Laird Superfood expects “nice distribution gains” from its acquisition of US organic food-and-drinks business Navitas, the company’s CEO has said.
Just before Christmas, Laird Superfood struck a deal to buy California-based Navitas, which sells a range of organic products including acai powder, hemp seeds and powdered lattes.
Laird Superfood completed the $38.5m acquisition earlier this month and, speaking to analysts on Thursday (26 March), CEO Jason Vieth outlined how the deal could boost sales.
“There’s a significant amount of crossover when you consider retailers similar to Laird Superfood. They are predominantly natural channel [the] largest accounts being Whole Foods and Sprouts, so very similar to the Laird Superfood portfolio,” Vieth said.
“It’s a great portfolio of products. They compete in different categories but a very similar temperature state: shelf-stable pouch products that are very, very much like what you see with Laird Superfood.
There’s not really a consolidation of items that makes sense. This is actually an expansion of items as we consider both brands but there is quite a lot of overlap and we’re working through that now with the combined sales organisation, which will really allow us to go to market in a more impactful way.”
Vieth added: “Now we can go in with two exceptional brands and really play a much more important role to those retailers as well.
We’re really excited about the assortment opportunities that this creates being able to leverage one brand for the next brand. We expect to see some really nice distribution gains in years ahead.”
Alongside deal for Navitas, Laird Superfood also announced investment from private-equity firm Nexus Capital Management, backing that funded the acquisition.
Under the terms of their agreement, Nexus agreed to buy an initial tranche of 50,000 shares in Laird Superfood at a purchase price of $1,000 per share. Laird Superfood has the option, for up to one year following the deal, to require Nexus to purchase, upon the same terms, up to an additional 60,000 shares of its Series A preferred stock, the proceeds of which “must be used for strategic transactions”, the statement issued on 22 December read.
The private-equity firm now owns more than half the publicly-listed Laird Superfood but Vieth explained why the investment – with the potential of more to come – would support the company’s ambitions.
He told analysts on Thursday the possible additional proceeds from Nexus “are earmarked for an acquisition or other growth initiatives with any remainder available for general corporate purposes”.
