FEI sells and markets dairy and adult nutrition brands Ripple and White H20 in Hong Kong and Singapore, both for domestic and export markets. Announcing the deal, NID said it expects the move will generate ‘strong’ revenue growth over the next 12 months.
“Nature One Dairy acquired its milk powder business and its brand, Ripple, which will be incorporated into the existing Nature One Dairy Group. The Fei Fah Medi Balm business will remain stand alone,” NOD Founder and CEO Nick Dimopoulos told DairyReporter.
A ‘key strategy’ for Asian growth
Dimopoulos explained that the deal advances NOD’s drive to expand in the key markets of Asia and nutritionals. “The acquisition is another key strategy of the NOD Group, extending our current brand positioning in Asia by launching further owned branded powder nutritional products in both adult and infant market segments,” he revealed.
“The acquisition of the Ripple Brand Milk Powder division will provide Nature One Dairy Group with an established sales and marketing footprint in Hong Kong with distribution into 380 Manning’s stores, Watsons, in addition to cross border retailers into China with a revenue of $20 million,” we were told.
By 2023, the NOD powder business alone is forecast to exceed over $40m in sales, in addition to the growth in the Sydney-based liquid nutrition business, which is expected to see revenue of more than $70m in the fiscal, the chief executive said.
The transaction has been structured as an asset purchase over a 36-month earnout period. At completion, an upfront payment of $8m is payable in NOD scrip with a further payment of $4m within six months of completion. Two further earnout payments, also to be satisfied in scrip and due over a 36-month period, have also been agreed subject to the FEI business hitting minimum annual revenue targets and an average profit target of $1m per annum.
Dimopoulos said that the business also expected to benefit from increased efficiencies and supply synergies as NOD integrated the FEI brands. “The manufacturer of the Ripple brand will now be re-directed from a third-party facility to Nature One Dairy’s milk powder facility in Victoria, bringing efficiencies rand supply synergies, with 800,000 cans which is worth a revenue of $20 million for FY23,” he said.
Commenting on the agreement, FEI owner and CEO Lawrence Gau – who will remain with the FEI business based in Hong Kong – added: “There are significant mutual benefits across the two businesses, which existing customers will benefit from by providing access to multiple products in different formats and packaging and market segments that will further create market stickiness with customers and consumers.”