Above Food Corp. is set to buy plant-based foods supplier Atlantic Natural Foods as part of the Canadian group’s IPO.
The Canada-based business is lining up the acquisition of the Loma Linda and Tuno brands owner through its IPO, which is scheduled to be completed in the second half of the year.
Above Food, a plant-based ingredients and CPG company, is set to go public via a SPAC transaction.
The company is to combine with Bite Acquisition Corp., a special purpose acquisition company, or SPAC, listed in New York.
The boards of Above Food and Bite Acquisition Corp. have approved the SPAC deal, which is expected to be finalised in the back half of 2023.
Above Food does business in three areas: agriculture, ingredients and consumer packaged goods.
The company is set to boost its presence in the latter field with the purchase of the assets of Atlantic Natural Foods, a company in which it had been a minority investor since 2021.
Atlantic Natural Foods (ANF), controlled by AFT Holdings, will move into new ownership as part of the IPO.
“In 2021, Above Foods acquired a minority interest, increased it in 2022; today they (AF) retain a minority interest,” AFT Holdings CEO Douglas Hines said. “Agreement was finalised that ANF will roll the balance of their shares into the IPO and AF will have the controlling shares.”
In the 12 months to 31 January this year, agriculture accounted for 61% of Above Food’s $294m in revenues, followed by ingredients at 37% and CPG at 2%. In the current financial year, Above Food is forecasting the divisions will generate 40%, 52% and 8% of revenues respectively, leading to group revenues of $482m.
In an investor presentation on the SPAC deal, Above Food noted that the CPG forecast revenues “includes Atlantic Natural Foods revenue”.
AFT Holdings will become a shareholder in the listed Above Food, Hines said.
“This was exciting as I saw the best opportunity to create a true plant based solution with a secure supply source, but more important the Above Food leadership of Mr. Kambeitz, Mr. Williams and the team along with the structure created will deliver growth, innovation, and a solid commitment to the world that we will continue to focus on critical sustainability while delivering healthy food at a value,” Hines said.
“In today’s environment, you have to control your supply chain as well as have critical access to capital. This is evident by the massive exits in these small to medium-sized businesses and larger ones as well. This ensures a long-term viable opportunity going into the next generation. AFT needed to find this partner for this business and the AF structure delivers this unique opportunity.”
Existing Above Food shareholders, including management, will roll over all their equity into the newly-listed business. They will own around 70% of the public company on a pro-forma basis.
Lionel Kambeitz, Above Food’s chair, president and CEO, will continue to lead the company, which owns brands including Culcherd plant-based dairy.
Kambeitz, who co-founded the business, said: “We started Above Food with the intent to drive positive change across the entire food chain. More recently, as food insecurity escalates and the global food supply chain becomes more fragile and subject to disruption, we believe Above Food is well-positioned to ensure communities and consumers around the globe have access to nutritious ingredients that are grown and harvested according to sustainable farming methods.
“While our business spans regenerative agriculture, ingredients manufacturing, and consumer products – we believe the way in which we bring these businesses together makes Above Food a novel and differentiated solution to help tackle these growing global issues.”
The new business has attracted investment from private-equity firm Lexington Capital and Mexico-based oat products business Grupo Vida.
The planned listing values Above Food at a pro forma enterprise value of around $319m, the company said. Once the transaction is finalised, it is expected to provide around $44m of “gross proceeds to fund future facility development and working capital”, it added. Around $34m of those proceeds will “go towards executing Above Food’s business plan and roll-up strategy”, the investor presentation noted.
Alberto Ardura, the chair and CEO of Bite Acquisition Corp., said: “Our goal was to partner with an industry-leading, differentiated food company with strong fundamentals. We believe Above Food will be a first-of-its-kind public company within the food-based specialty ingredients sector – utilising a vertically integrated business model that leverages its own source of supply and distribution infrastructure to create higher value formulations and products for the benefit of downstream customers in the ingredients and CPG space.”
