Smart for Life Provides Update on Pending Acquisition

Rhea-AI Summary

Smart for Life (Nasdaq: SMFL) announced a pending acquisition projected to generate over $10 million in revenue and be accretive to earnings. The target also reported an EBITDA exceeding $2 million for the past twelve months, aligning with the company’s Buy-and-Build strategy. The acquisition process is nearing completion with due diligence finalized and formal audits underway, with the expectation of closing within thirty days.

The integration will enhance contract manufacturing efficiencies, presently costing over $5 million annually, by migrating operations to Smart for Life’s Miami facility. This acquisition is deemed a significant step toward achieving the company's goal of $100 million in annualized revenues in 2023.

Positive

• Projected revenue contribution exceeding $10 million from acquisition.
• Acquisition aligns with Buy-and-Build strategy to solidify market position.
• Expected annual EBITDA from acquisition likely over $2 million.
• Cost savings anticipated by moving manufacturing to Miami facility.

Negative

• None.

Anticipated Closing within the Next 30 Days

Acquisition Expected to Contribute in Excess of $10 Million of Revenue
and Accretive to Earnings

MIAMI, April 17, 2023 (GLOBE NEWSWIRE) -- Smart for Life, Inc. (Nasdaq: SMFL) (“Smart for Life” or the “Company”), a global leader in the Health & Wellness sector marketing and manufacturing nutritional supplements and foods worldwide, today provided a business update on the previously announced pending acquisition.

This acquisition target is currently generating estimated revenue in excess of $10 million and over $2 million of EBITDA for the trailing twelve months. The acquisition is a validation of the Company’s Buy-and-Build strategy designed to establish Smart for Life as a major international force in the Health & Wellness sector.

“We are excited to announce that internal due diligence has been concluded and we are finalizing the formal audit for the planned acquisition,” stated Darren Minton, the Chief Executive Officer of Smart for Life. “In addition, we expect definitive agreements, including the Stock Purchase Agreement, Seller Notes and Employment Agreement will be executed shortly. Upon closing, this would be our largest and most profitable acquisition to date, and we look forward to integrating this brand into our exciting family of products.”

The Company also noted that a material economic benefit of the acquisition is the immediate migration of the acquisition’s contract manufacturing business to the Company’s Bonne Santé Natural Manufacturing facility in Miami. The acquisition’s contract manufacturing expenditures are currently in excess of $5 million annually. A video regarding the Company’s manufacturing facility is available at: www.bonnesantemanufacturing.com/video.

Mr. Minton concluded, “This transaction is another building block in our family of brands as we move toward our previously stated mission of $100 million in annualized revenues in 2023.”

“On completion of the acquisition, the Company anticipates launching a robust investor and public awareness program utilizing a broad array of communications tools,” stated A.J. Cervantes, Jr. Chairman of Smart for Life.

Completion of the acquisition is subject to a number of conditions including finalization of the audit and financing.

About Smart for Life, Inc.

Smart for Life, Inc. (Nasdaq: SMFL) is engaged in the development, marketing, manufacturing, acquisition, operation and sale of a broad spectrum of nutritional and related products with an emphasis on health and wellness. Structured as a publicly held global holding company, the Company is executing a Buy-and-Build strategy with serial accretive acquisitions creating a vertically integrated company with an objective of aggregating companies generating a minimum of $300 million in revenues by the fourth quarter of 2026. To drive growth and earnings, Smart for Life is developing proprietary products as well as acquiring other profitable companies, encompassing brands, manufacturing and distribution channels. The Company currently operates five subsidiaries including Doctors Scientific Organica, Nexus Offers, Bonne Santé Natural Manufacturing, GSP Nutrition and Ceautamed Worldwide. For more information about Smart for Life, please visit: www.smartforlifecorp.com.

The company’s previously issued letter to shareholders is available at: www.smartforlifecorp.com/2023/01/12/smart-for-life-ceo-issues-year-end-letter-to-shareholders/.

The Company recently released a video report from A.J. Cervantes, Jr., the Company’s Chairman. That report can be accessed here:
https://smartforlifecorp.com/2023/04/02/chairmans-video-report/

Investor material and a Fact Sheet with additional information about Smart for Life is available at: www.smartforlifecorp.com/investor-center.

Forward-Looking Statements

This press release may contain information about our views of future expectations, plans and prospects that constitute forward-looking statements. All forward-looking statements are based on management’s beliefs, assumptions and expectations of Smart for Life’s future economic performance, taking into account the information currently available to it. These statements are not statements of historical fact. Although Smart for Life believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Smart for Life does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. No assurances can be made that Smart for Life will successfully acquire its acquisition targets. Forward-looking statements are subject to a number of factors, risks and uncertainties, some of which are not currently known to us, that may cause Smart for Life’s actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial position. Actual results may differ materially from the expectations discussed in forward-looking statements. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in local or national economic conditions and other risks set forth in “Risk Factors” included in our filings with the Securities and Exchange Commission.

Disclaimer

The information provided in this press release is intended for general knowledge only and is not a substitute for professional medical advice or treatment for specific medical conditions. Always seek the advice of your physician or other qualified health care provider with any questions you may have regarding a medical condition. This information is not intended to diagnose, treat, cure or prevent any disease.

Investor Relations Contact

Crescendo Communications, LLC
Tel: (212) 671-1021
SMFL@crescendo-ir.com

FAQ

What is the expected revenue from Smart for Life's acquisition?

Smart for Life's acquisition is expected to contribute over $10 million in revenue.

What is the anticipated EBITDA from the acquisition by Smart for Life?

The anticipated EBITDA from the acquisition is over $2 million for the trailing twelve months.

When is the acquisition by Smart for Life expected to close?

The acquisition is expected to close within the next 30 days.

How does the acquisition align with Smart for Life’s strategic goals?

The acquisition supports Smart for Life's Buy-and-Build strategy, aimed at establishing a significant presence in the Health & Wellness sector.

What cost savings does Smart for Life expect from the acquisition?

Smart for Life expects cost savings by migrating manufacturing operations to its Miami facility, which can currently incur over $5 million annually.