Nasdaq-listed Above Food Ingredients has agreed to acquire the speciality crop food ingredient unit of Redwood Group for $34m plus working capital, pending final adjustments and customary closing conditions.
The acquisition will be settled with $8.1m in cash and 5.6 million newly issued common shares of Above Food.
The acquired assets, which provide grains, pulses, and speciality crops, serve customers in over 35 countries across both human and pet food markets. This vertically integrated operation spans from farm origination to consumer delivery, including merchandising, processing, and value-added finishing.
In the fiscal year ending 31 December 2023, the assets reported unaudited revenue of $164m and an average annual adjusted EBITDA of $5.3m for fiscal years 2021, 2022, and 2023.
The acquisition will bolster Above Food’s presence in North America, especially in the pet food sector, which represents 40% of the speciality crop food ingredient unit’s sales. This move positions the company to benefit from the expanding plant-based food and pet food markets.
The assets are said to provide strong customer relationships, value-added capabilities, and a robust supplier network, offering advantages in supply consistency and risk management. Additionally, the deal opens growth opportunities by scaling production and expanding into the European market through a new facility in Stanford, Montana.
Above Food founder, president, CEO, and executive chairman Lionel Kambeitz said: “This acquisition marks a major milestone for Above Food and strengthens our international footprint as our first US physical facilities while also significantly growing our market share of the high-growth pet food category.”
Kambeitz further said that the speciality crop food ingredient division aligns with the company’s ‘Seed-to-Fork’ approach, offering top-tier processing and storage assets and strong relationships with growers, suppliers, and customers.
Redwood Group founder and president Mike Kincaid said: “The sale of our Specialty Crop Food Ingredient Division represents a significant milestone in The Redwood Group’s growth.
“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 organisation principally focused on specialty crops and value-add opportunities in the region as well as globally.”
Capital One Securities served as the exclusive financial adviser to Redwood Group for this transaction.
Recently, Above Food completed its previously announced merger with Bite Acquisition, a special purpose acquisition company (SPAC), in a move to become a publicly traded company.
