Above Food Announces Strategic Acquisition of The Redwood Group, LLC’s Specialty Crop Food Ingredients Division, Representing Significant U.S. Expansion
Above Food Ingredients Inc. (Nasdaq: ABVE) has announced a strategic acquisition of The Redwood Group, 's Specialty Crop Food Ingredients Division for US$34 million plus working capital. This accretive transaction involves a profitable operator that generated US$164 million in unaudited revenue in FY 2023. The acquisition expands Above Food's physical footprint internationally, adding its first U.S.-based sourcing, manufacturing, and distribution facilities.
The consideration includes US$8.1 million in cash and 5.6 million newly issued common shares of Above Food. The acquired assets supply high-quality grains, pulses, and specialty crops to customers in over 35 countries, focusing on high-growth product categories in both human and pet food markets. This aligns with Above Food's 'Seed-to-Fork' strategy and strengthens its position in the pet food category, which represents about 40% of the division's sales.
Above Food Ingredients Inc. (Nasdaq: ABVE) ha annunciato un'acquisizione strategica della Divisione Ingredienti Alimentari per Colture Speciali del gruppo Redwood, per un valore di 34 milioni di dollari USA più capitale circolante. Questa operazione redditizia coinvolge un operatore proficuo che ha generato 164 milioni di dollari USA di fatturato non verificato nell'anno fiscale 2023. L'acquisizione espande la presenza internazionale di Above Food, aggiungendo le sue prime strutture di approvvigionamento, produzione e distribuzione situate negli Stati Uniti.
Il corrispettivo include 8,1 milioni di dollari USA in contanti e 5,6 milioni di nuove azioni ordinarie di Above Food. Gli asset acquisiti forniscono cereali di alta qualità, legumi e colture speciali ai clienti in oltre 35 paesi, concentrandosi su categorie di prodotto ad alta crescita sia nei mercati alimentari per umani che per animali domestici. Questo si allinea con la strategia 'Seed-to-Fork' di Above Food e rafforza la sua posizione nel settore degli alimenti per animali domestici, che rappresenta circa 40% delle vendite della divisione.
Above Food Ingredients Inc. (Nasdaq: ABVE) ha anunciado una adquisición estratégica de la División de Ingredientes Alimentarios de Cultivos Especiales del Grupo Redwood, por 34 millones de dólares estadounidenses más capital de trabajo. Esta transacción rentable involucra a un operador que generó 164 millones de dólares en ingresos no auditados en el año fiscal 2023. La adquisición expande la presencia física de Above Food a nivel internacional, añadiendo sus primeras instalaciones de abastecimiento, fabricación y distribución basadas en EE. UU.
La contraprestación incluye 8,1 millones de dólares en efectivo y 5,6 millones de acciones ordinarias recién emitidas de Above Food. Los activos adquiridos suministran granos de alta calidad, legumbres y cultivos especiales a clientes en más de 35 países, enfocándose en categorías de productos de alto crecimiento tanto en los mercados de alimentos para humanos como para mascotas. Esto se alinea con la estrategia 'Seed-to-Fork' de Above Food y refuerza su posición en la categoría de alimentos para mascotas, que representa aproximadamente 40% de las ventas de la división.
Above Food Ingredients Inc. (Nasdaq: ABVE)는 Redwood Group의 전문 농작물 식품 성분 부서를 3,400만 달러 미국 달러와 운전 자본 금액으로 전략적으로 인수했다고 발표했습니다. 이 유익한 거래는 2023 회계연도에 1억 6,400만 달러의 비감사 수익을 창출한 수익성 있는 운영자를 포함합니다. 이번 인수로 Above Food는 미국에 첫 글로벌 소싱, 제조 및 유통 시설을 추가하여 국제적으로 물리적 입지를 확대합니다.
지급금에는 810만 달러 현금 및 560만 개의 새로 발행된 보통주가 포함됩니다. 인수한 자산은 35개국 이상에 고품질 곡물, 콩류 및 특수 농작물을 공급하며, 인간 및 반려동물 식품 시장의 고성장 제품 카테고리에 중점을 두고 있습니다. 이는 Above Food의 'Seed-to-Fork' 전략과 일치하며, 반려동물 식품 카테고리에서의 입지를 강화합니다. 이는 해당 부문의 판매의 약 40%를 차지합니다.
Above Food Ingredients Inc. (Nasdaq: ABVE) a annoncé une acquisition stratégique de la division des ingrédients alimentaires à base de cultures spéciales du groupe Redwood, pour un montant de 34 millions de dollars américains plus le fonds de roulement. Cette transaction lucrative implique un opérateur rentable qui a généré 164 millions de dollars de revenus non vérifiés au cours de l'exercice 2023. L'acquisition élargit l'empreinte physique d'Above Food à l'international, ajoutant ses premières installations de production, de fabrication et de distribution basées aux États-Unis.
La considération comprend 8,1 millions de dollars en espèces et 5,6 millions d'actions ordinaires nouvellement émises d'Above Food. Les actifs acquis fournissent des grains de haute qualité, des légumineuses et des cultures spéciales à des clients dans plus de 35 pays, en se concentrant sur des catégories de produits à forte croissance tant sur les marchés alimentaires pour les humains que pour les animaux de compagnie. Cela s'aligne sur la stratégie 'Seed-to-Fork' d'Above Food et renforce sa position dans la catégorie des aliments pour animaux de compagnie, qui représente environ 40 % des ventes de la division.
Above Food Ingredients Inc. (Nasdaq: ABVE) hat eine strategische Übernahme der Specialty Crop Food Ingredients Division der Redwood Group für 34 Millionen US-Dollar zzgl. Betriebskapital angekündigt. Diese ertragsbringende Transaktion betrifft einen profitablen Betreiber, der im Geschäftsjahr 2023 164 Millionen US-Dollar an ungeprüften Einnahmen generiert hat. Die Übernahme erweitert den internationalen Fußabdruck von Above Food, indem erste US-amerikanische Beschaffungs-, Produktions- und Vertriebsstätten hinzugefügt werden.
Die Gegenleistung umfasst 8,1 Millionen US-Dollar in bar und 5,6 Millionen neu ausgegebene Stammaktien von Above Food. Die übernommenen Vermögenswerte liefern hochwertige Getreide, Hülsenfrüchte und Spezialkulturen an Kunden in über 35 Ländern und konzentrieren sich auf Produktkategorien mit hohem Wachstum in den Märkten für Lebensmittel für Menschen und Haustiere. Dies steht im Einklang mit der 'Seed-to-Fork'-Strategie von Above Food und stärkt die Position im Bereich Tiernahrung, der etwa 40 % des Umsatzes der Division ausmacht.
- Acquisition of a profitable division with US$164 million in unaudited revenue for FY 2023
- Expansion into U.S. market with first physical facilities for sourcing, manufacturing, and distribution
- Access to high-growth markets, including pet food (40% of division's sales)
- Addition of value-added capabilities driving margin optimization
- Exclusive supplier network in North American pulse-growing region
- Asset-light infrastructure with both owned and exclusive third-party partner facilities
- Significant cash outlay of US$8.1 million for the acquisition
- Potential dilution of existing shareholders due to issuance of 5.6 million new common shares
Insights
This acquisition is a strategic move for Above Food, significantly expanding its U.S. presence and enhancing its vertical integration capabilities. The deal's structure, involving
The acquisition strengthens Above Food's position in the high-growth pet food market, which accounts for
This acquisition positions Above Food to capitalize on two significant market trends: the growing demand for sustainable plant-based foods and the expanding pet food industry. The human food market, valued at approximately
The acquisition's value-added capabilities and diverse supplier network should provide Above Food with a competitive edge, allowing for better risk mitigation and potential margin improvements. The company's expanded footprint, now including U.S.-based facilities, could lead to increased market share and improved operational efficiencies. This strategic move may position Above Food as a more formidable player in the plant-based and specialty crop markets.
This acquisition significantly enhances Above Food's supply chain capabilities. By integrating The Redwood Group's Specialty Crop Food Ingredient Division, Above Food gains access to a vast origination network in key North American pulse-growing regions. This expansion strengthens their "Seed-to-Fork" approach, providing greater control over quality, sustainability and traceability.
The deal's asset-light infrastructure model, combining owned facilities with exclusive third-party partnerships, offers operational flexibility and scalability without heavy capital investments. This structure could lead to improved margin optimization and risk mitigation. The acquisition also opens up new export opportunities, particularly in the European market, through the addition of the Stanford, Montana facility. These enhancements to Above Food's supply chain could result in improved operational efficiency and competitive advantage in the specialty crop market.
- Accretive transaction of a scaled and profitable operator that generated US
$164 million of unaudited revenue in FY 2023. - The Redwood Group, LLC is a leading supplier of pulses, pulse ingredients, and specialty crops to high-growth customer segments in both the human and pet food markets.
- Acquisition expands Above Food’s physical footprint internationally, adding its first United States-based sourcing, manufacturing and distribution facilities, augmenting its capabilities across its entire ‘Seed-to-Fork’ value chain.
REGINA, Saskatchewan and MISSION, Kan. and CHESTER, Mont., Aug. 09, 2024 (GLOBE NEWSWIRE) -- Above Food Ingredients Inc. (Nasdaq: ABVE, ABVE.W) (“Above Food” or the “Company”), an innovative food company leveraging its vertically integrated supply chain to deliver differentiated ingredients and consumer products, announces that it has entered into a definitive purchase agreement to acquire the Montana-based Specialty Crop Food Ingredient Division (“Assets”) of The Redwood Group, LLC (“TRG”), for consideration of US
The Assets supply high-quality grains, pulses, and specialty crops to customers in over 35 countries in high-growth product categories in both the human and pet food markets. Its vertically integrated model spans from the farm to the consumer, encompassing origination, merchandising, processing, and value-added finishing. The Assets achieve structurally higher margins as a result of its value-added approach, differentiating it from commoditized food and ingredient suppliers, in alignment with Above Food’s strategy. In the fiscal year ended December 31, 2023, the Assets generated unaudited revenue of US
“This acquisition marks a major milestone for Above Food and strengthens our international footprint as our first U.S. physical facilities while also significantly growing our market share of the high-growth pet food category,” said Lionel Kambeitz, Founder, President, Chief Executive Officer, and Executive Chairman of Above Food. “TRG’s Specialty Crop Food Ingredient division operates in full harmony with our ‘Seed-to-Fork’ approach, providing us with top-tier processing and storage assets supported by end-to-end quality assurance, product development and safety protocols, while bringing strong relationships with growers, suppliers, and customers. It is a complete business with origination partners that are similarly utilizing sustainable farming practices that are consistent with our Canadian growers, which establishes broader reach across North America that we can leverage for the benefit of our shareholders.”
“The sale of our Specialty Crop Food Ingredient Division represents a significant milestone in The Redwood Group’s growth,” said Mike Kincaid, founder and President of TRG. “This is a bittersweet moment in our history, yet represents a tremendous opportunity for personal and professional growth for our teams in Mission, Kansas and Chester, Montana to join an organization principally focused on specialty crops and value-add opportunities in the region as well as globally. Above Food is adding a well-led group of hardworking innovators, who I expect to continue flourishing and immediately improve utilization and expand the margin structure of several of Above Food’s assets. We are grateful for our team of people who helped build this business and are thankful for the Above Food team’s thoughtful approach to this acquisition.”
Above Food’s Seed-to-Fork approach is central to the Company's strategic positioning, enabling it to maintain control over its entire supply chain, ensuring that its standards for quality, sustainability, safety, and traceability are upheld while sustaining its commitment to regenerative agriculture for the long-term health, resilience, and security of the food supply. By integrating owned production and processing facilities, efficient logistics, and direct distribution channels, Above Food drives strong margins and operational efficiencies.
Strategic and Financial Highlights
- Expands Above Food’s North American market penetration in large, high-growth markets with an emphasis on pet food – Ideally positioned to capture growth stemming from robust demand for sustainably produced plant-based human food and pet food, representing total addressable markets of approximately US
$202 billion and US$26 billion , respectively. Pet food represents approximately40% of TRG’s Specialty Crop Food Ingredient division’s sales. - Delivers direct customer relationships and strong value-added capabilities, driving margin optimization – Extensive investments in processing systems offer the opportunity to scale production volumes further. Further, its value-added capabilities meet the needs of its direct customers, allowing for participation in the most attractive market segments and concurrently mitigating lower-margin sales channels.
- Exclusive, diverse, and long-standing supplier network – Vast origination network in the heart of the North American pulse-growing region, including an established footprint of both owned and exclusive third-party partner facilities. Multi-generational relationships with growers afford the Asset’s unique origination advantages, surety and consistency of supply, and differentiated crop cycle insights. This allows for better mitigation of risk around localized crop conditions and the creation of unique supply chain arbitrage, which translates into margin upside.
- Multi-faceted and actionable organic growth opportunities – Near-term opportunities to drive scale across the current backlog of customer demand for new differentiated products. The recent addition of a new company-controlled facility in Stanford, Montana (with an option to purchase later) provides additional processing capacity and supports the expansion of its export business with deeper penetration into the European market.
- Asset-light infrastructure and advantaged operating model – The Assets maintain a portfolio of both owned facilities and third-party facilities under exclusive, long-term, and renewable agreements. Its third-party capacity offers benefits of outright ownership and balance sheet flexibility without the burdens of capital expenditures, maintenance costs, and operational staffing needs. Its durable operating model is also enabled by agreements that transfer risk in non-commodity components of the variable cost structure (such as freight) to the counterparty to insulate margins further.
Capital One Securities acted as exclusive financial advisor to The Redwood Group LLC on the transaction.
About Above Food
Above Food Ingredients Inc. (Nasdaq: ABVE, ABVE.W) is a differentiated, regenerative ingredient company that celebrates delicious products made with real, nutritious, flavorful ingredients and delivered with transparency. Above Food’s vision is to create a healthier world — one seed, one field, and one bite at a time. With a robust chain of custody of plant proteins, enabled by scaled operations and infrastructure in primary agriculture and processing, and proprietary seed development capabilities that leverage the power of artificial intelligence-driven genomics, Above Food delivers nutritious foods to businesses and consumers with traceability and sustainability. Above Food’s consumer products and brands are available and in leading grocers across Canada and the United States.
About The Redwood Group
The Redwood Group specializes in food ingredient supply, feed ingredient supply, grain merchandising, physical and financial energy solutions, and logistics solutions. Its focus is to add value by providing access to a broad range of commodities while being attentive, responsive, and dedicated to its customers.
Non-GAAP Financial Measures
This press release contains disclosure of the Asset’s adjusted EBITDA, which is a non-GAAP financial measure as defined under SEC rules. As required by SEC rules, the Company has provided a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measures in this press release. The Company believes that presentation of this non-GAAP financial measure improves the transparency of the Company's disclosures and provides a meaningful presentation of the Asset’s results. This non-GAAP financial measure has limitations as an analytical tool as it does not have a standardized meaning prescribed by U.S. GAAP. The non-GAAP financial measure that Above Food or TRG uses for the Assets may not be the same non-GAAP financial measure, and may not be calculated in the same manner, as that of other companies and, therefore, is unlikely to be comparable to similar measures presented by other companies. Rather, this non-GAAP financial measure is provided as a supplement to corresponding U.S. GAAP measures to provide additional information regarding the results of operations from management’s perspective. Accordingly, the non-GAAP financial measure should not be considered a substitute for, in isolation from, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. The non-GAAP financial measure presented in this press release is reconciled to its closest reported U.S. GAAP financial measure.
Reconciliation of Non-GAAP Financial Measure
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| Transloading charges - minimum commitment | ( | |||||||||||||||
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Management adjustments include adjustments for freight, discontinued operations, non-recurring adjustments, corporate overhead allocations, normalization, transloading charges and incentive compensation.
Cautionary Statement Regarding Forward-Looking Statements
This press release may contain “forward-looking information” within the meaning of the United States federal securities laws and applicable Canadian securities laws. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” future,” “opportunity,” “plan,” “may,” “should,” “will,” “could,” “will be,” will continue,” and similar expressions and include, without limitation, statements about the ability of or expectations regarding the future performance of our business and operations; expectations regarding revenues, expenses, gross profit, gross profit margin and anticipated cash needs; expectations regarding cash flow, liquidity and sources of funding, including the ability to raise additional capital; expectations regarding capital expenditures; expectations regarding Above Food's ability to execute its growth strategy; expectations regarding our ability to maintain and enhance our platform and synergistic portfolio of ingredients and consumer products; and expectations regarding our ability to differentiate ourselves from competitors.
Forward-looking statements are based on the current expectations of Above Food's management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. There may be risks that Above Food presently does not know or that Above Food currently believes are immaterial that could also cause actual results to differ from those contained in forward-looking statements. In addition, forward-looking statements provide Above Food’s expectations, plans or forecasts of future events and views as of the date of this communication. Above Food anticipates that subsequent events and developments will cause Above Food’s assessments to change. However, while Above Food may elect to update these forward-looking statements in the future, Above Food specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Above Food’s assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements. Nothing herein should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results in such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements in this communication, which speak only as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein.
Contacts
Media:
media@abovefood.com
Investors:
investors@abovefood.com
FAQ
What is the value of Above Food's acquisition of The Redwood Group's Specialty Crop Food Ingredient Division?
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