Innovative Food Holdings acquires Organic Food Brokers
by Eric Schroeder
BONITA SPRINGS, Fla. — Innovative Food Holdings Inc., a provider of specialty foods, gourmet specialty meals, gluten-free foods and direct-from-source artisanal foods, has acquired Organic Food Brokers LLC (OFB), a Boulder, Colo.-based company focused on launching and growing retail sales for small and emerging organic and specialty food brands nationwide.
The acquisition purchase price includes cash consideration of $100,000, a performance-based earn out of up to $225,000, seller financing in the form of a $200,000 note, convertible at $1.54 per share and options to purchase 100,000 shares of Innovative Food Holdings at $1.46 per share.
With the acquisition, Innovative Food Holdings said it has launched a retail channel offering for new and emerging food brands.
“Innovative Food Holdings continues to pursue opportunities to leverage our unique position in the specialty food space to grow synergistic opportunities and to enter into new complimentary specialty food markets, utilizing a low capex model,” said Sam Klepfish, chief executive officer of Innovative Food Holdings. “We are excited about the opening of this new and potentially promising market area for Innovative Food Holdings, and we look forward to being able to take advantage of the numerous growth opportunities and synergies available in the retail space.”
OFB generates revenue through monthly recurring revenues as well as through earning a percentage of future sales of client company products. The company generated approximately $550,000 of unaudited revenues in 2013 and is expected to be immediately accretive to earnings, Innovative Food Holdings said. OFB will operate as a wholly owned subsidiary of Innovative Food Holdings.
OFB works with emerging food brands to develop and execute sales, marketing and distribution plans via its nationwide network of retail-related food broker relationships while providing emerging food brands distribution and shelf placement access in all of the major metro markets in the food retail industry.
Innovative Food Holdings said it plans to leverage synergies related to its specialty and artisanal food capabilities to further accelerate the growth and conversion rate of OFB’s pipeline. Expected synergies include the ability to offer nationwide food service distribution opportunities for new and select existing and potential OFB clients with retail products, which potentially may crossover in the food service space. In addition, foodservice-oriented offerings within the company’s core foodservice markets will have the potential to cross over to retail shelves, Innovative Food Holdings said.
“We have been seeing continued convergence between retail and foodservice products in the rapidly changing specialty food distribution market,” said Justin Wiernasz, president of Innovative Food Holdings. “We are particularly enthusiastic about this acquisition as we believe it uniquely positions Innovative Food Holdings to offer unique, highly synergistic capabilities and relationships in both the rapidly growing specialty foodservice and specialty food retail area.”