Australian healthy nutrition business Forbidden Foods is set to acquire domestic alt-milk producer Oat Milk Goodness (OMG).
Forbidden Foods will snap up the oat-milk business for A$3.5m (US$2.3m) as it “plans to leverage its established Australian distribution footprint and relationships with major retail groups”, according to a statement.
Plant-based OMG, co-founded by Australian cricketer Steve Smith along with Tony Adams and Daniel Rootes in 2019, generates annualised revenues of A$1.2m, Forbidden Foods said in an ASX filing yesterday (14 August).
Forbidden Foods CEO Alex Aleksic said: “We are pleased to confirm this strategic acquisition with a company of OMG’s calibre. The proposed transaction represents a unique opportunity to leverage the respective strengths of both companies and create an integrated multi-channel, health-focused products business serving domestic and international markets.
“Strategically, the Forbidden Foods board and management team holds the view that OMG’s product suite specifically complements Forbidden Foods’ core range of Blue Dinosaur healthy snack foods, by adding a leading health-drink range in a fast-growing market.”
Aleksic was appointed CEO of Forbidden Foods last year when co-founder Marcus Brown was relocated to the North American division of the company to work with the Blue Dinosaur brand, which was acquired in 2021.
He added: “More broadly, this transaction marks the company’s maiden step in transitioning to a brand manager in the ‘better for you’ segment of the FMCG sector to further capitalise on the consumer shift towards healthy choices.
“The company is currently assessing a number of other value accretive opportunities and will provide further updates over the coming months.”
OMG’s product range includes flavoured milks, as well as the staple oat milk drink. It has listings in Woolworths and Ampol Foodary outlets in Australia, as well as a clutch of independent and health food stores.
The ASX filing said OMG is “actively pursuing international expansion” with a particular focus on India at first.
Smith added: “We are excited to have entered into this SPA with Forbidden Foods and are confident that it will provide a springboard for OMG’s future growth. While there are a number of synergies between the businesses, OMG has the potential to benefit from the agreement through access to capital markets and international expansion opportunities.”
Forbidden Foods posted a net loss before tax of A$1.1m in the first half of its 2024 financial year, a 104% improvement on the previous corresponding period and the best earnings performance by the company since it listed on the ASX in September 2020.
