As the Australian public continues trending towards health-conscious eating, dairy producer Keytone Dairy (ASX: KTD) is expanding into the segment via the acquisition of lifestyle health and wellness brand Super Cubes.
The purchase price of $263k cash, $463k debt settlement and issue of performance-based shares will provide Keytone with Super Cubes’ products as well as distribution to the Woolworths national network, more than 400 independent grocers and the Super Cubes website which logs more than 15,000 visitors per month.
In FY19, their first 12 months of trading, Super Cubes secured $650,000 in sales of their frozen cubes of fruit and vegetables, plant-based protein and smoothie nutrient enhancers.
“Super Cubes is an exceptionally attractive acquisition for Keytone. The brand is a fast growing, highly appealing range of products for the health conscious, time-poor, consumer,” said Keytone CEO, Danny Rotman.
“The acquisition fast tracks the strategic priority and development of the Omniblend branded product portfolio through the on-boarding of the Super Cubes executive team, matching their skills and depth of experience in brand development and sales, with Omniblend’s leading in-house product development expertise.”
“Further, Keytone will be able to leverage its existing distribution channels in core markets, including China, to grow the Super Cubes brand internationally executing on the early-mover advantage in the health and wellness sector globally.”
Already with an established sales pipeline to China through their production of dairy products, including milk formula, the strategic acquisitions will significantly increase Keytone’s product range which are complementary to those being added by Super Cubes.
The announcement comes just days after leading Australian dairy product manufacturer Bellamy’s received a $1.5 billion takeover bid from China Mengniu Dairy Company at a 59% premium. In order to supply China’s growing demand for Australian dairy products.
Keytone Dairy’s acquisition of Super Cubes will be funded solely from current cash reserves.