GroundForce Capital Announces the Acquisition of OWYN by The Simply Good Foods Company

Rhea-AI Summary

GroundForce Capital announces the sale of its portfolio company, Only What You Need (OWYN), to The Simply Good Foods Company (Nasdaq: SMPL) for $280 million. OWYN, a leading ready-to-drink (RTD) protein shake brand, has grown nearly 10x since GroundForce Capital's initial investment in 2019. The company's growth was driven by product development, retail expansion, and a strong omni-channel strategy. This acquisition aligns with both companies' goals of delivering healthier and more sustainable products to a wider audience. GroundForce Capital highlights the sale as a significant milestone, reflecting broader industry trends towards transparency and quality in food products.

Positive

• OWYN sold for $280 million, a significant financial milestone.
• OWYN grew nearly 10x since 2019, indicating strong market performance.
• Successful omni-channel strategy and retail expansion.
• Ingredient transparency and zero artificial additives in OWYN products.
• Reflects broader trends towards healthier, sustainable food options.
• Acquisition likely to expand the reach of OWYN products.

Negative

• No information on potential integration challenges post-acquisition.
• Possible dilution of focus for The Simply Good Foods Company post-acquisition.
• Uncertainty around how the acquisition will impact OWYN's product innovation pace.

Insights

Financial Analyst

The acquisition of OWYN by The Simply Good Foods Company for $280 million is a significant transaction. It underscores Simply Good Foods' strategy of diversifying its portfolio with high-growth brands. Financially, this acquisition could be highly accretive, given OWYN's impressive growth trajectory of nearly 10x since 2019. This kind of exponential growth suggests strong product-market fit and effective execution of an omni-channel strategy. The valuation at $280 million could be seen as reasonable, considering OWYN's rapid expansion and loyal consumer base.

For Simply Good Foods, this acquisition could broaden their market reach and enhance their position in the wellness and health segment. However, integrating OWYN's operations seamlessly could pose short-term challenges and incur costs. Long-term, if managed well, this acquisition can provide substantial growth and revenue diversification.

For retail investors, it's essential to monitor how Simply Good Foods manages this integration and whether OWYN continues its growth under new ownership. The acquisition aligns well with market trends favoring transparency and health-focused products, potentially driving further consumer demand.

Market Research Analyst

OWYN's acquisition highlights significant trends in the health and wellness sector. Consumers increasingly prefer products with clean, premium ingredients, reflecting a broader industry shift towards ingredient transparency and healthier options. OWYN's success, driven by a mainstream brand proposition, indicates strong market resonance and consumer demand for RTD protein shakes that are both tasty and health-conscious.

The market for RTD protein shakes is competitive, but OWYN has carved out a niche by emphasizing quality and transparency. This acquisition by Simply Good Foods not only validates OWYN's market strategy but also suggests that larger players are willing to invest heavily in niche brands that align with evolving consumer preferences.

Retail investors should note the acquisition’s potential to strengthen Simply Good Foods' product portfolio and market position. The focus on health and sustainability is likely to continue driving growth in this sector. Monitoring consumer reception and sales growth post-acquisition will be important to evaluating the long-term success of this deal.

SAN FRANCISCO & LOS ANGELES--(BUSINESS WIRE)-- GroundForce Capital, an investment management firm that backs high-potential B2B and B2C companies seeking to improve the health and longevity of people and the planet, is pleased to announce the sale of Only What You Need (OWYN) to The Simply Good Foods Company (Nasdaq: SMPL) for $280 million. OWYN is the fastest-growing ready-to-drink (RTD)⁽¹⁾ protein shake brand in the market that unites great taste and ingredient transparency. GroundForce Capital is the second-largest shareholder in OWYN.

GroundForce Capital first invested in OWYN in 2019, driven by an ongoing thesis centered around ingredient transparency in the RTD protein category. All OWYN products contain clean, premium ingredients with zero artificial additives. Since GroundForce Capital’s initial investment, OWYN has grown nearly 10x and materially improved all key business fundamentals. This growth was fueled by the acceleration of new product development, a highly successful omni-channel strategy, retail expansion, and a distinctive mainstream brand proposition that resonated with a highly engaged, passionate core consumer base. This acquisition marks a significant milestone for both OWYN and GroundForce Capital, reinforcing their shared mission to bring healthier and more sustainable products to a broader audience.

"We were honored to support CEO Mark Olivieri and the entire OWYN team in helping them take the original vision of founders Kathryn Moos and Jeff Mroz and build it into an extraordinary brand and company,” said Mark Rampolla, Co-Founder and Managing Partner of GroundForce Capital. “We look forward to seeing OWYN continue to grow, thrive, and endure for decades to come.”

"OWYN’s journey exemplifies the kind of growth, impact, and outcome we aim to achieve with all of our investments," said Dan Gluck, Co-Founder and Managing Partner of GroundForce Capital. "This acquisition not only highlights OWYN's success but also underscores the broader trends in the industry towards healthier, more transparent food options. GroundForce Capital will continue to support innovative companies that drive meaningful change in the market."

GroundForce Capital remains committed to investing in B2B and B2C companies tackling the most pressing issues tied to people and the planet within the consumer, food, and food-related sectors.

For The Simply Good Foods Company press release, please visit: https://www.thesimplygoodfoodscompany.com/news-releases/news-release-details/simply-good-foods-company-completes-acquisition-only-what-you.

About GroundForce Capital

GroundForce Capital is an investment management firm that backs high-potential B2B and B2C companies seeking to improve the health and longevity of people and the planet. The firm provides capital, strategic guidance and operating expertise to visionary companies including Bobbie, Liquid Death, OWYN, Miyoko's Creamery, KinderFarms, Thistle, and Vive Organic. GroundForce Capital's leadership team is comprised of innovators behind leading food and beverage brands, such as ZICO Beverages, an early pioneer in the coconut water category acquired by The Coca-Cola Company in 2013, and Health Warrior, a superfood company purchased by PepsiCo in 2018.

GroundForce Capital has offices in the San Francisco Bay Area and Los Angeles. For more information about the Firm, visit GroundForceCapital.com.

⁽¹⁾ Source: Total MULO Dollar Sales for the 52 Week Period Ending 3/24/24.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240613763644/en/

Media Relations

ir@groundforcecapital.com

Source: GroundForce Capital

FAQ

What is the value of the acquisition of OWYN by The Simply Good Foods Company?

The acquisition of OWYN by The Simply Good Foods Company is valued at $280 million.

How has OWYN performed since GroundForce Capital's investment?

OWYN has grown nearly 10x since GroundForce Capital's initial investment in 2019.

What are the key drivers behind OWYN's growth?

OWYN's growth was driven by product development, retail expansion, and a highly successful omni-channel strategy.

What is the stock symbol for The Simply Good Foods Company?

The stock symbol for The Simply Good Foods Company is SMPL.

What does the acquisition of OWYN signify for GroundForce Capital?

The acquisition marks a significant milestone, reinforcing GroundForce Capital's mission to support healthier and more sustainable products.

What trends does the acquisition of OWYN highlight in the market?

The acquisition underscores broader industry trends towards healthier, more transparent food options.