Whole Earth Brands, Inc. (the “Company” or “Whole Earth Brands”)
(Nasdaq: FREE), a global food company enabling healthier lifestyles
by providing access to premium plant-based sweeteners, flavor
enhancers and other foods through a diverse portfolio of trusted
brands and delicious products, today announced that it has
completed its accretive acquisition of all of the issued and
outstanding capital stock of WSO Investments, Inc. (“WSO
Investments”), the holding company for Wholesome Sweeteners
Incorporated (“Wholesome”), the #1 organic sweetener brand in North
America. The Company is also reiterating its 2020 guidance.
The acquisition of Wholesome together with the
Company’s previously announced acquisition of Swerve (a rapidly
growing manufacturer and marketer of a portfolio of zero sugar,
keto-friendly, and plant-based sweeteners and baking mixes), is
expected to double the Company’s North American market share in
only seven months since becoming a public company on June 25, 2020.
The acquisitions significantly move Whole Earth Brands’ portfolio
mix toward natural sweeteners which now represent, on a proforma
basis, approximately 85% of its North American Branded CPG
business.
Irwin D. Simon, Executive Chairman, stated, “In
a very short period of time the Whole Earth Brands team has made
tremendous progress in reshaping our North American and natural
products portfolio through organic growth and the acquisitions of
Swerve and Wholesome. Going into 2021 and beyond, we believe that
our team has significantly strengthened our business, opening new
doors for growth opportunities globally across all channels.”
Albert Manzone, Whole Earth Brands Chief
Executive Officer commented, “I’m pleased to announce the closing
of the Wholesome acquisition and welcome Nigel Willerton and his
team to the Whole Earth Brands family. The transformation of Whole
Earth Brand’s business over the past seven months has been
dramatic. We believe that we are well-positioned in key growth
categories within natural sweeteners and global markets with a
strong portfolio of brands. Looking ahead, our focus is on strong
execution of our integration strategy, while we support our
portfolio of better-for-you brands across channels with our valued
customers.”
Whole Earth Brands funded the $180 million of
purchase price payable at closing (which remains subject to certain
customary purchase price adjustments and excludes the post-closing
earn-out, if any), through a combination of a $375 million dollar
term loan and a $75 million revolver. Proforma for the transaction,
the Company estimates its Net Debt-to-Adjusted EBITDA1 leverage
ratio to be approximately 4.5x proforma 2020 adjusted EBITDA, as if
it had owned both assets on January 1, 2020. Whole Earth Brands
remains committed to reducing its leverage to its 3.0x target
through a combination of organic growth and strong free cash flow
generation.
Reiterating 2020 Guidance
The Company is reiterating its full year 2020
guidance:
- Net product revenues in the range
of $270 million to $280 million
- Adjusted EBITDA1 in the range of
$54 million to $57 million
The Company will provide 2021 guidance alongside
its fourth quarter earnings and 10-K reporting on March 16,
2021.
1Adjusted EBITDA is a non-GAAP measure.
About Whole Earth Brands
Whole Earth Brands is a global food company
enabling healthier lifestyles and providing access to premium
plant-based sweeteners, flavor enhancers and other foods through
our diverse portfolio of trusted brands and delicious products,
including Whole Earth Sweetener®, Wholesome®, Swerve®, Pure Via®,
Equal® and Canderel®. With food playing a central role in people’s
health and wellness, Whole Earth Brands’ innovative product
portfolio addresses the growing consumer demand for more dietary
options, baking ingredients and taste profiles. Our world-class
global distribution network is the largest provider of plant-based
sweeteners. We distribute our portfolio of products in more than
100 countries with a vision to expand our portfolio
to responsibly meet local preferences. We are committed to
helping people enjoy life’s everyday moments and the celebrations
that bring us together. For more information on how we "Open a
World of Goodness®,” please visit
www.WholeEarthBrands.com.
Non-GAAP Financial Measures
This press release includes certain financial
measures not presented in accordance with generally accepted
accounting principles (“GAAP”) such as Adjusted EBITDA and certain
ratios and other metrics derived therefrom. Adjusted EBITDA is net
income before interest, taxes, depreciation and amortization and
non-recurring costs and expenses. These non-GAAP financial measures
are not measures of financial performance in accordance with GAAP
and may exclude items that are significant in understanding and
assessing financial results. Therefore, these measures should not
be considered in isolation or as an alternative to net income, cash
flows from operations or other measures of profitability, liquidity
or performance under GAAP. You should be aware that the
presentation of these measures may not be comparable to
similarly-titled measures used by other companies. We believe (i)
these non-GAAP measures of financial results provide useful
information to management and investors regarding certain financial
and business trends; and (ii) the use of these non-GAAP financial
measures provides an additional tool for investors to use in
evaluating ongoing operating results and trends in and in comparing
financial measures with other similar companies, many of which
present similar non-GAAP financial measures to investors. These
non-GAAP financial measures are subject to inherent limitations as
they reflect the exercise of judgments by management about which
items of expense and income are excluded or included in determining
these non-GAAP financial measures. We have not provided a
reconciliation of projected adjusted EBITDA due to the difficulty
in estimating the components by which future net income is
estimated.
Forward-Looking Statements
This press release contains forward-looking
statements (including within the meaning of the Private Securities
Litigation Reform Act of 1995) concerning Whole Earth Brands, Inc.
(the “Company” or “Whole Earth Brands”) and other matters. These
statements may discuss goals, intentions and expectations as to
future plans, trends, events, results of operations or financial
condition, or otherwise, based on current beliefs of management, as
well as assumptions made by, and information currently available
to, management.
Forward-looking statements may be accompanied by
words such as “achieve,” “aim,” “anticipate,” “believe,” “can,”
“continue,” “could,” “drive,” “estimate,” “expect,” “forecast,”
“future,” “grow,” “improve,” “increase,” “intend,” “may,”
“outlook,” “plan,” “possible,” “potential,” “predict,” “project,”
“should,” “target,” “will,” “would,” or similar words, phrases or
expressions. Examples of forward-looking statements included in
this earnings release include, but are not limited to, our 2020
guidance and the expected benefits (financial and others) from the
Wholesome and Swerve transactions. Factors that could cause actual
results to differ materially from those in the forward-looking
statements include, but are not limited to, the Company’s ability
to integrate Wholesome and Swerve and achieve the anticipated
benefits of the transaction in a timely manner or at all; the
extent of the impact of the COVID-19 pandemic, including the
duration, spread, severity, and any recurrence of the COVID-19
pandemic, the duration and scope of related government orders and
restrictions, the impact on our employees, and the extent of the
impact of the COVID-19 pandemic on overall demand for the Company’s
products; local, regional, national, and international economic
conditions that have deteriorated as a result of the COVID-19
pandemic, including the risks of a global recession or a recession
in one or more of the Company’s key markets, and the impact they
may have on the Company and its customers and management’s
assessment of that impact; the impact of the COVID-19 pandemic on
the Company’s suppliers, including disruptions and inefficiencies
in the supply chain; competition and consolidation in the Company’s
industry; the Company’s ability to manage costs; the Company’s
ability to sustain rapid growth and launch new products; changes in
consumer preferences; the Company’s ability to successfully
implement its growth strategies on a timely basis, or at all; the
Company’s reliance on exclusive distributors in certain
jurisdictions; extensive and evolving government regulations that
impact the way the Company operates; the Company’s dependence on
sales to the worldwide tobacco industry; and other risks and
uncertainties described in the documents the Company files (or
furnishes) with the U.S. Securities and Exchange Commission from
time to time.
These forward-looking statements are subject to
risks, uncertainties and other factors, many of which are outside
of the Company’s control, which could cause actual results to
differ materially from the results contemplated by the
forward-looking statements. These statements are subject to the
risks and uncertainties indicated from time to time in the
documents the Company files (or furnishes) with the U.S. Securities
and Exchange Commission.
You are cautioned not to place undue reliance
upon any forward-looking statements, which are based only on
information currently available to the Company and speak only as of
the date made. The Company undertakes no commitment to publicly
update or revise the forward-looking statements, whether written or
oral that may be made from time to time, whether as a result of new
information, future events or otherwise, except as required by
law.
Contacts:
Investor Relations Contact:Whole Earth
Brands312-840-5001investor@wholeearthbrands.com
ICRJeff
Sonnek646-277-1263jeff.sonnek@icrinc.com
Media Relations Contact:
Wyecomm Penny
Kozakos202-390-4409Penny.Kozakos@wyecomm.com
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