MIAMI - Smart for Life, Inc. (NASDAQ:SMFL), a company in the Health & Wellness sector, is currently in negotiations to acquire four profitable companies, expanding its acquisition pipeline as part of its post-restructuring phase. The potential acquisitions include a previously announced target, Purely Optimal Nutrition, and three others: a liquid manufacturer with $12 million in sales, an established supplement brand with $10 million in annual sales, and a wholesale manufacturer and distributor with $8 million in revenue.
A.J. Cervantes, Jr., Chairman of Smart for Life, has indicated that the company is resuming its M&A activities, which were paused during restructuring, with the intention to accelerate post the filing of its financial reports. The company's CEO, Darren Minton, expressed that while there are no guarantees of completion, these acquisitions could significantly contribute to the company's growth objectives.
Smart for Life's strategy includes seeking profitable companies within the nutraceutical industry, with a focus on innovation and quality, targeting those with annual revenues between $5 million and $25 million. The company is not only looking domestically but also considering foreign acquisitions.
The completion of any acquisition is contingent on successful due diligence and financing. Smart for Life aims to reach a publicly stated goal of $100 million in revenue through organic growth and M&A initiatives.
This news comes following Smart for Life's restructuring plan, which included recapitalization through equity and debt financings, the sale of non-performing assets, and the liquidation of the company's senior debt facility. In addition, the company converted substantial debt obligations into equity, improving its balance sheet.
The company cautions that this press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations. The information is based on management's beliefs, assumptions, and expectations of Smart for Life's future economic performance.
This article is based on a press release statement from Smart for Life, Inc.
In other recent news, Smart for Life, Inc. has made several strategic changes in its corporate structure. The nutraceutical company has appointed Jessica Walters as the new Chief Marketing Officer (CMO). Walters, with her extensive experience in digital marketing, is expected to enhance the company's sales capabilities using its intellectual property and marketing platforms.
In addition to Walters' appointment, Smart for Life has also made changes to its advisory board and Board of Directors. David Trosin, bringing two decades of industry experience, has been appointed to the advisory board, while Heather Granato, a veteran in content creation and marketing, has joined the company's Board of Directors.
These recent developments are part of Smart for Life's growth strategy, which includes a series of planned acquisitions. The company's pending acquisition of Purely Optimal Nutrition is anticipated to contribute to its revenue and EBITDA. Furthermore, Smart for Life has recently implemented a restructuring plan involving recapitalization and asset sales, marking a period of significant activity focusing on expansion and brand development.
InvestingPro Insights
As Smart for Life, Inc. (NASDAQ:SMFL) embarks on a strategic path to grow through acquisitions, it's essential to consider the financial health of the company. InvestingPro data reveals that the company has a market capitalization of $0.25 million, which is relatively small, indicating a potential high-risk investment. The Price / Book ratio as of the last twelve months ending Q3 2023 stands at 0.27, which suggests that the stock may be undervalued relative to its assets. Moreover, Smart for Life has experienced a significant decline in revenue, with a 39.39% decrease over the last twelve months as of Q3 2023.
Two InvestingPro Tips for SMFL that could be particularly relevant to investors considering the company's M&A ambitions are:
- The company operates with a significant debt burden, which could impact its ability to finance acquisitions and invest in growth.
- Smart for Life's stock has taken a big hit over the last week, month, and six months, with price total returns of -7.62%, -51.26%, and -82.55% respectively, which could affect investor confidence during a critical period of expansion.
These insights, along with 15 additional InvestingPro Tips available at InvestingPro, can help investors make a more informed decision about the company's prospects and the potential impact of its acquisition strategy on its financial stability.
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