• Refer HBR Case Study: H.J. Heinz M&A (#KEL848)

• Objective: Firm Valuation and M&A Synergy

• Your group task requirements are to evaluate:

  o Firm Valuation and M&A Synergy o WACC and Risk Sensitivity o FCFs and Intrinsic (DCF) Valuation (NPV)

• o Comparable and Relative Valuation using Multiples o EVA

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Exhibit 3: Heinz Historical Financial Statements (US$ in thousands, except per KEL848 HJ HEINZ M&A share data, unless otherwise specified) CONSOLIDATED STATEMENTS OF INCOME Apr. 27,2011 10,552 6,614 Sales 3.944 Cost of products sold 2,257 Operating in Gross profit Selling, general, and administrative expenses income Interest income Interest expense expense, net Loss from continuing operations before income tax Provision for income taxes Income from continuing operations Loss from discontinued operations, net of tax Net income Less: Net income attributable to the non-controlling interest Net income attributable to H. J. Heinz Company Average common shares outstanding-basic (millions) Average common shares outstanding-diluted (millions) Earnings before interest, taxes, depreciation, and amortization Source: Heinz 2012 10-K Apr. 28, 2013 11,675 7,333 4,195 2,534 1,662 28 284 (62) 1,344 242 1,102 (75) 1,027 14 1,013 321 323 2.057 12 Months Ended Apr. 29, 2012 11,508 7.513 3.995 2,492 1,502 35 293 (8) 1,236 245 991 (51) 940 17 923 321 323 1,947 1.686 23 273 (21) 1.416 371 1,046 (40) 1,006 16 990 320 323 1,862 KEL848 H.J. HEINZ M&A Exhibit 3 (continued) CONSOLIDATED BALANCE SHEETS Cash and cash equivalents Receivables (net of allowance) Inventories Prepaid expenses Total current assets Property, plant, and equipment, net Goodwill and intangible assets Other non-current assets Total assets 12 Months Ended Apr. 28, 2013 Apr. 29, 2012 2,477 1,330 1,074 994 1,333 1,329 252 229 5,136 3,8B2 2,459 2,484 4,495 4,684 850 933 12.939 11,983 Short-term debt and current portion of long-term debt Payables Accrued liabilities Income taxes Total current liabilities Long-term debt Deferred income taxes Non-pension post-retirement benefits Other non-current liabilities Total long-term debt and other non-current liabilities 2,160 1,493 1,019 114 4,787 3,848 679 240 507 5,274 247 1,349 951 102 2,648 4.780 818 231 581 6,411 Non-controlling interest Capital stock Additional capital Retained earnings Treasury shares, at cost Accumulated other comprehensive loss Total equity Total liabilities and equity 77 108 609 7,907 (4,647) (1.175) 2,849 12.939 166 108 595 7,567 (4.666) (845) 2,811 11,983 Source: Heinz 2012 10-K KEMA HIJ HEMA Exhibit 3 (continued) 12 Months Ended Apr. 29, 2012 Apr. 28, 2013 Ap. 21,20 CONSOLIDATED STATEMENTS OF CASH FLOWS 1.027 940 1.00 OPERATING ACTIVITIES Adjustments to reconcile net income to cash provided by 302 47 (87) (69) 56 85 296 47 (95) (23) 59 75 255 43 154 0 98 Depreciation Amortization Deferred tax benefit provision Pension contributions Asset write downs impairments Other items.net Changes in current assets and liabilities, excluding effects of acquisitions Receivables (incl. proceeds from securitization) Inventories Prepaid expenses and other current assets Accounts payable Accrued liabilities Income taxes Cash provided by operating activities (81) (2) (166) (49) 14 169 72 (9) 1,390 172 61 (12) (72) (20) 66 1,493 233 (61) 51 1,584 (399) 19 17 INVESTING ACTIVITIES: Capital expenditures Proceeds from disposals of PP&E, net Proceeds from divestitures Sale of short-term investments Change in restricted cash Other items, net Cash used for investing activities 0 4 (14) (373) (419) 7 4 57 (39) (11) (402) (336) (605) 2 0 (5) (6) (950) FINANCING ACTIVITIES: Net proceeds/(payments) on short-term debt Dividends Purchase of treasury stock Exercise of stock options Acquisition of subsidiary shares from non-controlling interests Earn-out settlement Other items, net Cash provided by/(used for) financing activities Effect of exchange rate changes on cash and CE Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (43) (619) (202) 83 (55) 0 1,090 (666) (139) 113 (80) (45) 2 257 (128) 1,146 1,330 2,477 1 (193) (580) (70) 155 (6) 0 28 (483) 90 241 483 724 (363) (122) 606 724 1,330 Source: Heinz 2012 10-K 1. J. HEINZ M&A KEL84N Exhibit 4: Comparable Company Metrics GROWTH ANALYSIS Campbell ConAgra Foods General Mills Groupe Danone Hershey 2011 (0.2) 7.8 11.9 13.6 7.2 6.5 Revenue Growth (%) 2012 2013(E) 4.5 5.1 16.8 13.4 . 6.7 3.2 3.2 8.0 3.3 9.3 0. 6.7 7.6 1.6 4.5 (0.4) 1.2 10.2 1.7 (1.5) 12.2 1.2 6.7 (0.5) 2011 (4.3) 5.1 32 2011 (7.8) 3.0 5.3 53 9.7 8.5 (1.6) EBITDA Growth (%) 2012 2013(E) 9.9 1.4 19.0 18,0 4.4 5.3 4.3 (2.5) 10.4 9.9 5.0 7.5 9.8 (37.6) (0.1) 9.9 2.7 (5.8) 3.5 12.4 4,6 8.5 4.4 2014(E) 2.1 0.3 S. 3.7 45 6.2 V. 2.7 2 2.4 4.3 4.3 4.2 1.6 3.0 2014/E) 5.5 10.9 7.0 6.9 10.7 2014(E) 3.3 5.6 5.2 7.2 8.6 4.8 12.3 10.2 5.8 6.8 3.7 4.7 10.6 2.4 Kellogg EPS Growth (35) 2012 2013(E) 8.6 (1.7) 17.4 7.7 5.1 82 (42) 14.9 14.6 (0.3) 11.8 1.7 (39.3) 12.0 9.6 1.8 (6.0) 5.5 126 1.2 13.5 8.8 (35.6) Kraft Mondelz. Nestl S.A. PepsiCo Unilever Smucker 10.5 (23.8) 15.0 1.6 14.5 9.3 (8.3) 8.3 (2.0) 1.5 13.4 14.6) 8.5 (6.1) 0.9 14.0 9.3 8.7 8.5 5.7 3.7 5.5 2.3 3.0 5.9 7.8 6.5 6.7 3.0 3.2 58 6.7 3.6 8.6 6.4 4.5 3.3 3.3 3.4 2.4 8.5 8.1 4.1 7.6 Mean Median 9.5 8.1 4.0 5.2 2.9 1.7 44 8.6 8.8 1.9 Heinz Source: FactSet THOOG SCHOOL OF MANAGEMENT Exhibit 5: Comparable Transaction Metrics (US$ in millions, except multiples) The following is a list of transactions from the packaged food, beverage, and related industries. Use discretion in choosing comparable transactions for valuation analysis because some of the target companies may be better comparables than others. Announce- ment Date Dec 2012 Nov. 2012 July 2012 ca Feb. 2012 Revenue Net Income Capex Ca Door Asset Target Morningstar Foods, LLC Ralcorp Holdings, Inc. Peet's Coffee & Tea, Inc. Pringles Business of P&G National Beef Packing Co. LLC Provimi SAS Foster's Group Ltd. Del Monte Foods Co. Ent. Value ($bn) 1.45 6.78 0.95 270 0.87 1.83 13.12 5.30 Ent Value LTM EBITDA 9.3x 12.1x 23. 2x 11.1x 3.7% 8.1x -122.9x B.8x 302 2.024 4339 Dec. 2011 EBITOA 156 560 40 243 300 224 (107) 603 1,625 1.322 383 1,458 5,808 2,298 4.547 3,713 Aug. 2011 June 2011 Nov. 2010 73 15 153 248 93 (554) (41) 20 04 238 587 13 2.102 8.900 4731 Aoquiror Saputo Inc ConAgra Foods, Inc. Joh A. Benckiser GmbH Kellogg Company Leucadia National Corp. Cargill, Inc SABMiller Plc Funds affiliated with KKR & Co. and others Ralcorp Holdings, Inc Nestl S.A Pinnacle Foods Group, Inc. Kraft Foods Inc. Altria Group, Inc J.M. Smucker Company Mars rated Ralcorp Holdings, Inc. The Blackstone Group, L.P. B.3x 12.5% 80 36 45 500 June 2010 Jan. 2010 Nov. 2009 Sept. 2009 Sept. 2008 June 2008 (21) 408) 44 313 48 599 2,100 921 5,975 1,891 1,754 6.780 1,103 1,809 750 1618 1.280 American Italian Pasta Co. N.A. Frozen Pizza Business of Kraft Birds Eye Foods, Inc. Cadbury plc UST LLC The Folgers Coffee Company Wm. Wrigley Jr. Company Foods Foods Group, Inc European Frozen Foods of Unilever Chef America, Inc. The Pillsbury Company The Quaker Oats Company 62 509 560 227 852 117 (109) (23) 240) (21) 303 1,130 1.28 3.70 1.37 21.40 11.50 3,40 23.02 2.64 2.14 2.20 2.60 10.40 14.01 4,47 19.02 2.91 747 8,129 1.417 829 5.517 919 1.786 151 298 144 1,609 971 388 1,251 234 241 222 179 1,005 928 449 1,364 342 Post For Apr. 2008 Nov. 2007 Feb. 2007 Aug. 2006 Aug 2006 Oct 2001 Dec. 2000 Oct. 2000 Pinnacle 13.3x 11.9x B.8x 18.4x 11.3x 8.9x 9.BX 14.5x 10.1x 15.8x 10.7% 13.7x 8.ox 16.200 51 (156) (269) 250 774 Permira Advisors Ltd Nestl S.A General Mills, Inc PepsiCo, Inc. Kellogg Company Philip Morris Companies Inc. ConAgra Foods. Inc 181 22 6,087 5.098 2,757 8.013 2,210 (114) 4665 176 378 34 140 14 583 4.014 150 9.252 2494 1,773 11,610 1.527 1,000 Keebler Foods Company Nabisco Holdings Corp International Home Foods June 2000 June 2000 Source: FactSet MANAGEMENT H.J. HEINZ M&A KEL848 Exhibit 4 (continued) VALUATION ANALYSIS 2 Campbell ConAgra Foods General Mills Groupe Danone 2011 13.0x 14.5x 16.0x 17.3x 18.5% Hershey Kellogg Kraft Nam 15.5x Price/Earnings 2012 2013(E) 13.6x 17.7% 13.7x 15.8x 15.0x 17.5x 16.8x 16.6x 21.9x 22.3x 15.0x 16.6x 16.5x 10.7% 18.3x 17.6x 17.7% 15.1x 16.7x 18.2x 18.7x 16.8x 19.2x 2014(E) 16.3x 14.2x 17.6x 19.1x 26.5x 16.8x 19.0x 21.9x 19.5x 19.9x 19.1x 18.8x Enterprise Value/EBITDA 2011 2012 2013(E) 8.7x 11.5x 7.6% 7.BX 11.6x 10.0x 9.6x 10.8x 11.8x 10.9x 10.7% 9.7x 11.6x 12.0x 10.2x 10.1x 11.2x 11.5x 10.2x 10.4x 11.2x 11.2x 12.3x 12.3x 10.1x 9.8x 10.3x 10.3x 11.7x 11.4x 8.8x 9.6x 10.8x 2014(E) 10.2x 9.4% 10.9x 11.8x 14.6% 11.3% 11.9x 13.8x 13.1x 12.0x 11.3x 10.4% Enterprise Val Free Cash Flow 2011 2012 2014) 2014/5) 15.3 18.4% 21 2x 14.3% 18.8x 24 x 30.1 184x 16.3% 20.3 22 3 20.8 19.1% 31.0 17.7% 38.1 20.1x B Ba 20.7% 23.7% 22.5% 32.6 13.7% 398x 38.9x 33.1x 96.8x 35,3K 23.2x 37.8x 20.8% 20 4x 23.4x 22.6x 22 2x 29,5% 22.1x 28.5x 22.0K 25.0% 45.9x 14.3% 19.8x 20.8% Mondelz Nestl S.A. PepsiCo Unilever Smucker 10.2x 17.0x 15.8x 15.8x 16.0x Mean Median 15.4x 15.8x 15.8x 15.1x 17.8x 17.6x 19.0x 19.0x 9.8x 10.1x 10.2x 10.1% 11.3x 11.3 11.7x 11.6% 25.5x 22.3% 24.9% 22.6% 23.8% 21.5% 28.8% 29.0x 24.7% 20.2% 22.2x 12.0x 17.0x 19.2x 10.4x 10.4x 12.8x 20.5x 15.6x Heinz 16.7x Source: FactSet J. HEINZ M&A KURA Exhibit 4 (continued) RETURNS ANALYSIS 2011 11.5 6.7 7.9 2011 1.18 0.05 Campbell Con Agra Foods General Mills Groupe Danone Hershey Kellogg Return on Assets (%) 2012 2013(E) 11.2 0.7 4.9 4.6 8.5 8.3 5.8 6.2 14.4 10.6 7.1 8.9 70 7.2 3.6 3.7 8,8 8.3 8.8 3.9 10.2 10.2 6.0 6.7 2014(E) 10.1 4.8 8,6 5.8 16.6 9.2 3.2 4.0 3.6 9.4 10.0 70 2011 07.4 16.7 23.9 13.0 09.0 02.8 14.5 10.4 Return on Equity (%) 2012 2013(E) 09.3 00.4 16.6 10.9 20.0 24.7 13.0 12.4 08.8 04.2 40.0 40.1 40.0 46.0 8.8 7,8 10.0 17.0 20,8 20.8 30.0 20.8 10,6 2014(E) 61.0 14.5 24.0 13.7 53.0 30.6 470 130 1.30 1.07 Dividend per Share 2012 2013) 20140 128 134 0.09 100 102 12 1 145 148 1.54 TOT 2.00 1.74 180 0.50 2.07 21 0.52 0.84 0.00 2.08 2.13 2.25 213 22 2.40 127 1.43 205 231 2.54 Kraft 1.10 Mondez Nestl S.A Pepsico Unilever Smucker 4,3 8.4 10.0 10.4 11.4 16.0 33.2 29.1 8.0 17.0 30.9 28.1 12.6 203 1.17 1.00 32.0 23.9 31.8 27,9 28.4 20.3 30.3 20.7 145 1.38 0.Z 102 1.00 IM 100 8.0 7.8 1.30 8.7 8.4 Mean Median 1.6 1.02 2.00 222 374 2.30 29.4 31.5 39.2 7.6 7.6 9.5 Heinz Source: Facts KA Exhibit 4 (continued) VALUATION ANALYSIS 1 2013(E) 2014(E) 8.5x 2.4x 2013(E) 2011 2011 9.8x 2.3x 4.0x 2.1x 11.5x 8.7x 2011 1.4x 0.8x 1.7% 1.8x Campbell ConAgra Foods General Mills Groupe Danone Hershey Kellogg Kraft Mondelz Nestl S.A PepsiCo Unilever Smucker 9.dx Price/Book 2012 9.Ox 11.6x 2.1x 2.6x 3.5x 4.7% 2.4x 2.4x 16.2x 15.7x 10.3x 8.3x 7.6% 1.2x 1.4x 3.0x 3.1x 5.1x 4.8x 5.Ox 5.5x 2.2x Prica/Sales 2012 1.4x 1.8x 0.8x 0.9x 1.5x 1.7% 1.6x 1.5x 2.3x 2.4x 1.4x 2014(E) 1.6K 0.0% 1.6x 1.6% 3.1x 1.6x 4.0x 2.1x 11.5x 8.7% 1.5x Pro Earnings to Growth 2012 2013(E) 2014) 9.0x 11.8% 8154 2.1x 2x 3.5x 47 24 24 27 18.2x 5.7% OS 10.3x 7.x d.dk 1.2x TAX 3. OK J.TX 3.4% 5.1x 4.8% 5.7% 5.0x 5.x 22x 2.7x 16.5x 6.3X 0.0X 1 Bv 1.8x 3.4x 5.7x 5.5x 2.2% 1.0x 3.Ox 4.9x 4.5x 1.1x 1.7X 1.8x 1.6x 1.8x 1.2x 2.1x 1.6x 1.7x 1.6x 1.5x 1.3x 2.1x 1.6x 1.7x 1.9x 2.3x 2.0x 1.7% 2.0x 1.0x 3.OX 4.9x 4.5% -- 1.0X 5.2x 4.2x 5.8x 4.3x 5.8x 4.8x 5.7x 5.1x Mean Median 1.8x 1.7% 1.6x 1.6x 5.2x 4.2x 1./X 1.7X 5.8x 4.3% 5.8x 4.8% 5.7% 5.1% 5.5x 58x 5.1x 2.0x 1.9x 1,5x 1.5x 7.6x 6.9x 5.5x Heinz 5.12 Source: FactSet. 23 SCHOOL OF MANAGEMENT H.J. HEINZ M&A KEL848 Exhibit 4 (continued) LEVERAGE ANALYSIS 2013(E) 201316 2014(E) 2011 0.6x 0.7x 0.5x 0.5x 1.2x 0.4x 2011 0.4x 0.8x 1.1x 1.7% 0.5x 1.2x 1.8x 2.1% Net Debt/EBITDA 2012 0.5x 0.4x 0.3x 0.3x 0.5x 0.5x 0.5x 0.5x 1.2x 1.5x 0.4x 0.4x 0.4x 0.4x 0.3x 0.4x 1.1x 1.Ox 0.6x 0.6x 1.0x 1.1x 0.7x 0.7x 2014(E) 0.5x 0.3x 0.5x 0.5x 1.8x 0.4x 0.4x 0.4x 1.3x 0.6x 1.1x 0.8x Campbell ConAgra Foods General Mills Groupe Danone Hershey Kellogg Kraft Mondelz Nestl S.A PepsiCo Unilever Smucker Debu Equity 2012 0.5x 0.8% 1.0x 1.3x 1.3x 1.4x 1.9x 2.7x 2.1x B. 1x 0.6x 0.6% 0.5x 0.5x 2.8x 2.9x 5.Ox 6.5x 1.1x 1.1x 2.3x 2.4x 3.2x 3.6x 2011 5.5x 2.5% 3.2x 2.3% 5.1% 6.8x AssetsEquity 2012 2013(E) 201415) 6 x 5.7% 4.7% 3.8% 3.2% 2.9% 3.OX 3.0 2.7% 2.4x 2.4% 2.3% 4.5% 3.1% 62% 4.4x 4.1x 6.5x 6.0x 5.8x 2.3% 1.8% 1.9% 2.1x 2.0% 18x 3.3x 3.3% 3.2% 2.7% 2.9% 2.7% 1.8x 1.8% 1.8x 0.8x 2.1X 0.3x 1.7x 0.6x 1.0x 0.8x 0.5x 0.4x 2.7x 4.1x 1.1x 2.1x 3.Ox 4.7% 0.9x 3.9x 2.5x 2.7x 2.0% 3.5% 3.2x 1.8x 1.6x 1.3x 3.Bx 3.2x 2.5x 1.9x 1.9x 1.6x 3.5x 3.2x 3.3% 3.1x 2.0x 1.9x 0.6x 0.5x 0.6x 0.5x 3.1x 2.8x 0.7x 0.5x 0.8x 0.6x Mean Median 3.9x 4.3x 3.9x 3.6x 1.8x 1.6x 1.3x 1.8x 0.7x 0.6x 0.5x Heinz 0.5x Source: FactSet Exhibit 3: Heinz Historical Financial Statements (US$ in thousands, except per KEL848 HJ HEINZ M&A share data, unless otherwise specified) CONSOLIDATED STATEMENTS OF INCOME Apr. 27,2011 10,552 6,614 Sales 3.944 Cost of products sold 2,257 Operating in Gross profit Selling, general, and administrative expenses income Interest income Interest expense expense, net Loss from continuing operations before income tax Provision for income taxes Income from continuing operations Loss from discontinued operations, net of tax Net income Less: Net income attributable to the non-controlling interest Net income attributable to H. J. Heinz Company Average common shares outstanding-basic (millions) Average common shares outstanding-diluted (millions) Earnings before interest, taxes, depreciation, and amortization Source: Heinz 2012 10-K Apr. 28, 2013 11,675 7,333 4,195 2,534 1,662 28 284 (62) 1,344 242 1,102 (75) 1,027 14 1,013 321 323 2.057 12 Months Ended Apr. 29, 2012 11,508 7.513 3.995 2,492 1,502 35 293 (8) 1,236 245 991 (51) 940 17 923 321 323 1,947 1.686 23 273 (21) 1.416 371 1,046 (40) 1,006 16 990 320 323 1,862 KEL848 H.J. HEINZ M&A Exhibit 3 (continued) CONSOLIDATED BALANCE SHEETS Cash and cash equivalents Receivables (net of allowance) Inventories Prepaid expenses Total current assets Property, plant, and equipment, net Goodwill and intangible assets Other non-current assets Total assets 12 Months Ended Apr. 28, 2013 Apr. 29, 2012 2,477 1,330 1,074 994 1,333 1,329 252 229 5,136 3,8B2 2,459 2,484 4,495 4,684 850 933 12.939 11,983 Short-term debt and current portion of long-term debt Payables Accrued liabilities Income taxes Total current liabilities Long-term debt Deferred income taxes Non-pension post-retirement benefits Other non-current liabilities Total long-term debt and other non-current liabilities 2,160 1,493 1,019 114 4,787 3,848 679 240 507 5,274 247 1,349 951 102 2,648 4.780 818 231 581 6,411 Non-controlling interest Capital stock Additional capital Retained earnings Treasury shares, at cost Accumulated other comprehensive loss Total equity Total liabilities and equity 77 108 609 7,907 (4,647) (1.175) 2,849 12.939 166 108 595 7,567 (4.666) (845) 2,811 11,983 Source: Heinz 2012 10-K KEMA HIJ HEMA Exhibit 3 (continued) 12 Months Ended Apr. 29, 2012 Apr. 28, 2013 Ap. 21,20 CONSOLIDATED STATEMENTS OF CASH FLOWS 1.027 940 1.00 OPERATING ACTIVITIES Adjustments to reconcile net income to cash provided by 302 47 (87) (69) 56 85 296 47 (95) (23) 59 75 255 43 154 0 98 Depreciation Amortization Deferred tax benefit provision Pension contributions Asset write downs impairments Other items.net Changes in current assets and liabilities, excluding effects of acquisitions Receivables (incl. proceeds from securitization) Inventories Prepaid expenses and other current assets Accounts payable Accrued liabilities Income taxes Cash provided by operating activities (81) (2) (166) (49) 14 169 72 (9) 1,390 172 61 (12) (72) (20) 66 1,493 233 (61) 51 1,584 (399) 19 17 INVESTING ACTIVITIES: Capital expenditures Proceeds from disposals of PP&E, net Proceeds from divestitures Sale of short-term investments Change in restricted cash Other items, net Cash used for investing activities 0 4 (14) (373) (419) 7 4 57 (39) (11) (402) (336) (605) 2 0 (5) (6) (950) FINANCING ACTIVITIES: Net proceeds/(payments) on short-term debt Dividends Purchase of treasury stock Exercise of stock options Acquisition of subsidiary shares from non-controlling interests Earn-out settlement Other items, net Cash provided by/(used for) financing activities Effect of exchange rate changes on cash and CE Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (43) (619) (202) 83 (55) 0 1,090 (666) (139) 113 (80) (45) 2 257 (128) 1,146 1,330 2,477 1 (193) (580) (70) 155 (6) 0 28 (483) 90 241 483 724 (363) (122) 606 724 1,330 Source: Heinz 2012 10-K 1. J. HEINZ M&A KEL84N Exhibit 4: Comparable Company Metrics GROWTH ANALYSIS Campbell ConAgra Foods General Mills Groupe Danone Hershey 2011 (0.2) 7.8 11.9 13.6 7.2 6.5 Revenue Growth (%) 2012 2013(E) 4.5 5.1 16.8 13.4 . 6.7 3.2 3.2 8.0 3.3 9.3 0. 6.7 7.6 1.6 4.5 (0.4) 1.2 10.2 1.7 (1.5) 12.2 1.2 6.7 (0.5) 2011 (4.3) 5.1 32 2011 (7.8) 3.0 5.3 53 9.7 8.5 (1.6) EBITDA Growth (%) 2012 2013(E) 9.9 1.4 19.0 18,0 4.4 5.3 4.3 (2.5) 10.4 9.9 5.0 7.5 9.8 (37.6) (0.1) 9.9 2.7 (5.8) 3.5 12.4 4,6 8.5 4.4 2014(E) 2.1 0.3 S. 3.7 45 6.2 V. 2.7 2 2.4 4.3 4.3 4.2 1.6 3.0 2014/E) 5.5 10.9 7.0 6.9 10.7 2014(E) 3.3 5.6 5.2 7.2 8.6 4.8 12.3 10.2 5.8 6.8 3.7 4.7 10.6 2.4 Kellogg EPS Growth (35) 2012 2013(E) 8.6 (1.7) 17.4 7.7 5.1 82 (42) 14.9 14.6 (0.3) 11.8 1.7 (39.3) 12.0 9.6 1.8 (6.0) 5.5 126 1.2 13.5 8.8 (35.6) Kraft Mondelz. Nestl S.A. PepsiCo Unilever Smucker 10.5 (23.8) 15.0 1.6 14.5 9.3 (8.3) 8.3 (2.0) 1.5 13.4 14.6) 8.5 (6.1) 0.9 14.0 9.3 8.7 8.5 5.7 3.7 5.5 2.3 3.0 5.9 7.8 6.5 6.7 3.0 3.2 58 6.7 3.6 8.6 6.4 4.5 3.3 3.3 3.4 2.4 8.5 8.1 4.1 7.6 Mean Median 9.5 8.1 4.0 5.2 2.9 1.7 44 8.6 8.8 1.9 Heinz Source: FactSet THOOG SCHOOL OF MANAGEMENT Exhibit 5: Comparable Transaction Metrics (US$ in millions, except multiples) The following is a list of transactions from the packaged food, beverage, and related industries. Use discretion in choosing comparable transactions for valuation analysis because some of the target companies may be better comparables than others. Announce- ment Date Dec 2012 Nov. 2012 July 2012 ca Feb. 2012 Revenue Net Income Capex Ca Door Asset Target Morningstar Foods, LLC Ralcorp Holdings, Inc. Peet's Coffee & Tea, Inc. Pringles Business of P&G National Beef Packing Co. LLC Provimi SAS Foster's Group Ltd. Del Monte Foods Co. Ent. Value ($bn) 1.45 6.78 0.95 270 0.87 1.83 13.12 5.30 Ent Value LTM EBITDA 9.3x 12.1x 23. 2x 11.1x 3.7% 8.1x -122.9x B.8x 302 2.024 4339 Dec. 2011 EBITOA 156 560 40 243 300 224 (107) 603 1,625 1.322 383 1,458 5,808 2,298 4.547 3,713 Aug. 2011 June 2011 Nov. 2010 73 15 153 248 93 (554) (41) 20 04 238 587 13 2.102 8.900 4731 Aoquiror Saputo Inc ConAgra Foods, Inc. Joh A. Benckiser GmbH Kellogg Company Leucadia National Corp. Cargill, Inc SABMiller Plc Funds affiliated with KKR & Co. and others Ralcorp Holdings, Inc Nestl S.A Pinnacle Foods Group, Inc. Kraft Foods Inc. Altria Group, Inc J.M. Smucker Company Mars rated Ralcorp Holdings, Inc. The Blackstone Group, L.P. B.3x 12.5% 80 36 45 500 June 2010 Jan. 2010 Nov. 2009 Sept. 2009 Sept. 2008 June 2008 (21) 408) 44 313 48 599 2,100 921 5,975 1,891 1,754 6.780 1,103 1,809 750 1618 1.280 American Italian Pasta Co. N.A. Frozen Pizza Business of Kraft Birds Eye Foods, Inc. Cadbury plc UST LLC The Folgers Coffee Company Wm. Wrigley Jr. Company Foods Foods Group, Inc European Frozen Foods of Unilever Chef America, Inc. The Pillsbury Company The Quaker Oats Company 62 509 560 227 852 117 (109) (23) 240) (21) 303 1,130 1.28 3.70 1.37 21.40 11.50 3,40 23.02 2.64 2.14 2.20 2.60 10.40 14.01 4,47 19.02 2.91 747 8,129 1.417 829 5.517 919 1.786 151 298 144 1,609 971 388 1,251 234 241 222 179 1,005 928 449 1,364 342 Post For Apr. 2008 Nov. 2007 Feb. 2007 Aug. 2006 Aug 2006 Oct 2001 Dec. 2000 Oct. 2000 Pinnacle 13.3x 11.9x B.8x 18.4x 11.3x 8.9x 9.BX 14.5x 10.1x 15.8x 10.7% 13.7x 8.ox 16.200 51 (156) (269) 250 774 Permira Advisors Ltd Nestl S.A General Mills, Inc PepsiCo, Inc. Kellogg Company Philip Morris Companies Inc. ConAgra Foods. Inc 181 22 6,087 5.098 2,757 8.013 2,210 (114) 4665 176 378 34 140 14 583 4.014 150 9.252 2494 1,773 11,610 1.527 1,000 Keebler Foods Company Nabisco Holdings Corp International Home Foods June 2000 June 2000 Source: FactSet MANAGEMENT H.J. HEINZ M&A KEL848 Exhibit 4 (continued) VALUATION ANALYSIS 2 Campbell ConAgra Foods General Mills Groupe Danone 2011 13.0x 14.5x 16.0x 17.3x 18.5% Hershey Kellogg Kraft Nam 15.5x Price/Earnings 2012 2013(E) 13.6x 17.7% 13.7x 15.8x 15.0x 17.5x 16.8x 16.6x 21.9x 22.3x 15.0x 16.6x 16.5x 10.7% 18.3x 17.6x 17.7% 15.1x 16.7x 18.2x 18.7x 16.8x 19.2x 2014(E) 16.3x 14.2x 17.6x 19.1x 26.5x 16.8x 19.0x 21.9x 19.5x 19.9x 19.1x 18.8x Enterprise Value/EBITDA 2011 2012 2013(E) 8.7x 11.5x 7.6% 7.BX 11.6x 10.0x 9.6x 10.8x 11.8x 10.9x 10.7% 9.7x 11.6x 12.0x 10.2x 10.1x 11.2x 11.5x 10.2x 10.4x 11.2x 11.2x 12.3x 12.3x 10.1x 9.8x 10.3x 10.3x 11.7x 11.4x 8.8x 9.6x 10.8x 2014(E) 10.2x 9.4% 10.9x 11.8x 14.6% 11.3% 11.9x 13.8x 13.1x 12.0x 11.3x 10.4% Enterprise Val Free Cash Flow 2011 2012 2014) 2014/5) 15.3 18.4% 21 2x 14.3% 18.8x 24 x 30.1 184x 16.3% 20.3 22 3 20.8 19.1% 31.0 17.7% 38.1 20.1x B Ba 20.7% 23.7% 22.5% 32.6 13.7% 398x 38.9x 33.1x 96.8x 35,3K 23.2x 37.8x 20.8% 20 4x 23.4x 22.6x 22 2x 29,5% 22.1x 28.5x 22.0K 25.0% 45.9x 14.3% 19.8x 20.8% Mondelz Nestl S.A. PepsiCo Unilever Smucker 10.2x 17.0x 15.8x 15.8x 16.0x Mean Median 15.4x 15.8x 15.8x 15.1x 17.8x 17.6x 19.0x 19.0x 9.8x 10.1x 10.2x 10.1% 11.3x 11.3 11.7x 11.6% 25.5x 22.3% 24.9% 22.6% 23.8% 21.5% 28.8% 29.0x 24.7% 20.2% 22.2x 12.0x 17.0x 19.2x 10.4x 10.4x 12.8x 20.5x 15.6x Heinz 16.7x Source: FactSet J. HEINZ M&A KURA Exhibit 4 (continued) RETURNS ANALYSIS 2011 11.5 6.7 7.9 2011 1.18 0.05 Campbell Con Agra Foods General Mills Groupe Danone Hershey Kellogg Return on Assets (%) 2012 2013(E) 11.2 0.7 4.9 4.6 8.5 8.3 5.8 6.2 14.4 10.6 7.1 8.9 70 7.2 3.6 3.7 8,8 8.3 8.8 3.9 10.2 10.2 6.0 6.7 2014(E) 10.1 4.8 8,6 5.8 16.6 9.2 3.2 4.0 3.6 9.4 10.0 70 2011 07.4 16.7 23.9 13.0 09.0 02.8 14.5 10.4 Return on Equity (%) 2012 2013(E) 09.3 00.4 16.6 10.9 20.0 24.7 13.0 12.4 08.8 04.2 40.0 40.1 40.0 46.0 8.8 7,8 10.0 17.0 20,8 20.8 30.0 20.8 10,6 2014(E) 61.0 14.5 24.0 13.7 53.0 30.6 470 130 1.30 1.07 Dividend per Share 2012 2013) 20140 128 134 0.09 100 102 12 1 145 148 1.54 TOT 2.00 1.74 180 0.50 2.07 21 0.52 0.84 0.00 2.08 2.13 2.25 213 22 2.40 127 1.43 205 231 2.54 Kraft 1.10 Mondez Nestl S.A Pepsico Unilever Smucker 4,3 8.4 10.0 10.4 11.4 16.0 33.2 29.1 8.0 17.0 30.9 28.1 12.6 203 1.17 1.00 32.0 23.9 31.8 27,9 28.4 20.3 30.3 20.7 145 1.38 0.Z 102 1.00 IM 100 8.0 7.8 1.30 8.7 8.4 Mean Median 1.6 1.02 2.00 222 374 2.30 29.4 31.5 39.2 7.6 7.6 9.5 Heinz Source: Facts KA Exhibit 4 (continued) VALUATION ANALYSIS 1 2013(E) 2014(E) 8.5x 2.4x 2013(E) 2011 2011 9.8x 2.3x 4.0x 2.1x 11.5x 8.7x 2011 1.4x 0.8x 1.7% 1.8x Campbell ConAgra Foods General Mills Groupe Danone Hershey Kellogg Kraft Mondelz Nestl S.A PepsiCo Unilever Smucker 9.dx Price/Book 2012 9.Ox 11.6x 2.1x 2.6x 3.5x 4.7% 2.4x 2.4x 16.2x 15.7x 10.3x 8.3x 7.6% 1.2x 1.4x 3.0x 3.1x 5.1x 4.8x 5.Ox 5.5x 2.2x Prica/Sales 2012 1.4x 1.8x 0.8x 0.9x 1.5x 1.7% 1.6x 1.5x 2.3x 2.4x 1.4x 2014(E) 1.6K 0.0% 1.6x 1.6% 3.1x 1.6x 4.0x 2.1x 11.5x 8.7% 1.5x Pro Earnings to Growth 2012 2013(E) 2014) 9.0x 11.8% 8154 2.1x 2x 3.5x 47 24 24 27 18.2x 5.7% OS 10.3x 7.x d.dk 1.2x TAX 3. OK J.TX 3.4% 5.1x 4.8% 5.7% 5.0x 5.x 22x 2.7x 16.5x 6.3X 0.0X 1 Bv 1.8x 3.4x 5.7x 5.5x 2.2% 1.0x 3.Ox 4.9x 4.5x 1.1x 1.7X 1.8x 1.6x 1.8x 1.2x 2.1x 1.6x 1.7x 1.6x 1.5x 1.3x 2.1x 1.6x 1.7x 1.9x 2.3x 2.0x 1.7% 2.0x 1.0x 3.OX 4.9x 4.5% -- 1.0X 5.2x 4.2x 5.8x 4.3x 5.8x 4.8x 5.7x 5.1x Mean Median 1.8x 1.7% 1.6x 1.6x 5.2x 4.2x 1./X 1.7X 5.8x 4.3% 5.8x 4.8% 5.7% 5.1% 5.5x 58x 5.1x 2.0x 1.9x 1,5x 1.5x 7.6x 6.9x 5.5x Heinz 5.12 Source: FactSet. 23 SCHOOL OF MANAGEMENT H.J. HEINZ M&A KEL848 Exhibit 4 (continued) LEVERAGE ANALYSIS 2013(E) 201316 2014(E) 2011 0.6x 0.7x 0.5x 0.5x 1.2x 0.4x 2011 0.4x 0.8x 1.1x 1.7% 0.5x 1.2x 1.8x 2.1% Net Debt/EBITDA 2012 0.5x 0.4x 0.3x 0.3x 0.5x 0.5x 0.5x 0.5x 1.2x 1.5x 0.4x 0.4x 0.4x 0.4x 0.3x 0.4x 1.1x 1.Ox 0.6x 0.6x 1.0x 1.1x 0.7x 0.7x 2014(E) 0.5x 0.3x 0.5x 0.5x 1.8x 0.4x 0.4x 0.4x 1.3x 0.6x 1.1x 0.8x Campbell ConAgra Foods General Mills Groupe Danone Hershey Kellogg Kraft Mondelz Nestl S.A PepsiCo Unilever Smucker Debu Equity 2012 0.5x 0.8% 1.0x 1.3x 1.3x 1.4x 1.9x 2.7x 2.1x B. 1x 0.6x 0.6% 0.5x 0.5x 2.8x 2.9x 5.Ox 6.5x 1.1x 1.1x 2.3x 2.4x 3.2x 3.6x 2011 5.5x 2.5% 3.2x 2.3% 5.1% 6.8x AssetsEquity 2012 2013(E) 201415) 6 x 5.7% 4.7% 3.8% 3.2% 2.9% 3.OX 3.0 2.7% 2.4x 2.4% 2.3% 4.5% 3.1% 62% 4.4x 4.1x 6.5x 6.0x 5.8x 2.3% 1.8% 1.9% 2.1x 2.0% 18x 3.3x 3.3% 3.2% 2.7% 2.9% 2.7% 1.8x 1.8% 1.8x 0.8x 2.1X 0.3x 1.7x 0.6x 1.0x 0.8x 0.5x 0.4x 2.7x 4.1x 1.1x 2.1x 3.Ox 4.7% 0.9x 3.9x 2.5x 2.7x 2.0% 3.5% 3.2x 1.8x 1.6x 1.3x 3.Bx 3.2x 2.5x 1.9x 1.9x 1.6x 3.5x 3.2x 3.3% 3.1x 2.0x 1.9x 0.6x 0.5x 0.6x 0.5x 3.1x 2.8x 0.7x 0.5x 0.8x 0.6x Mean Median 3.9x 4.3x 3.9x 3.6x 1.8x 1.6x 1.3x 1.8x 0.7x 0.6x 0.5x Heinz 0.5x Source: FactSet