Tattooed Chef Enters into Agreements to Acquire New Mexico Food Distributors, Inc. and Karsten Tortilla Factory, LLC
May 03 2021 - 8:00AM
Tattooed Chef, Inc. (Nasdaq: TTCF) (“Tattooed Chef” or the
“Company”), a leader in plant-based foods, today announced it has
entered into agreements to acquire New Mexico Food Distributors,
Inc. and Karsten Tortilla Factory, LLC (collectively referred to as
“Foods of New Mexico”) for approximately $35 million in cash. The
transactions have been unanimously approved by Tattooed Chef’s
Board of Directors. Tattooed Chef expects to close the transactions
in early May, subject to customary closing conditions.
Founded in 1987 and headquartered in Albuquerque, New Mexico,
Foods of New Mexico is a prepared food company that produces
ready-to-eat Mexican food items for both retail and food service.
Foods of New Mexico’s facility in Albuquerque currently produces
Mexican foods including quesadillas, burritos, and other handheld
items, as well as sauces. The second facility in Karsten is a brand
new facility that will enable us to have extensive tortilla
manufacturing capabilities.
“We are thrilled to announce the acquisition of Foods of New
Mexico,” said Sam Galletti, President and CEO of Tattooed Chef. “We
have seen tremendous growth in the Tattooed Chef brand and these
two facilities will allow us to diversify our product lines and
significantly increase our manufacturing capabilities to capitalize
on the $20 billion Hispanic/Southwest Food sector and beyond. We
will be immediately addressing the $1 billion Frozen Mexican Food
category once the transactions close. At full capacity, we
believe Foods of New Mexico can contribute up to $200 million
annually in revenue in the next two to three years and create
significant value for all our stakeholders.”
“Foods of New Mexico has many of the qualities we were looking
for in the next potential target: capacity, expanding product
portfolio capabilities, and entering new categories,” said Sarah
Galletti, Chief Creative Officer and the “Tattooed Chef.” “We see
an opportunity to introduce nostalgic innovation into the
plant-based food space and we believe we can leverage Foods of New
Mexico’s manufacturing capabilities to do so. We are confident in
creating new products, pushing past our existing product line and
into new spaces and we are comfortable producing food in any
category. We have a pipeline of different and innovative ideas we
can’t wait to share in the coming months such as alternative
tortillas using plant-based ingredients. We also plan to introduce
innovative meals and snacks, in both frozen and ambient. Get ready,
this is an exciting time at Tattooed Chef, and we are just getting
started.”
“Tattooed Chef has a reputation for innovation, quality, safety
and great leadership and we are excited about the future growth
prospects of the business,” said Dennis Carpenter, President of New
Mexico Food Distributors. “We trust the direction Tattooed Chef
will be taking the company and we wish them success in the
future.”
Strategic Benefits
- Diversifies Manufacturing Capabilities: The
acquisition of Foods of New Mexico allows Tattooed Chef to expand
further into the $20 billion Hispanic/Southwest Food sector and
beyond, including frozen, refrigerated, and ambient products.
Utilizing these new capabilities, the Company expects to launch
Tattooed Chef branded products in additional categories.
- Expands Production Capacity: Foods of New
Mexico’s two facilities total 118,000 square feet and provides
Tattooed Chef additional capacity to continue to innovate.
- Accelerated Expansion Outside Frozen Food:
Acquiring two existing facilities saves Tattooed Chef time and
capital to move into other categories outside frozen food including
snacks and other ambient products.
OutlookFor full year 2021, Tattooed Chef is
updating its guidance and now expects:
- Revenue in the range of $235 million to $242 million, an
increase of 58 to 63% compared to 2020. This guidance excludes any
revenue contribution from the Karsten facility which is currently
not in operation. The Company expects to update guidance when
production begins at that facility in the coming months.
- Gross margin in the range of 20% to 25%
- Adjusted EBITDA in the range of $2 million to $4 million
ABOUT TATTOOED CHEF Tattooed Chef is a leading
plant-based food company offering a broad portfolio of innovative
and sustainably sourced plant-based foods. Tattooed Chef’s
signature products include ready-to-cook bowls, zucchini spirals,
riced cauliflower, acai and smoothie bowls, and cauliflower pizza
crusts, which are available in the frozen food sections of leading
national retail food stores across the United States as well as on
Tattooed Chef’s e-commerce site. Understanding consumer lifestyle
and food trends, a commitment to innovation, and self-manufacturing
allows Tattooed Chef to continuously introduce new products.
Tattooed Chef provides approachable, great tasting and chef-created
products to the growing group of plant-based consumers as well as
the mainstream marketplace. For more information, please visit
www.tattooedchef.com.
ABOUT NEW MEXICO FOOD DISTRIBUTORS, INC.Founded
in 1987, Foods of New Mexico is a prepared food production company
that produces ready-to-eat New Mexican food items both for retail
and food service. Foods of New Mexico’s line of products continues
to provide the recipes that have been handed down through
generations of families. Foods of New Mexico products are complete
farm crop-to-package integration and nationwide distribution
network allows them to consistently deliver the highest quality
foods with the greatest reliability standards in the food
industry.
Forward Looking StatementsCertain statements
made in this release are “forward looking statements” within the
meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. When used in this
release, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,”
“seeks,” “may,” “will,” “should,” “future,” “propose,” “trend,”
“accelerate,” “expansion,” “new,” “leverage,” “continues,”
“opportunities,” “next,” “increase,” “beyond,” “potential,”
“growth,” “pipeline,” “guidance” and variations of these words or
similar expressions (or the negative versions of such words or
expressions) are intended to identify forward-looking statements.
These forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside Tattooed Chef's control, that
could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements. Important
factors, among others, that may affect actual results or outcomes
include: uncertainty surrounding the ultimate success of Tattooed
Chef’s e-commerce platform; the need to prove Tattooed Chef’s
ability to build brand awareness and continue to launch innovative
products; continued acceptance of Tattooed Chef branded products by
new retail customers; Tattooed Chef’s ability to increase in-store
count and points of distribution; the outcome of any legal
proceedings that may be instituted against Tattooed Chef;
competition and the ability of the business to grow and manage
growth profitably; the ability to meet Nasdaq’s listing
requirements; costs related to our recent business combination;
anticipated but unpredictable increased costs associated with our
transition to a public company; and other risks and uncertainties
indicated from time to time in our annual report on Form 10-K for
the year ended December 31, 2020 filed with the Securities and
Exchange Commission (the “SEC”), including those under “Risk
Factors” therein, and other factors identified in past and future
filings with the SEC, available at www.sec.gov. Some of these risks
and uncertainties may be amplified by the COVID-19 outbreak.
Tattooed Chef undertakes any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
FOR MEDIA INQUIRIES:Natania
Reedtattooedchef@praytellagency.com
FOR INVESTOR INQUIRIES: Rachel
Perkins-Ulshrachel@ulshir.com
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