Key Takeaways:
- Edible Garden has signed a non-binding LOI to acquire Narayan d.o.o. and its subsidiaries.
- Narayan Group reported $22M revenue in the first nine months of 2024 and projects annual revenue of $31.5M for the year.
- The combined entity expects revenues exceeding $60M in 2025.
- The transaction aims to leverage Narayan’s European market leadership and Edible Garden’s North American distribution network.
- Key leadership changes and closing conditions are outlined in the LOI.
What Is the Nature of the Proposed Acquisition?
Edible Garden AG Incorporated (Profile) has entered into a non-binding letter of intent (LOI) to acquire Narayan d.o.o. (Narayan Group), a Slovenian producer of organic coconut and superfood products. The acquisition aims to combine Narayan’s European market strength with Edible Garden’s North American distribution channels.
Under the LOI, the company will issue shares of its common stock to Narayan shareholders in exchange for 100% of Narayan’s share capital. A majority of Edible Garden’s board of directors will be designated by Narayan shareholders, while Jim Kras will remain Chairman and CEO of Edible Garden.
What Are the Financial Highlights of Narayan Group?
Narayan Group has demonstrated consistent revenue growth, with:
- 2020 Revenue: $12.1M.
- 2023 Revenue: $26.9M, net income of $0.9M, and EBITDA of $3.0M.
- 2024 Projections: $31.5M in annual revenue, including $9.5M expected in Q4.
With a vertically integrated supply chain, Narayan Group has established a strong market presence in Europe, delivering healthy gross margins.
How Will This Transaction Impact Operations?
The acquisition aims to accelerate market expansion by leveraging the combined strengths of both companies:
- Market Expansion: Narayan’s European leadership and Edible Garden’s North American network will enable cross-selling opportunities across both regions.
- Increased Revenue: The combined entity projects revenues exceeding $60M in 2025.
- Operational Efficiencies: Shared strategies will focus on scalability, supply chain optimization, and expanded product lines.
Mario Brumat, CEO of Narayan Group, said, “This strategic transaction with Edible Garden represents a transformative opportunity… Together, we expect to accelerate market expansion, particularly in the U.S. and Canada.”
What Are the Proposed Leadership and Governance Changes?
- Leadership Continuity: Jim Kras will continue as Chairman and CEO of Edible Garden, while Mario Brumat will lead European operations and join Edible Garden’s board.
- Board Structure: A majority of the board members will be designated by Narayan shareholders, subject to Nasdaq requirements.
What Are the Conditions for Closing the Transaction?
The transaction is subject to several closing conditions, including:
- Due Diligence: Completion of investigations by both parties.
- Equity Financing: €6.0M equity financing for Narayan.
- Reverse Stock Split: Execution of a reverse stock split for Edible Garden.
- Equity Incentive Plan: Establishment of a 2025 Equity Incentive Plan.
- Stockholder Approval: Edible Garden stockholders must approve the transaction.
What Does This Mean for Shareholders and the Market?
Jim Kras, CEO of Edible Garden, highlighted the acquisition’s potential: “This value acquisition should position us to create meaningful value for our shareholders by meeting the growing demand for sustainable, plant-based food products. We believe this transaction will provide us with immediate value, allow us to introduce Narayan’s products into the North American market, and provide a much stronger base to grow in the future.”
With the acquisition, Edible Garden and Narayan Group aim to establish a stronger foothold in the global market for organic and sustainable products, delivering scalable growth and increased market share.
