Forbidden Foods Completes Acquisition of Oat Milk Goodness - 27 September 2024
FFF (FFF) Share Update September 2024 Thursday 26th
Forbidden Foods Completes Acquisition of Oat Milk Goodness
Forbidden Foods Limited (ASX: FFF) has successfully completed the acquisition of Oat Milk Goodness (OMG), a leading non-dairy business co-founded by Australian cricketer Steve Smith. This strategic move aims to strengthen Forbidden Foods' position in the fast-growing oat milk sector.
Instant Summary:
- Completion of all-scrip deal to acquire Oat Milk Goodness (OMG).
- OMG is co-founded by Australian cricketer Steve Smith.
- OMG's unique product offering is defined by its seed oil-free formula.
- OMG has established distribution in Australia and is targeting international markets, including India.
- The acquisition marks the first step in FFF’s transition to a leading brand manager in the 'Better for You' FMCG segment.
- Key integrations between the businesses are well progressed.
- OMG has achieved sales of over $364,000 between 1 July and 24 September 2024.
- Board changes include the appointment of Daniel Rootes as a Non-Executive Director.
Acquisition Details
Forbidden Foods Limited (ASX: FFF) has completed the acquisition of 100% of the issued capital of Good Oats Pty Ltd, trading under Oat Milk Goodness (OMG). The acquisition was finalized following an Extraordinary General Meeting (EGM) on 20 September 2024, where shareholders voted to approve the transaction.
Under the terms of the Share Purchase Agreement, Forbidden Foods acquired OMG for a consideration of $3.42 million, settled via the issue of 285 million new fully paid ordinary shares in Forbidden Foods at a deemed issue price of $0.012 per share.
Strategic Importance
OMG, co-founded by Australian cricketer Steve Smith, competes in the fast-growing oat milk sector with a unique product offering defined by its seed oil-free formula. The company has established strong distribution channels in Australia and is targeting international expansion opportunities, particularly in India.
The acquisition is a significant step in Forbidden Foods' strategy to become a leading brand manager in the 'Better for You' FMCG segment. The company is actively exploring additional acquisitions to further strengthen its market position.
Integration and Sales Momentum
Key integrations between Forbidden Foods and OMG are well progressed, focusing on streamlining logistics and supply chain management to generate cost savings. The company is also leveraging its combined market footprint in sales and distribution to create a leading FMCG business with complementary product offerings.
Since the announcement of the proposed acquisition, OMG has achieved sales of over $364,000 between 1 July and 24 September 2024, which will be recognized as revenue for the combined entity.
Board and Management Changes
Following the completion of the transaction, Forbidden Foods has implemented several changes to its Board of Directors. Ms. Katie Eshuys and Mr. Marcus Brown have resigned from their respective directorships, while Mr. Daniel Rootes, an experienced investment advisor, has been appointed as a Non-Executive Director.
The acquisition of OMG is expected to have a positive impact on Forbidden Foods' stock, as it strengthens the company's position in the growing non-dairy sector. The integration of OMG's unique product offerings and established distribution channels is likely to drive revenue growth and improve overall group margins.
Investor Reaction:
Analysts are likely to react positively to the acquisition, given the strategic fit and growth potential of OMG. The appointment of Daniel Rootes as a Non-Executive Director is also seen as a positive move, bringing valuable expertise and strategic insights to the Board.
Conclusion:
Investors should monitor the integration progress and sales performance of the combined entity. The strategic acquisition of OMG positions Forbidden Foods for significant growth in the non-dairy sector, making it an attractive investment opportunity.