MamaMancini's Signs LOI to Acquire Manufacturing Operations
August 22 2017 - 09:08AM
Marketwired
MamaMancini's Signs LOI to Acquire Manufacturing Operations
Proposed transaction is expected to be immediately accretive and
increase EBITDA by $1.5 to $2.0 million in first year
EAST RUTHERFORD, NJ-(Marketwired - Aug 22, 2017) - MamaMancini's
Holdings, Inc. (the "Company" or "MamaMancini's") (OTCQB: MMMB), a
marketer of specialty pre-prepared, frozen and refrigerated all
natural food products (as defined by the United States Department
of Agriculture), today announced that it had signed a Letter of
Intent ("LOI") to acquire Joseph Epstein Food Enterprises, Inc.
("JEFE"), a manufacturer of food products, which has been the sole
manufacturer of the Company's products since inception. Under the
agreed terms, no cash would be exchanged between the parties. JEFE
is presently owned by the Chief Executive Officer and President of
the Company, who in the aggregate owns approximately 44% of the
Company's common stock.
The transaction had been under consideration by the Company's
independent Strategic Alternatives Committee of its Board for more
than a year. The Company believes that the transaction on a
pro-forma basis reduces Cost of Goods Sold and is accretive to the
Company both in terms of Earnings Before Interest, Taxes,
Depreciation and Amortization ("EBITDA"), (a non-GAAP financial
measure) and Net Profit in the range of $1.5 to $2.0 million over
the next twelve (12) months.
The transaction locks-in increasing profits consistent with the
company's growth plans, provides the Company with control over the
manufacturing of its primary products, simplifies organizational
processes and eliminates related-party transactions which
historically have contributed to investor confusion.
Under the terms of the Letter of Intent, the transaction would
be completed on a non-dilutive basis without any cash or stock
passing to the shareholders of JEFE. The principal consideration
for the transaction would be the cancellation of approximately $2
million of inter-company debt and the assumption of approximately
$2.7 million of accrued expenses accounts payable and outstanding
debt.
In considering the transaction, the Strategic Alternatives
Committee had obtained an independent professional outside
appraisal of JEFE on both a freestanding and combined basis. On a
conservative basis, the Committee concluded that the value of JEFE
significantly exceeded the consideration the Company would pay
pursuant to the terms of the proposed transaction. While the
transaction will increase Company debt and reduce net worth in the
short term, the Committee and the Board of Directors believed that
the benefits of this transaction significantly outweighed these
considerations and would bring meaningful value accretion to the
Company and its shareholders.
The Company intends to complete this transaction by November 1,
2017 and it is subject to the completion of due diligence
(including the receipt of JEFE audited financial statements for a
two-year period) and drafting and execution of a definitive merger
agreement and related transaction documents.
About MamaMancini's MamaMancini's is a marketer and distributor
of a line of beef meatballs and turkey meatballs all with sauce,
five cheese stuffed beef and turkey meatballs all with sauce,
original beef and turkey meatloaves, chicken parmesan, stuffed
peppers and other similar Italian cuisine products. The Company's
sales have been growing on a consistent basis as the Company
expands its distribution channel, which includes major retailers
and distributors such as Costco, Publix, Shop Rite, Jewel, Save
Mart, Lucky's, Lunds and Byerlys, SuperValu, Safeway, Albertsons,
SpartanNash, Bashas, Whole Foods Market, Hy-Vee, Shaw's, Kings,
Roche Bros., Key Foods, Stop & Shop, Giant, Giant Eagle,
Foodtown, Randalls, Krogers, Shoppers,, King Kullen, Lowes, Central
Market, Weis Markets, Ingles, Food City, The Fresh Market. Sysco,
Burris Foods, C&S, and Driscoll Foods. The Company sells a
variety of its products on air and on line on QVC, the worlds
largest direct to consumer marketer.
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" 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 risks that actual results may differ materially from those
projected in the forward-looking statements as a result of various
factors, and other risks identified in the Company's 10-K for the
fiscal year ended January 31, 2016 and other filings made by the
Company with the Securities and Exchange Commission.
Contact Information
Contact: Carl Wolf Chairman and CEO MamaMancini's Holdings, Inc.
Stock Symbol: MMMB 973-985-0280 www.mamamancinis.com
carl@mamamancinis.com