Happy Belly Closes 100% Acquisition of Smile Tiger Coffee Roasters Inc

Rhea-AI Summary

Happy Belly Food Group (CSE: HBFG) (OTCQB: HBFGF) has completed its 100% acquisition of Smile Tiger Coffee Roasters on January 27th, 2025, marking its first entry into the coffee sector. The acquisition, valued at $250,000 CDN, was completed through a combination of $125,000 cash and 104,000 common shares worth $125,000.

This represents Happy Belly's 11th brand overall and 9th quick-service restaurant brand, with the purchase price estimated at 3.3x EBITDA based on Smile Tiger's 2024 sales exceeding $1,000,000. The acquisition includes Smile Tiger's coffee roasting capabilities, consumer-packaged goods, and white-label products, enabling Happy Belly to supply its own brands nationwide and capitalize on the growing coffee, tea, bubble tea, and energy drink markets.

Positive

• Purchase price of 3.3x EBITDA indicates favorable valuation
• Smile Tiger generates over $1,000,000 in annual sales (2024)
• Cash-flow-positive acquisition with no debt assumption
• Vertical integration opportunity through in-house coffee roasting capabilities
• Strategic entry into coffee/beverage sector with CPG potential

Negative

• Share issuance of 104,000 common shares causing minor dilution

Toronto, Ontario--(Newsfile Corp. - January 27, 2025) - Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company"), a leading consolidator of emerging food brands is happy to announce that it has closes, as of January 27^th, 2025, its 100% acquisition of Smile Tiger Coffee Roasters Inc ("Smile Tiger"), serving rich, bold blends bringing customers an exceptional coffee experience, roasted to perfection and tailored to delight even the most discerning coffee enthusiasts. This marks Happy Belly's first acquisition in the coffee sector.

Smile Tiger 1

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"Today marks a significant milestone for Happy Belly Food Group as we officially close on the 100% acquisition of Smile Tiger Coffee Roasters," said Sean Black, Chief Executive Officer of Happy Belly. "Kicking off 2025 with the signing of a definitive agreement with Smile Tiger and successfully closing the acquisition within just three weeks is a testament to the expertise and efficiency of our team."

"This acquisition represents a major step forward in our mission to become a leading consolidator of emerging food brands. Smile Tiger now becomes our 11th brand overall and our 9th quick-service restaurant (QSR) brand, introducing an exciting new category into our roll-up strategy. This addition not only broadens our portfolio but also strengthens our position as a key player in the food and beverage industry."

"Entering the coffee, tea, energy drink and bubble tea beverage category had been a goal we explored for some time, and acquiring Smile Tiger has marked a significant step forward for Happy Belly. As we executed our consolidation strategy focused on the 3 P's-People, Product, and Process-this acquisition represented an exciting entry into a category with great potential for sector consolidation and menu innovation. This milestone further underscored our commitment to creating shareholder value across our portfolio. Our disciplined approach to organic growth, coupled with accretive M&A, continues to drive our success. Acquiring cash-flow-positive brands that are debt-free and demonstrate positive same-store sales aligns with our low-risk strategy for delivering consistent returns."

Smile Tiger 2

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"Post-acquisition, our focus remains on maximizing the brand's potential. Our track record speaks for itself-whether with Heal Wellness, iQ Foods, Via Cibo, Rosie's Burgers, or Yolks Breakfast, we have consistently proven our ability to acquire high-potential assets at reasonable multiples and rapidly expand their EBITDA. Smile Tiger is no exception. This acquisition exemplifies our ability to identify and integrate strong-performing brands, setting them up for even greater success under our operational framework. We look forward to sharing development plans and forward opportunities this category presents."

Smile Tiger 3

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"Smile Tiger's coffee roasting capabilities, including consumer-packaged goods (CPG) and white-label products, provide large-scale commerce opportunities and enable us to supply our own brands nationwide. This strategic advantage, combined with delivering exceptional coffee and outstanding service, positions us to capitalize on the growing demand in the coffee, tea, bubble tea, energy drink, and refresher markets-categories transforming the beverage industry across North America. With a diverse portfolio of breakfast, lunch, and dinner concepts, Happy Belly consumes significant amounts of coffee, which represents a substantial growth opportunity for 2025."

We are just getting started

Acquisition Details
Happy Belly and Smile Tiger Coffee Roasters have signed a definitive acquisition agreement for the 100% acquisition of Smile Tiger Coffee Roasters by Happy Belly. Happy Belly has satisfied the purchase price of $250,000 CDN for this acquisition by way of paying $125,000 CDN in cash together with issuing 104,000 common shares of Happy Belly equal in value to $125,000 (based on a 10-day VWAP) at time of closing. This represents an estimated purchase price of 3.3x EBITDA based on 2024 sales of north of $1,000,000.

About Smile Tiger Coffee Roasters Inc.
Our coffee brand is built on the art of unique, in-house roasting. By sourcing premium, ethically grown beans from around the globe, we ensure every cup delivers unparalleled freshness and flavor. Our expert roasters meticulously craft each batch, unlocking the distinct profiles and aromas that set us apart. From rich, bold blends to delicate, nuanced single origins, our roasting process is a celebration of coffee's diversity. Committed to sustainability and quality, we bring you an exceptional coffee experience, roasted to perfection and tailored to delight even the most discerning coffee enthusiasts.

Franchising

For franchising inquiries please see www.happybellyfg.com/franchise-with-us/ or contact us at hello@happybellyfg.com.

About Happy Belly Food Group
Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company") is a leading consolidator of emerging food brands.

Happy Belly Food Group

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Sean Black
Chief Executive Officer

Shawn Moniz
Chief Operating Officer

FOR FURTHER INFORMATION, PLEASE VISIT:
www: www.happybellyfg.com or email hello@happybellyfg.com
If you wish to contact us please call: (604) 737-2303

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this press release, which has been prepared by management.

Cautionary Note Regarding Forward-Looking Statements

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to the Company within the meaning of applicable securities laws. Forward-Looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur and include the future performance of Happy Belly and her subsidiaries. Forward-Looking statements are based on the opinions and estimates at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. There are uncertainties inherent in forward-looking information, including factors beyond the Company's control. There are no assurances that the business plans for Happy Belly described in this news release will come into effect on the terms or time frame described herein. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Management's Discussion and Analysis and other disclosure filings with Canadian securities regulators, which are posted on www.sedarplus.ca.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/238516

FAQ

How much did Happy Belly (HBFGF) pay for Smile Tiger Coffee Roasters?

Happy Belly paid $250,000 CDN, consisting of $125,000 in cash and 104,000 common shares valued at $125,000.

What is the EBITDA multiple for Happy Belly's Smile Tiger acquisition?

The acquisition was completed at approximately 3.3x EBITDA based on Smile Tiger's 2024 sales of over $1,000,000.

How many brands does Happy Belly own after the Smile Tiger acquisition?

After acquiring Smile Tiger, Happy Belly owns 11 brands total, including 9 quick-service restaurant (QSR) brands.

What new capabilities does HBFGF gain from the Smile Tiger acquisition?

The acquisition provides Happy Belly with coffee roasting capabilities, consumer-packaged goods (CPG) production, and white-label products for nationwide distribution.

When did Happy Belly (HBFGF) complete the Smile Tiger acquisition?

Happy Belly completed the acquisition of Smile Tiger Coffee Roasters on January 27th, 2025.