MamaMancini's Acquires Remaining Interest in Chef Inspirational Foods
Acquisition Expected to be Accretive and Drive Immediate Gross Margin and Operating Expense Synergies
$3.65 Million Purchase Price Composed of $2.15 Million of Cash in Two Tranches and $1.50 Million of Common Stock Payable in June 2025
EAST RUTHERFORD, NJ, June 29, 2023 (GLOBE NEWSWIRE) -- MamaMancini's Holdings, Inc. (NASDAQ:MMMB), a leading national marketer and manufacturer of fresh Deli prepared foods, today announced that it has purchased the remaining 76% interest in Chef Inspirational Foods, Inc. ("CIF"), a deli prepared food sales agent, following up on the June 2022 acquisition of a 24% minority interest in CIF.
The remaining 76% interest in CIF was purchased for $3.65 million at an implied enterprise value of $4.8 million. $2.15 million of the purchase price is payable in cash in two tranches, one due immediately at closing and the second in June 2024. The $1.5 million common stock component is payable in June 2025, based on the market price of MamaMancini's common stock at that time.
Adam L. Michaels, Chairman and CEO of MamaMancini's, said: "I am pleased to follow through on my predecessor's acquisition of a minority interest in CIF, exercising our option to acquire the remaining portion on more favorable terms leveraging our cash on hand. While I don't anticipate a significant sales impact in the immediate-term given our T&L subsidiary was CIF's largest co-manufacturer, I am confident that this acquisition could immediately enhance our company-level gross margins by 1-2%, further building upon our near-term goal of a high-20% gross margin profile. In addition to the sales expertise of CIF and exciting new cross-selling opportunities, I expect to realize meaningful overhead synergies that will reduce operating expenses and provide us with additional freight capabilities.
"We are proud to have secured a purchase price that aligns the seller's incentives with those of our shareholders, revising the stock component from less than 10% of the purchase price to over 40% of the purchase price, based on the market value of our stock in June of 2025 – providing ample runway to execute and enhance shareholder value in the interim. With this transaction complete, we can now focus on optimizing the operations of our combined company, building out our sales organization and seeking out my first acquisition as CEO of MamaMancini's. I look forward to continued momentum in the months ahead as we strive to create sustainable value for my fellow shareholders over the long-term," concluded Michaels.
About MamaMancini's Holdings, Inc.
MamaMancini's Holdings, Inc. (NASDAQ:MMMB) is a leading marketer and manufacturer of prepared foods with over 45,000 product placements in grocery, mass, club and convenience stores nationally. The Company's broad product portfolio, born from a rich history in Italian foods, now consists of a variety of high quality, fresh, clean and easy to prepare foods to address the needs of both our consumers and retailers. Our vision is to become a one-stop-shop deli solutions platform, leveraging vertical integration and a diverse family of brands to offer a wide array of prepared foods to meet the changing demands of the modern consumer. For more information, please visit www.mamamancinis.com.
Forward-Looking Statements
This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may," "future," "plan" or "planned," "will," "could" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the following: the CIF transaction may involve unexpected costs or liabilities; we may be unable to achieve expected synergies and operating efficiencies from the transaction within the expected time frames or at all; we may be unable to successfully integrate CIF's operations into our own, or such integration may be more difficult, time consuming or costly than expected; the other risks identified in the Company's 10-K for the fiscal year ended January 31, 2023 and other filings made by the Company with the Securities and Exchange Commission.
Investor Relations Contact:
Lucas A. Zimmerman
Director
MZ Group - MZ North America
(949) 259-4987
[email protected]
www.mzgroup.us
