The earn-out dispute between Maggie Beer Holdings (MBH) and Hampers & Gifts Australia (HGA) has been resolved, with MBH agreeing to pay $2 million cash to the vendors.
MBH acquired HGA for $40 million in April 2021, and part of the deal was a $10 million earnout clause, subject to HGA businesses achieving a combined $10 million EBITDA in FY23.
But in August 2023, HGA has a $12.5 million write-down from $63.3 million to $51.1 million. The then CEO, Kinda Grange, said marketplace challenges and changing consumer habits had forced the company to rethink its strategy. Two months later the earnout conditions were being disputed, with the HGA vendors rejecting MBH’s argument it didn’t need to be paid because the earnout hurdle wasn’t met.
Paris Creek Farms update
The MBH board has resolved PCF is an asset held for sale. At the end of June, the company appointed an adviser to consider all options to optimise its value. The board expects that process to be completed by the end of September.
