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Gold Coast-based plant-based infant formula company Sprout Organic has secured an effective pathway to the ASX after its founder, former Gold Coast Titans player Selasi Berdie, struck a binding acquisition agreement with ASX-listed Nutritional Growth Solutions (ASX: NGS) valued at $8 million.
Under the deal, NGS will acquire 100 per cent of Sprout Organic Pty Ltd through the issue of 401.2 million shares at a deemed price of 2c per share, with Berdie, a finalist in the Gold Coast Young Entrepreneur of the Year Awards last year, set to assume the role of CEO and executive director of the combined entity upon completion.
Sprout COO Ben Chester will also become group COO of NGS after the deal is completed.
The transaction effectively delivers Berdie an ASX listing for the pediatric health and wellness business that he and his wife Jen commercially launched in 2020, building on years of prior research and development into plant-based nutrition for infants and children.
NGS has also received firm commitments to raise $2.5 million through a placement of 125 million shares at 2c per share, providing working capital for the merged group.
The company has identified about $870,000 in annualised cost savings through operational integration and corporate rationalisation.
Both the acquisition and placement are subject to shareholder approval at NGS's annual general meeting, expected in July.
"Sprout and NGS are a natural fit - premium, clean-label and clinically supported products, and a shared focus on children's nutrition," says Berdie.
"Combining Sprout's organic, plant-based infant and toddler range with NGS's Healthy Heights products creates a complementary platform that supports children across multiple stages of development, with the scale, distribution and operational capability of a larger group behind it.
"I'm honoured to lead the combined business and excited about what we can build together."
Sprout Organic's product range includes FSANZ-approved plant-based infant formula alongside organic snack bars and other health food products for children.
The company's products are sold through more than 1,000 retail outlets including Chemist Warehouse, Woolworths Online and Coles Online, with export distribution across China, New Zealand, Malaysia, the UAE and other international markets.
Sel and Jen Berdie founded Sprout Organic on the Gold Coast and brought the company's first commercial products - organic snack bars - to market in 2020.
The business has since expanded significantly, winning a World Food Innovation Award in 2022 and securing early distribution deals with major retailers including Chemist Warehouse and Drakes Supermarkets.
NGS executive director and interim CEO Manik Pujara, who will transition to a non-executive director role upon completion, describes the acquisition as "genuinely transformational".
"Sprout has built something rare - the world's first FSANZ-approved 100 per cent organic, plant-based infant formula - alongside strong retail and export distribution and attractive gross margins," says Pujara.
"Bringing it together with our clinically backed Healthy Heights range creates a paediatric nutrition platform spanning infancy through childhood, across Australian and international markets.
"I'm delighted to welcome Selasi and Ben to lead the combined group, and I look forward to supporting them as a non-executive director."
The combined entity will bring together NGS's existing pediatric nutritional supplement business with Sprout's plant-based product portfolio, positioning the group across multiple channels in the children's health and wellness category.
Pujara sas the integration will allow the merged business to strip out corporate overhead and consolidate operations, with the $870,000 in identified cost savings expected to flow through following completion.
Berdie's journey from professional rugby league to the ASX caps a multi-year push to build Sprout Organic into a nationally distributed brand.
A serial entrepreneur based on the Gold Coast, he has previously spoken about the lengthy development process behind the company's formulations, with work on the product range stretching back several years before the 2020 commercial launch.
The transaction remains conditional on NGS shareholder approval and other customary completion conditions.
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