality primarily
consists of small private companies
Company Segment Description Overview Arizona Natural Resources
Hotel Emporium
Household
Products
Household
Products
Hospitality
Hospitality
Private contract
manufacturer of
household products
Location: Larchmont, NY
Revenue: $27M
Location: Phoenix, AZ
Revenue: $26M
Location: Gardena, CA
Revenue: $31M
Contract manufacturer
of hotel amenity
products
Direct manufacturer
of premium hotel
amenity products
Location: Fredonia, WI
Revenue: $33M
Private label and
contract manufacturer
of household products
Based out of Phoenix, this family-owned company
manufactures amenities for resorts, spas, hotels and other
businesses. With the growth of the hospitality industry on
the West Coast, Paesano’s could benefit from the
acquisition through geographic expansion, given their
underrepresentation on the West Coast. Benefits include:
Paesano’s would gain a competitive advantage with Hotel
Emporium’s experience manufacturing luxury hotel
amenities at unrivaled prices. The manufacturer believes
in producing premium amenities that are eco-friendly
through their constant development of new products.
Benefits include:
Expanded customer base into the western markets
Gain access to their on-site chemists with
experience in product development and extensive
knowledge of raw materials
Gain access to Arizona Natural Resources
custom packaging to reduce costs of bottles, jars,
tubes and other packaging for Paesano’s
Gain new technology for product innovation
New niche offerings like zero plastic powder-
based amenities to reduce plastic waste
Cross-sell cleaning products that Paesano’s
already offers to hotels
Source: S&P Capital IQ, Zoom Info 24
Personal Care
Location: Englewood, NJ
Revenue: $107M
EBITDA: $8M
Contract
manufacturer of skin
care products
Personal Care
Location: Idaho Falls, ID
Revenue: $42M
Contract
manufacturer of
personal care
products

Private Strategic Acquirers
Firm Overview Size & Position Rationale Partnerships
SC Johnson, based out of Racine,
WI, manufactures and markets
consumer products with primary
products including home cleaning, air
care, pest control products, home
storage, and auto care products
Employees: 13,000
Revenue: $10B
Add-ons: 30
With 30 buy side investments, SC Johnson is one
of the largest private CPG companies – SJC can
aim to become more vertically integrated and
continue to achieve growth through acquisition
Employees: 3,600
Revenue: $2B
Add-ons: 13
Based out of Ada, MI, Amway operates
a consumer goods company which
engages in the direct selling of
personal care products and other
consumer cosmetics
Amway’s products are fulfilled via a chain of
distributors and independent businesses, and
Paesano's would allow Amway to build out their
back-end supply chain operations while
continuing to focus on their multi-level marketing
strategies
Based in Rosemont IL, KIK
manufactures hospitality, household
and personal care products
KIK has close relationships with over 70 global
CPG customers and virtually every relevant major
North American retailer
25
Employees: 20,000
Revenue: $9B
Add-ons: 3
Sysco Guest Supply provides
housekeeping supplies including
personal care amenities, bath, bed
linens, and equipment
Employees: ~4,000
Revenue: $1B
Add-ons: 1
Sysco guest supply has well established contracts
with leading hotel management chains
nationwide, and they recently acquired Gilchrist
& Soames – a manufacturer of toiletries products
Employees: 12,000
Revenue: $1B
Add-ons: 2
Provider of personal care products
based in Orlando FL, offering anti-
aging skin care creams and wellness
products such as nutritional
supplements and various skincare
and healthcare products
With two previous buy side investments, the
Florida-based multi-level marketing company
has more than half a million distributors in
215 countries and territories

Firm Overview Size & Position Rationale Brands
Public Strategic Acquirers
26
Enterprise Value: $71B
Cash on Hand: $997M
Debt/EBITDA: 1.9x
Colgate-Palmolive was founded in
1806 and has grown to become a
leading global consumer product
company generating over $15.5B
revenue annually
In addition to its oral care line, Colgate
manufactures shampoos, shower gels,
deodorants, and home care products that are
sold in over 200 countries, therefore Paesano’s
facilities and expertise in this area would
benefit Colgate
Ecolab was founded in 1923,
generates $14.9B in revenue per
year, and produces cleaning and
sanitation products for hospitality,
healthcare, and industrial markets
Cash on Hand: $1B
Debt/EBITDA: 2.7x
Ecolab is the global market share leader with a
wide array of products and services, and a
strong hold on the U.S. market – Ecolab views
acquisitions as a vehicle for growth and
expanded capabilities
Cash on Hand: $511M
Debt/EBITDA: 4.8x
Edgewell was founded in 2015,
generates over $2.3B of revenue
annually, and provides personal
care products in a variety of
categories
Edgewell operates in more than 20 countries
and has a diversified revenue profile across
geographies and segments, and has pursued
several standalone value creating investments
in the past decade
Cash on Hand: $1B
Debt/EBITDA: 1.9x
Kimberly-Clark was founded in
1985, generates $18.4B in
revenue per year and is a leading
manufacturer of personal care
products sold globally
With 28 buy side investments, Kimberly-Clark
has a diverse product mix, and is familiar with
vertical integration which could help reduce
Paesano’s production costs and improve supply
chain coordination
Cash on Hand: $21M
Debt/EBITDA: 4.1x
Sensient has a widespread network of facilities
around the globe and the company's products
are predominantly applied to consumer-facing
products which could add value granted
Paesano’s extensive customer relationships
Sensient Technologies was
founded in 1882, generates $1.3B
in revenue per year and
manufactures and markets
synthetic and natural colors,
flavors, and fragrances

Financial Sponsors
Firm Overview Criteria Rationale Investments
Investment: $300M-$700M
Relevant Sectors:
Industrials, Manufacturing,
Chemicals, and Consumer
American Securities was founded
in 1994, has raised $23B across
thirteen funds and is focused
heavily on the industrial sector
American Securities is one of the
largest industrial/manufacturing
focused private equity firms in North
America, and is very acquisitive post-
close with platform companies
27
Relevant Sectors:
Consumer, Business Services,
Industrials
Bain Capital was founded in
1984, and manages $105B+ in
private equity and alternative
investments across a diverse
pool of industries
Bain Capital is a multinational firm
with large sums of capital and has
made investments in the consumer
contract manufacturing space
namely, Innocor and Maesa
Revenue: $40M-$300M
EBITDA: $7M-$35M+
Relevant Sectors: B2B and
B2C Products and Value-
Added Distribution
Cortec Group was founded in
1984, has raised $4.6B across
seven funds, and invests in
healthcare, consumer products
and distribution companies
Cortec Group has closely partnered
with management teams in the
household products and sanitization
industries through the firm’s
acquisitions of Weiman and Urnex
H.I.G. Capital was founded in
1993, and manages $40B in
pool of industries
H.I.G. Capital has previously
acquired companies who
manufacture/formulate household
products, including Vantage
Specialty Chemical and Recochem
Transaction Value: $50M-$1B
Relevant Sectors: Consumer
Products and Manufacturing
HarbourVest was founded in
1978 and manages $42.4B in
pool of industries
HarbourVest has deep expertise in
the contract manufacturing industry
based on the firm’s acquisitions of
Gotha Cosmetics and KDC/ONE
Relevant Sectors:
Consumer, Industrials

Financial Sponsors
Firm Overview Criteria Rationale Investments
28
Investment: $50M - $200M+
EBITDA: $10M - $80M
Relevant Sectors: Food &
Consumer Products
Kainos Capital was founded in
2011, and has invested $2B in 73
transactions across the food and
consumer products industries
Kainos Capital has previous
experience investing in personal care,
household products, and contract
manufacturers, namely Fempro and
Product Quest
Investment: $50M - $250M+
EBITDA: $10M - $150M
Relevant Sectors: Services,
Packaging, Industrial
Distribution, and Chemicals
Nautic Partners was founded in
1986, manages $3.3B+, and
invests in industrials, services and
chemicals companies
Nautic Partners has made
investments previously in contract
manufacturers, namely Agilex
Flavors & Fragrances
Revenue: $20M - $500M
Relevant Sectors:
Consumer Products
Swander Pace Capital was
founded in 1996 and manages
$1.8B in investments in growth-
oriented, middle-market
consumer companies
Swander Pace Capital has previous
experience investing in personal
care, household products, and
contract manufacturers, namely
Captek Softgel and J.R. Watkins
Investment: $50M-$300M+
Revenue: $30M-$1B
Relevant Sectors:
Household Products,
Personal Care, and Beauty
TSG Consumer Partners was
founded in 1987, has raised $9B+
since inception, and invests
exclusively in consumer product
companies
TSG Consumer Partners is entirely
branded consumer goods and
personal care products focused which
positions Paesano's Products as an
accretive potential add on to one of
the firm’s portfolio companies
Transaction Value: $100M-$1B
EBITDA: $20M-$100M
Relevant Sectors: Industrials,
Packaging, Distribution, and
Consumer
Wellspring Capital Management
was founded in 1995, has raised
$4B+ across six funds, and
invests in well-positioned
middle-market companies
Wellspring Capital Management has
previously transacted in the contract
manufacturing and value-added
packaging space through the firm’s
acquisitions of Chemaid Laboratories
and Prolamina Corporation

6.1x
6.7x
6.9x
6.5x
6.8x
7.3x
7.1x 7.0x 7.1x 7.2x7.1x
7.5x
7.0x 7.1x
8.9x
4x
5x
6x
7x
8x
9x
2016 2017 2018 2019 2020
Manufacturing Business Services Distribution
M&A Market Overview
U.S. Middle Market Company Index Trading Multiples
U.S. Middle Market Transaction Values and Volume
Commentary
EV/EBITDA Industry Multiples
• M&A has started to resume after a slowdown
that began in March due to the pandemic
• There has been a steady increase in middle
market multiples since market lows in March
and April
• Business services and manufacturing industry
multiples have remained consistent, while there
has been a substantial increase in multiples
within the distribution industry
Source: S&P Capital IQ 29
2.1x 1.9x 2.0x 2.0x 2.0x 1.9x 2.0x 2.0x 1.6x 1.6x 1.8x 1.9x
9.8x 9.7x 9.9x 9.8x 10.0x 10.0x 10.0x 9.8x
8.0x
7.4x
8.2x 8.6x
0x
2x
4x
6x
8x
10x
12x
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
Median TV / Revenue Median TV / EBITDA
404
487
403
338
155
49
40
58
56
21
$0
$10,000
$20,000
$30,000
$40,000
$50,000
0
100
200
300
400
500
600
Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Total Disclosed Transaction Volume Total Transaction Volume
Total Disclosed Transaction Value
(Total Transaction Value shown in billions)

Compelling Story
Final Summary
Recommendation Summary Recommended Buyers
Valuation Analysis
Sell-Side Advisory
• Paesano’s Products is a leading
partner and formulator for
personal care and household
products
• Unparalleled research and
development platform
• Strong management team with
attractive financial profile
• 2020E Revenue: $258M
• 2020E EBITDA: $57M
• 2020E EBIT: $52M
• We recommend a full sale to a
financial sponsor or strategic
acquirer
• Range: ~$700M - $760M
• Recommended financial
sponsors aim to retain strong
management teams
• Recommended strategic
acquirers have experience
integrating operations from
prior acquisitions
Financial Sponsors Strategic Acquirers
Recommended Acquisitions
$550 $600 $650 $700 $750 $800 $850 $900 $950
31

Next Steps
Marketing and Due Diligence
• Distribute Teaser, CIM and other relevant materials
• Host introductory calls and respond to preliminary diligence
questions
• Open online data room to qualified parties
• Receive preliminary proposals by 2/8
Phase II of Due Diligence
• Host virtual management meetings with select qualified
parties
• Construct and provide financial analyses and appropriate
updates
• Receive Letter of Intent (LOI’s)
We recommend conducting a staged process targeting
strategic acquirers and private equity with the goal of closing
the deal by Q1 of 2021
Finalize Terms and Agreement
• Negotiate Final Letters of Intent
• Select preferred investor and Finalize Terms
• Facilitate Confirmatory Due Diligence
• Proceeds to Closing
Transaction Planning and Preparation
• Business and financial diligence session with management
• Construct Confidential Information Memorandum (CIM)
and finalize long term plan
• Finalize prospect list and have conversations with select
firms to preview process
• Finalize NDA’s and prepare online data room
32
S M T W T F S
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30
November
S M T W T F S
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31
December
S M T W T F S
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31
January
S M T W T F S
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28
Febuary
S M T W T F S
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31
March
S M T W T F S
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30
April

Income Statement
34
($ in millions) Actual Projected
Income Statement 2018A 2019A 2020E 2021P 2022P 2023P 2024P 2025P
Revenue
Home Care 132.1 135.4 146.5 156.8 164.6 173.7 183.7 194.7
Personal Care 84.3 87.3 91.3 95.9 99.8 104.1 109.1 114.8
Hospitality 20.2 22.5 20.6 20.2 20.0 20.2 20.5 20.9
Total Revenue 236.6 245.2 258.4 272.9 284.4 298.0 313.3 330.4
Total Revenue Growth 3.6% 5.4% 5.6% 4.2% 4.8% 5.1% 5.5%
Cost of Sales
Home Care 78.5 80.4 88.9 92.0 95.5 99.7 104.3 109.4
Personal Care 48.5 49.3 50.5 53.0 55.2 57.6 60.4 63.5
Hospitality 12.7 14.0 14.3 14.0 13.8 13.4 13.6 13.8
Total Cost of Sales 139.7 143.7 153.6 159.0 164.5 170.6 178.2 186.7
Gross Profit 96.9 101.5 104.8 113.9 119.9 127.4 135.1 143.7
Gross Profit Margin 41.0% 41.4% 40.6% 41.7% 42.2% 42.7% 43.1% 43.5%
SG&A (excl. Depreciation) 13.0 13.5 14.2 15.0 15.6 16.4 17.2 18.2
Fixed Overheard 30.8 31.9 33.6 35.5 37.0 38.7 40.7 42.9
EBITDA 53.2$ 56.1$ 57.0$ 63.4$ 67.3$ 72.2$ 77.1$ 82.6$
EBITDA Margin 22.5% 22.9% 22.1% 23.2% 23.7% 24.2% 24.6% 25.0%
Depreciation 4.7 4.9 5.2 5.5 5.7 6.0 6.3 6.6
Operating Income (EBIT) 48.4 51.2 51.8 58.0 61.6 66.3 70.8 76.0
Operating Income (EBIT) Margin 20.5% 20.9% 20.1% 21.2% 21.7% 22.2% 22.6% 23.0%
Interest (Income) - - - 2.5 2.6 2.7 2.9 3.0
Pre-Tax Income 48.4 51.2 51.8 55.5 59.0 63.5 68.0 73.0
Taxes 10.2 10.8 10.9 11.7 12.4 13.3 14.3 15.3
Net Income 38.3$ 40.5$ 40.9$ 43.8$ 46.6$ 50.2$ 53.7$ 57.6$

Balance Sheet
35
($ in millions) Projected
Balance Sheet 2020E 2021P 2022P 2023P 2024P 2025P
Cash 4.3 44.9 90.2 138.8 191.6 248.2
Accounts Receivable, Net 51.1 53.4 55.0 56.9 59.1 61.6
Short-term Investments - - - - - -
Unbilled Revenue 5.4 5.7 6.0 6.3 6.6 6.9
Prepaids 1.0 1.1 1.2 1.2 1.2 1.3
Total Current Assets 61.8 105.1 152.3 203.1 258.5 318.1
Fixed Assets, Net 3.0 4.4 5.1 5.8 5.8 5.8
Goodwill 39.2 39.2 39.2 39.2 39.2 39.2
Intangible Assets, Net 2.4 2.4 2.4 2.4 2.4 2.4
Other Long-Term Assets 0.3 0.3 0.3 0.3 0.3 0.3
Total Other Assets 44.9 46.3 47.0 47.7 47.7 47.7
Total Assets 106.7$ 151.4$ 199.3$ 250.9$ 306.3$ 365.8$
Notes Payable, current 5.0 5.0 5.0 5.0 5.0 5.0
Accounts Payable 20.0 20.7 21.8 23.1 24.6 26.3
Other Accrued Expenses 4.0 4.1 4.3 4.4 4.6 4.9
Other Current Liabilities 8.3 8.3 8.3 8.3 8.3 8.3
Total Current Liabilities 37.3 38.1 39.4 40.8 42.5 44.4
Long-Term Debt 52.0 52.0 52.0 52.0 52.0 52.0
Other Long-Term Liabilities 0.6 0.6 0.6 0.6 0.6 0.6
Total Liabilities 89.9 90.7 92.0 93.4 95.1 97.0
Total Member's Equity 16.8 60.6 107.3 157.5 211.2 268.8
Total Liabilities & Member's Equity 106.7$ 151.4$ 199.3$ 250.9$ 306.3$ 365.8$

Statement of Cash Flows
35
($ in millions) Projected
Statement of Cash Flows 2021P 2022P 2023P 2024P 2025P
Net Income 43.8 46.6 50.2 53.7 57.6
Plus: Depreciation 5.5 5.7 6.0 6.3 6.6
Less: Change in NWC 1.9 0.6 0.9 0.9 1.0
Cash Flow from Operations 47.4 51.7 55.3 59.1 63.2
CapEx (6.8) (6.4) (6.7) (6.3) (6.6)
Cash Flow from Investing (6.8) (6.4) (6.7) (6.3) (6.6)
Change in Debt - - - - -
Cash Flow from Financing - - - - -
Change in Cash 40.6$ 45.3$ 48.6$ 52.8$ 56.6$
Beginning Cash 4.3$ 44.9$ 90.2$ 138.8$ 191.6$
Ending Cash 44.9$ 90.2$ 138.8$ 191.6$ 248.2$

Beta Calculation
36
Paesano's Capital Structure
Unlevered Beta 0.71
Equity 797.9
Debt 52.0
Tax Rate 21.0%
Levered Beta 0.75
WACC Analysis
Debt 52.0
Equity 797.9
Total Capital 849.9
Beta 0.75
Market Risk Premium 7.0%
Size Premium 4.0%
Risk-Free Rate 1.0%
Cost of Equity 10.3%
Cost of Debt 4.75%
WACC 9.85%
Company Levered Beta Equity Debt Tax Rate Unlevered Beta
Ecolab 1.06 57,451 7,729 16% 0.95
Amcor 0.89 17,912 6,784 28% 0.70
Church & Dwight 0.57 22,940 2,044 20% 0.53
Edgewell Personal Care 0.99 1,617 1,300 24% 0.61
Kimberly-Clark 0.72 52,006 8,073 22% 0.64
MAV Beauty Brands 1.17 105 152 21% 0.55
Nu Skin Enterprises 0.99 2,833 518 32% 0.88
TriMas 1.04 1,125 331 21% 0.84
Average: 0.71

Assumptions - Base Case
37
2021P 2022P 2023P 2024P 2025P
Revenue Growth:
Home Care 5.5% 5.8% 6.0%
Personal Care 4.4% 4.8% 5.2%
Hospitality 0.9% 1.5% 2.0%
Cost of Revenue (% of Revenue)
Home Care 57.4% 56.8% 56.2%
Personal Care 55.3% 55.3% 55.3%
Hospitality 66.2% 66.2% 66.2%
SG&A (excl. Depreciation) (% of Revenue) 5.5% 5.5% 5.5%
Fixed Overhead (% of Revenue) 13.0% 13.0% 13.0%
Days Sales in Receivables 71.4 70.5 69.7 68.9 68.1
Unbilled Revenue (% of Revenue) 2.1% 2.1% 2.1% 2.1% 2.1%
Prepaids (% of COGS) 0.7% 0.7% 0.7% 0.7% 0.7%
Days Payable Outstanding 47.5 48.5 49.4 50.4 51.3
Other Accrued Expenses as % of COGS 2.6% 2.6% 2.6% 2.6% 2.6%

Assumptions - Upside Case
37
2021P 2022P 2023P 2024P 2025P
Revenue Growth:
Home Care 6.5% 6.9% 7.3%
Home Care 58.0% 58.0% 58.0%
Personal Care 54.3% 54.3% 54.3%
Hospitality 64.5% 64.5% 64.5%
Prepaids (% of COGS) 0.4% 0.4% 0.4% 0.4% 0.4%

Assumptions - Downside Case
2021P 2022P 2023P 2024P 2025P
Revenue Growth:
Home Care 4.0% 4.5% 5.0%
Home Care 57.5% 57.5% 57.5%
Personal Care 60.7% 60.7% 60.7%
Hospitality 69.2% 69.2% 69.2%
Prepaids (% of COGS) 1.0% 1.0% 1.0% 1.0% 1.0%
37

Additional LBO Assumptions
xEBITDA Rate
Revolver - L + 200 bps
Senior Debt 5.50x L + 375 bps
37
Cash Sweep 100.0%
Sponsor Ownership at Exit 95.0%

2020 - 13th Annual William Blair Investment Banking Case Competition Presentation

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