Sean Moloughney02.09.09
Strengthening its presence in the market for probiotic dairy products, Lifeway Foods, Inc., Morton Grove, IL, has acquired its top competitor in the kefir market, Fresh Made Dairy.
Fresh Made had 2008 total sales of approximately $10 million while Lifeway Foods had about $44.5 million, a 15% increase over 2007.
"The major catalyst behind this acquisition is the growing demand for probiotic and functional dairy products," said Julie Smolyansky, CEo, Lifeway Foods. "For over 20 years, both companies have spent a large amount of time, energy and money fiercely competing against one another in the same market space. Today, with the completion of the acquisition, we couldn't be more excited about being able to shift our focus, and combine our resources to growing and expanding the whole probiotic category.”
Edward Smolyansky, Lifeway Foods' CFO said, "This acquisition couldn't have come at a better time for Lifeway. Most of our input costs are at multi-year lows, including many of our production supply costs, transportation costs, and most of our raw materials including milk. Milk prices are at multi year lows, with February, 2009 prices coming in at their lowest levels in six years. Additionally, with interest rates where they currently sit, the costs to finance a portion of the acquisition purchase price are also at all time lows. These factors should bolster Lifeway's already strong cash flows going forward, and at a time when so few companies are growing and expanding. Moreover, the last two weeks of January 2009 were back to back record weeks for shipments and sales, so we are extremely optimistic about our company's future at this time."
Fresh Made brand kefir and other products will continue to be manufactured by Fresh Made, Inc. as a wholly-owned subsidiary of Lifeway, from Fresh Made's existing 25,000-square-foot facility in Philadelphia, PA, bringing the top two kefir brands under Lifeway's control. Excluding several top executives, all Fresh Made employees will continue to be retained. Mr. Smolyansky will assume the role of president and CEO of Fresh Made.
The total purchase price of this transaction is about $14 million for all of the stock of Fresh Made. Specifically, the terms include $10 million in cash to be paid at the closing, $3 million in a note, with quarterly installment payments over two years, and $1 million of Lifeway's treasury shares, (approximately 131,500 shares). Included in the total purchase price is approximately $2 million in real estate.
Fresh Made had 2008 total sales of approximately $10 million while Lifeway Foods had about $44.5 million, a 15% increase over 2007.
"The major catalyst behind this acquisition is the growing demand for probiotic and functional dairy products," said Julie Smolyansky, CEo, Lifeway Foods. "For over 20 years, both companies have spent a large amount of time, energy and money fiercely competing against one another in the same market space. Today, with the completion of the acquisition, we couldn't be more excited about being able to shift our focus, and combine our resources to growing and expanding the whole probiotic category.”
Edward Smolyansky, Lifeway Foods' CFO said, "This acquisition couldn't have come at a better time for Lifeway. Most of our input costs are at multi-year lows, including many of our production supply costs, transportation costs, and most of our raw materials including milk. Milk prices are at multi year lows, with February, 2009 prices coming in at their lowest levels in six years. Additionally, with interest rates where they currently sit, the costs to finance a portion of the acquisition purchase price are also at all time lows. These factors should bolster Lifeway's already strong cash flows going forward, and at a time when so few companies are growing and expanding. Moreover, the last two weeks of January 2009 were back to back record weeks for shipments and sales, so we are extremely optimistic about our company's future at this time."
Fresh Made brand kefir and other products will continue to be manufactured by Fresh Made, Inc. as a wholly-owned subsidiary of Lifeway, from Fresh Made's existing 25,000-square-foot facility in Philadelphia, PA, bringing the top two kefir brands under Lifeway's control. Excluding several top executives, all Fresh Made employees will continue to be retained. Mr. Smolyansky will assume the role of president and CEO of Fresh Made.
The total purchase price of this transaction is about $14 million for all of the stock of Fresh Made. Specifically, the terms include $10 million in cash to be paid at the closing, $3 million in a note, with quarterly installment payments over two years, and $1 million of Lifeway's treasury shares, (approximately 131,500 shares). Included in the total purchase price is approximately $2 million in real estate.