Australian online health and wellness business The Healthy Mummy Holdings has been acquired by ASX listed Halo Food Co for $17 million.
Founded by Rhian Allen in 2010, THM had a recorded revenue of roughly $21 million and a normalised EBITDA of $4 million. The business targets mothers of young children wanting to lose weight and has built one of the world’s largest communities for them. It has almost two million Facebook followers, 600,000+ Facebook private group members, and 235,000+ Instagram followers.
THM’s digital subscriptions offer a nutritionist, personal trainer, motivational coach, which have 100 per cent gross margins and 39 per cent revenue.
It’s food and products include smoothies, snacks, supplements, skincare, books, merchandise, which are all sold online and via Priceline with a 48% gross margin and 61% revenue.
The THM website has around 86,000 subscribers and more than 730,000 unique visitors a month. It has achieved a 4x customer acquisition cost to lifetime ratio.
For Halo CEO Danny Rotman, the rationale for the deal is THM’s position as a leading player in the lucrative sector of women focussed on weight loss, health, and wellbeing. In this instance, women with young children.
THM is established, profitable and a cash generating business, and it has a different product and service offering, with substantial cross-selling opportunities for each company's proprietary brands, Halo said.
The manufacturing synergies would see around $4-5 million per annum of THM products being brought inhouse to Halo manufacturing facilities in Melbourne and Sydney.
Halo said THM has higher margin proprietary brand sales which will transform Halo's sales mix and increase gross profit.
Halo Food Co. was born from a rebrand of Keytone Dairy in November 2021, when it announced a $54.3 million distribution deal with Theland new Cloud Digimart $54.3 million
Halo has two private label contracts with Coles delivering multiple SKUs with different pack formats, flavours, and sizes.
It recorded a 14 per cent increase in sales to $27.8 million in 1H FY22 on prior corresponding period, with Rotman saying the company had experienced fast progress over the six-month period.
Halo has a market cap of $26.27m. It primarily manufactures UHT milk and dairy powders, protein bars and wellness-based product capabilities.
Under the terms of the SPP, all eligible shareholders will be entitled to subscribe for up to $30,000 of Halo shares to raise up to $3 million.
The acquisition will be funded by an equity raise of a $3.5 million placement, a share purchase plan to raise up to an additional $3 million, and a ~$13 million new debt facility replacing Halo's existing Australian ones.
The deal sees THM acquired for $17 million plus an earn-out subject to performance milestones.
