Above Food announces acquisition of The Redwood Group’s specialty crop food ingredients division

REGINA and MISSION — Above Food Ingredients Inc., a food company trying to leverage its vertically integrated supply chain to deliver differentiated ingredients and consumer products, announces that it has entered into a definitive purchase agreement to acquire the Montana-based Specialty Crop Food Ingredient Division of The Redwood Group, LLC, for consideration of US$34,000,000 plus working capital, subject to final closing adjustments. Upon the terms and subject to the conditions set forth in the purchase agreement, the consideration payable by the Company in exchange for the Assets will consist of US$8,100,000 in cash and 5,600,000 newly issued common shares of Above Food, subject to final closing adjustments and customary closing conditions.

The Assets supply grains, pulses, and specialty crops to customers in countries with product categories in both the human and pet food markets. Its vertically integrated model spans from the farm to the consumer, encompassing origination, merchandising, processing, and value-added finishing. The Assets reportedly achieve structurally higher margins as a result of its value-added approach, differentiating it from commoditized food and ingredient suppliers, in alignment with Above Food’s strategy. In the fiscal year ended December 31, 2023, the Assets generated unaudited revenue of US$164 million and an average annual adjusted EBITDA for fiscal years 2021, 2022, and 2023 of US$5.3 million.

“This acquisition marks a major milestone for Above Food and strengthens our international footprint as our first U.S. physical facilities while also significantly growing our market share of the high-growth pet food category,” said Lionel Kambeitz, Founder, President, Chief Executive Officer, and Executive Chairman of Above Food. “TRG’s Specialty Crop Food Ingredient division operates in full harmony with our ‘Seed-to-Fork’ approach, providing us with top-tier processing and storage assets supported by end-to-end quality assurance, product development and safety protocols, while bringing strong relationships with growers, suppliers, and customers. It is a complete business with origination partners that are similarly utilizing sustainable farming practices that are consistent with our Canadian growers, which establishes broader reach across North America that we can leverage for the benefit of our shareholders.”

“The sale of our Specialty Crop Food Ingredient Division represents a significant milestone in The Redwood Group’s growth,” said Mike Kincaid, founder and President of TRG. “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 organization principally focused on specialty crops and value-add opportunities in the region as well as globally. Above Food is adding a well-led group of hardworking innovators, who I expect to continue flourishing and immediately improve utilization and expand the margin structure of several of Above Food’s assets. We are grateful for our team of people who helped build this business and are thankful for the Above Food team’s thoughtful approach to this acquisition.”


Source: www.canadianmanufacturing.com

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