REGINA, SASKATCHEWAN, MISSION, CAN., and CHESTER, MONT. — Above Food Ingredients, a vertically integrated supply chain food ingredients company, announced on August 9 its plans to acquire the Specialty Crop Food Ingredient division of Redwood Group (TRG) for $34 million. The division supplies high-quality grains, pulses and specialty fruits to customers in the human and pet food industries.
TRG’s Specialty Crop Food Ingredient business operates a vertically integrated model that spans farm to fork, including manufacturing, marketing, processing and value-added refinement of ingredients. According to Above Food, this vertical integration enables the Specialty Crop Food Ingredient business to achieve higher margins and differentiates it from suppliers of standardized foods and ingredients. In addition, the business generated revenue of $164 million for the year ended December 31, 2023, and the business’ average adjusted EBITDA during 2021, 2022 and 2023 was $5.3 million.
By acquiring TRG’s Specialty Crop Food Ingredient division, Above Food will expand its presence in the North American market with a focus on pet food, as pet food represents approximately 40% of the division’s sales. The division is well positioned to capitalize on increased consumer demand for plant-based pet and human food offerings.
“This acquisition is a major milestone for Above Food and strengthens our international presence as our first physical office in the U.S., while significantly increasing our market share in the high-growth pet food category,” said Lionel Kambeitz, Founder, President, CEO and Chairman of the Board of Directors of Above Food. “TRG’s Specialty Crop Food Ingredient division works in complete harmony with our ‘Seed to Fork’ approach, providing us with world-class processing and storage resources, supported by end-to-end quality assurance, product development and safety protocols, while bringing strong relationships with growers, suppliers and customers.
“It is a comprehensive deal with source partners who use similar sustainable farming practices consistent with those of our Canadian growers. This gives us greater reach in North America that we can leverage to the benefit of our shareholders,” he added.
Above Food’s seed-to-fork approach is central to the company’s positioning, giving the company control over its entire supply chain and ensuring standards of quality, sustainability, safety and traceability, while being consistent with its commitment to regenerative agriculture.
The Specialty Crop Food Ingredient business unit is designed to advance Above Food’s direct customer relationships and enhance its value-added capabilities to drive margin optimization. The business unit is designed to provide an exclusive, diverse and long-standing supplier network that will help Above Food mitigate risks associated with local crop conditions and build a unique supply chain. In addition, it will provide Above Food with organic growth opportunities, including the potential to scale.
In addition, the Specialty Crop Food Ingredient division offers a portfolio of its own and third-party facilities under exclusive, long-term and renewable contracts. According to Above Foods, this offers the benefit of full ownership and flexibility without the burden of capital expenditure, maintenance costs and operating personnel.
“The sale of our specialty crop food ingredients division represents a significant milestone in the growth of The Redwood Group,” said Mike Kincaid, founder and president of TRG. “This is a bittersweet moment in our history, but also represents a tremendous opportunity for personal and professional growth for our teams in Mission, Kansas, and Chester, Montana, to join an organization primarily focused on specialty crops and value-added opportunities in the region and globally.”
“Above Food is gaining a well-managed group of hard-working innovators who I expect will continue to be successful and immediately improve the utilization and margin structure of several of Above Food’s assets,” he added. “We are grateful to our team that helped us build this company and are thankful for the Above Food team’s thoughtful approach to this acquisition.”
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