- Happy Belly Food (HBFG) is making an acquisition
- The Vancouver-based consumer brands company signed a deal to acquire a 50-percent-stake of KOA Natural Foods
- KOA is an Ontario-based producer of hand-crafted snacks, and is already being carried at more than 3,000 retail outlets across Canada
- Happy Belly forecasts KOA to produce $2.3 million EBITDA this year, with gross revenue of $7.9 million
- The all-cash acquisition is worth $1.75 million
- Happy Belly Food Group stock (CSE:HBFG) is down 2.86 percent, trading at $0.17 at 3:32 pm ET
Happy Belly Food (HBFG) is making an acquisition.
The Vancouver-based consumer brands food group signed a deal to acquire a 50-percent-stake of KOA Natural Foods.
The company has officially signed a binding Letter of Intent and is paying $1,750,000 in the all-cash deal with no finders fees.
KOA is an Ontario-based producer of hand-crafted snacks, and is already being carried at more than 3,000 retail outlets across Canada. The company’s products are in some of the largest retailers in the country, including, Shoppers Drug Mart, Loblaw, and Sobeys.
Happy Belly forecasts KOA to produce $2.3 million EBITDA this year, with gross revenue of $7.9 million and $1.98 million in loans and other liabilities.
KOA has grown its revenue by over 30 percent over the last two years, while also maintaining a gross profit margin for its products of over 30 percent.
Happy Belly also retains the option to purchase the remaining 50-percent interest of KOA at its discretion.
The acquisition includes KOA’s existing 10,000-square-foot production facility in Ontario. The plant produces the company’s own products and also offers co-packing services to several North American brands, as well as a white label service.
“Today’s news is transformational for our company. This single transaction accelerates both our revenue as well as our profitability while solidifying our division of emerging CPG brands. KOA will immediately benefit from leveraging our infrastructure as well as our shared resource pool to benefit from synergies that will accelerate their growth,” Happy Belly Food Group Chief Investment Officer Sean Black said in a statement.
“KOA checks all the boxes for us when looking at M&A as they have great people, great food and excellent operations and people. Mariam and Javiera are the perfect partners for us. They are incredible female founders of a business in Canada that is growing at a steady revenue rate year over year so partnering with Happy Belly when our team has the experience, CPG bench strength and access to capital to support that growth was exactly what we built this company to do.”
Happy Belly Food Group (CSE:HBFG) is down 2.86 percent, trading at $0.17 at 3:32 pm ET.