Popina Foods sells to Freedom Foods for $35 million.
Kennedy Needham has completed the $35m sale of Popina Foods: a market leader in oat-based cereals, muesli and snacks, to ASX-listed, Freedom Foods.
What started out as a significant capital raising to fund new assets for the expansion of Popina Food's oat-based muesli and cereal production facility at Dandenong, Victoria – evolved into a $35 million sale to Freedom Foods Group Limited, a leading ASX listed manufacturer of a range of beverages and food products including allergen free cereals and snacks.
Popina founder and MD, Arnold May first approached Kennedy Needham in 2012 in relation to a detailed business valuation and strategic plan. In 2014, Arnold May again approached Kennedy Needham, this time to facilitate the introduction of suitable equity partners.
The popularity of healthy cluster formatted oat-based cereals and related snack bars had continued to grow strongly, both domestically and internationally. With ovens working around-the-clock, unless funds could be raised in a timely manner for the purchase of additional manufacturing assets, the business would not be in a position to grow swiftly enough to capitalize on rapidly increasing demand. Armed with both an updated valuation and strategic plan Popina was primed for investment.
Michael Shaw, Kennedy Needham’s lead corporate advisor to Popina and an expert in the Food Industry and Agri-business sector, identified genuine potential in possibly divesting the whole business, and presented the idea to Arnold who was open to this pathway as an alternative growth strategy.
Michael Shaw said, “My area of expertise is the Food Industry. I have a deep and rich knowledge of the businesses involved, access to an extensive network which enables me to create successful solutions – I’m thoroughly delighted how well this worked out for Arnold and Freedom Foods. It was the perfect outcome“.
Amongst the targeted strategic investors or buyers, one potential party stood out as the leading contender: Freedom Foods Group Limited. An outright purchase of Popina aligned with Freedom’s significant international and domestic expansion plans. For Arnold May this would was a superb opportunity to realize a strategic value for Popina.
With the parties enthusiastic about the mutually beneficial opportunity, an exclusive Terms Sheet was entered into during late August 2015 with completion occurring in late November 2015.
You can read more about the sale in the case study. If you are looking for a buy-in partner, read ‘How to find a Buy-In partner for your company in 15 weeks’ for an overview.