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    Task 2 - Notes On HappyHour Co v3

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    nanschatron26
    HappyHour Co. is a producer and marketer of beer, spirits, and non-alcoholic beverages based in Singapore that operates facilities across Southeast Asia. The majority owner, Ms. Happy, who founded the company in 1975, is looking to sell her 60% stake and retire in the next few years. Rumors indicate she has hired an advisor to value the company at approximately $3.5 billion. Industry reports note consolidation trends in the region and forecast continued growth in the beer and non-alcoholic beverage markets. HappyHour Co.'s revenues have increased yearly to over $1 billion currently, with EBITDA growing to $300 million driven by gains in its beer, spirits, and non

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    Task 2 - Notes On HappyHour Co v3

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    nanschatron26
    31 views3 pages
    HappyHour Co. is a producer and marketer of beer, spirits, and non-alcoholic beverages based in Singapore that operates facilities across Southeast Asia. The majority owner, Ms. Happy, who founded the company in 1975, is looking to sell her 60% stake and retire in the next few years. Rumors indicate she has hired an advisor to value the company at approximately $3.5 billion. Industry reports note consolidation trends in the region and forecast continued growth in the beer and non-alcoholic beverage markets. HappyHour Co.'s revenues have increased yearly to over $1 billion currently, with EBITDA growing to $300 million driven by gains in its beer, spirits, and non

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    Task 2 - Notes on HappyHour Co v3 (1)

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    HappyHour Co. is a producer and marketer of beer, spirits, and non-alcoholic beverages based in Singapore that operates facilities across Southeast Asia. The majority owner, Ms. Happy, who founded the company in 1975, is looking to sell her 60% stake and retire in the next few years. Rumors indicate she has hired an advisor to value the company at approximately $3.5 billion. Industry reports note consolidation trends in the region and forecast continued growth in the beer and non-alcoholic beverage markets. HappyHour Co.'s revenues have increased yearly to over $1 billion currently, with EBITDA growing to $300 million driven by gains in its beer, spirits, and non

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    31 views3 pages

    Task 2 - Notes On HappyHour Co v3

    Uploaded by

    nanschatron26
    HappyHour Co. is a producer and marketer of beer, spirits, and non-alcoholic beverages based in Singapore that operates facilities across Southeast Asia. The majority owner, Ms. Happy, who founded the company in 1975, is looking to sell her 60% stake and retire in the next few years. Rumors indicate she has hired an advisor to value the company at approximately $3.5 billion. Industry reports note consolidation trends in the region and forecast continued growth in the beer and non-alcoholic beverage markets. HappyHour Co.'s revenues have increased yearly to over $1 billion currently, with EBITDA growing to $300 million driven by gains in its beer, spirits, and non

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    Notes on HappyHour Co.

    Item 1: Company Website

    About Us
    • Producer and marketer of beer, spirits and non-alcoholic beverages
    • Operations also include distribution and direct sales
    • Geography of operations: Singapore, Malaysia, China
    • Owns and operates manufacturing facilities in Singapore and China, while manufacturing is
    outsourced in Malaysia to Brew Co.
    • Founding history: founded in 1975 by majority owner and co-founder Ms. Happy
    • Headquarters: Singapore
    • Growth strategy: recently expanded operations to China and has new facilities planned for
    Cambodia
    • Ownership structure:
    o Family 1 owned (Happy Family): 60%
    o Family 2 owned (Hour Family): 20%
    o Family 3 owned (Co Family): 20%

    Brand Offerings
    • Beer
    • Spirits
    o Vodka
    o Tequila
    • Non-alcoholic beverages
    o Soft drinks
    o Tea
    o Water
    o Functional (such as diet drinks)

    Key Strengths
    • High end product offerings in the spirits segment (premium valuation)
    • #1 player in beer and spirits in Singapore & Malaysia
    • #1 player in non-alcoholic beverages in Malaysia
    • Creating new bottling facilities in Cambodia and has a strong supply chain as well as good
    relationships with distributors
    Item 2: Press Article

    • There has been a sale rumor about majority owner and co-founder (Ms Happy) suggesting she is
    looking to sell the company
    • Quote from unnamed sources state that the majority owner of the company (Happy family)
    would like to sell the company and exit their stake, as Ms Happy is growing old, and has no-one
    in her close family to pass the business onto. Ms Happy is looking to retire in a few years.
    However, she would like to stay involved with the business, even after a sale.
    • Company is looking to sell to a player who would like to maintain the ideology of the founding
    family (i.e. a strategic).
    • Rumored to have hired a financial advisor which is quoting a preliminary valuation of US$ 3,500
    mm for the business.

    Item 3: Broker Industry Report

    • Overview of key players / competitors


    o HappyHour Co. (HQ: Singapore)
    o Spirit Bay (HQ: Indonesia)
    o Hipsters’ Ale (HQ: Malaysia)
    o Brew Co. (HQ: Malaysia)
    • Key valuation metrics (for indicative valuation)
    o EV/EBITDA range of 10.0x – 11.5x
    • M&A trends
    o Global consolidation occurring with large global conglomerates buying up regional
    champions elsewhere in the world
    o 2019 saw an increase in acquisitions for food and drink companies, including beer and
    spirit companies
    • Industry trends
    o Beer market in Asia is expected to continue growing at a CAGR of 10%
    o Increasing preference towards beer is expected to continue, reinforcing its place as one
    of the most popular alcoholic drink varieties
    o Renewed focus on healthy drinks, especially in southeast Asia where drinks have
    traditionally been sugary
    o Expected rising demand for tea (over coffee) as well as premium beers as discretionary
    incomes rise
    Item 4: Company Financials

    Overview of revenue, EBITDA and NPAT

    US$mm FY18A FY19A FY20E


    Revenue 900 961 1,071
    EBITDA 225 250 300
    NPAT 135 153 193

    EBITDA breakdown by segment

    US$mm FY18A FY19A FY20E


    Beer 100 110 135
    Spirits 75 85 105
    Non-alcoholic beverages 50 55 60

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