Finland-based functional food and beverage business Func Food Group is to be acquired by Celsius Holdings, the US company behind the Celsius fitness drink brand, in a US$24.6m deal.
Helsinki-headquartered Func Food has had Finland-based private-equity house Sentica Partners as its majority shareholder since 2014.
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The company markets and distributes well-being products such as beverages, protein bars, supplements and superfoods under the brands Fast Sports Nutrition, CocoVi and FitFarm. It has a subsidiary in Sweden.
Func Food has been the distributor of the Celsius drinks brand in the Nordic countries since its acquisition of distributor People’s Choice in 2016.
John Fieldly, president and CEO of Florida-based Celsius, said: “The acquisition of Func Food is an important next step in our strategy to build a globally dominate brand and solidifies our position in the Nordics while opening a new distribution platform for the rest of Europe.
“At the same time, this transaction provides us with the ability to bring an entirely new, yet complementary product offering to consumers; Func Food’s innovative Fast business. The acquisition, valued significantly below our revenue multiple, approximately 1x incremental revenue, provides immediate accretion to our shareholders and incremental opportunities to expand our European footprint.”
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By GlobalDataNasdaq-listed Celsius is to pay $15.1m in cash for Func Food Group, with the remainder of the $24.6m transaction including the assumption of $9.5m of debt. The US group intends to finance the acquisition with proceeds from a follow-on equity public offering of $25m.
In 2018, Func Food Group generated revenues of EUR33m (US$36.4m), down from EUR40.1m a year earlier, with the company citing increased competition in Finland. Func Food Group made an annual loss at an EBITDA level of EUR3m, against an EBITDA profit of EUR3.2m in 2017
Func Food Group CEO Robin Lybeck said: “The acquisition of Func Food by Celsius is a very welcome development to our solid long-term partnership. Func Food has built Celsius to become a leading fitness beverage in the Nordic markets, with exceptionally high per capita consumption in Sweden and we are looking forward to expanding the footprint of this great brand as we move ahead.”
The transaction is expected to close in October.
