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Private Equity & Emerging Domestic Markets Presented by Marcos A. Rodriguez, Managing Member, Palladium Equity Partners. Diversity Investment Conference: Expanding Investment Opportunities Through Diversity Sponsored by CalPERS & CalSTRS * San Jose, CA * April 24-25, 2006. CONFIDENTIAL
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Private Equity & Emerging Domestic Markets Presented by Marcos A. Rodriguez, Managing Member, Palladium Equity Partners DiversityInvestment Conference: Expanding Investment Opportunities Through Diversity Sponsored by CalPERS & CalSTRS * San Jose, CA * April 24-25, 2006 CONFIDENTIAL This presentation is for the intended recipient only. No portion of it may be distributed or copied.
WHY INVEST IN THE U.S. HISPANIC MARKET? Explosive Population Growth Rapid Consumption Growth Consumption growth 75% higher than total U.S. 1 of 2 new Americans is Hispanic High Degree of Business Formation Favorable Age Demographics 20% of Americans under 30 are Hispanic 1 of 3 new American businesses is Hispanic $700B Market
CORE TARGET MARKETS Investment in the U.S. Hispanic market can be focused on four “core target markets” • Companies Selling to U.S. Hispanics • Companies Leveraging U.S. Hispanic Products and Services into the Mainstream Market • Hispanic-Owned Companies • Latin American and European Companies / Management Teams Looking to Enter / Expand U.S. Operations
SIZE OF CORE TARGET MARKETS Core Target Market Estimated at $300 – $350 Billion and Growing at >10% Per Annum
MARKET OPPORTUNITIES Core Target Market 1: Selling to Hispanics Food and Beverage Expenditures ($Bn) Historical and Projected Spanish-Language Ad Spend Source: Hispanic Business Magazine, AHAA, Thomas Wiesel Partners.
FOOD OPPORTUNITIES Core Target Market 2: Hispanic Mainstream Mexican QSR: $6.8 Bn; Mexican FSR $1.3 Bn $10 Bn Opportunity in Hispanic-Themed Food Products and Restaurants Consumption of Mexican Sauces and Tortillas ($MM) QSR Industry by Segment Source: Technomic. Source: Packaged Facts. U.S. to Spend $1.3 Bn on Salsa and Tortillas in 2008
OVERVIEW OF TOP HISPANIC-OWNED BUSINESSES Core Target Market 3: Hispanic-Owned Businesses Hispanic Businesses Have Achieved Substantial Scale and Are Growing Rapidly Top Hispanic-Owned Businesses: Revenue Breakdown Top 500 Hispanic-Owned Businesses: Average Revenue ($MM) Revenues Growing Across Size Ranges Average Revenue Grew by 19% from 2003-2004 Top Hispanic-Owned Businesses: Revenue Breakdown Top 500 Hispanic-Owned Businesses by Industry Employment Increasing Across Size Ranges Substantial Hispanic Activity in Several Industries Source: Hispanic Business Magazine.
PARTNERSHIPS WITH GLOBAL CORPORATIONS LOOKING TO EXPAND IN U.S. MARKET Core Target Market 4: Foreign Partners Excellent Opportunity to Gain Access to Superior Resources and Managers • Investment Opportunities (all targets within the U.S.): • Global provider of communication services from U.S. to Latin America seeking a strategic and financial partner. Total equity need of $20 million. • U.S. provider of fresh-cut flowers with South American management team looking for a for a strategic acquisition. Total equity need of $30 million. • Building products manufacturer lead by South American management team seeking partner in U.S. to purchase largest competitor and expand existing U.S. operations. Total equity need in excess of $40 million. • European food company seeking a private equity joint venture partner to target the U.S. Hispanic market. Total equity need of $40 million.
