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Keytone to get a health kick with Super Cubes deal
Posted on Thursday, 19 September 2019 12:51
Keytone Dairy is buying Australia-based lifestyle health and wellness brand 40Forty Foods, also known as Super Cubes, for AUD 726,000 (USD 496,578).
The purchase price represents a multiple of 1.4x the target’s expected earnings before interest, taxes, depreciation and amortisation for fiscal 2021 for the 12 months ended 30th June.
The deal includes an upfront sum of AUD 120,000 in cash, a settlement of AUD 463,000 of the target’s debt and a deferred cash payment of AUD 143,000 over a two-year period.
Keytone will also offer shares as part of an earnout, dependent on certain performance-related milestones being achieved by Super Cubes.
The deal remains subject to due diligence, as well as regulatory and shareholder approval and will be funded using existing cash reserves and equity.
Established in 2018, Sugar Cubes claims to be the first company of its kind in the marketplace and produces a range of natural, frozen cubes of fruit and vegetables, among other ingredients, used to make smoothies.
The target offerings are sold nationally in retail chains such as Woolworths and can be found across 400 independent supermarkets in Australia.
Sugar Cubes also has a presence online with over 15,000 users visiting its website per month.
In its first full trading year ending 30th June 2019, the group posted sales of AUD 650,000.
The deal follows Keytone buying Australian product developer and manufacturer for the health and wellness sector Omniblend for AUD 22.60 million in July.
Peter James, chairman of the purchaser, said: “The acquisition offers a number of synergistic benefits, not least of which is the effective overnight implementation of a senior branded sales team to drive sales in both the Super Cubes product portfolio as well as other Omniblend branded products, including the Tonik range.”
The transaction will also allow Keytone to expand its health and wellness portfolio into international markets, namely southeast Asia and China.
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