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More than a month after falling into voluntary administration, formerly ASX-listed health food manufacturer Halo Food Co has sold its Sydney operations to Gold Coast-based Body Science and its Swedish parent company Humble Group for an undisclosed sum.
Under the agreement, the acquirer will take control of Halo’s Bar Line production in the south-western suburb of Prestons in Sydney, where the company had set up manufacturing for its protein bars and fudge.
The buyout comes almost two months after Halo Food sold dietary program The Healthy Mummy to men’s healthcare platform Mosh for $588,540 – representing only a fraction of the $17 million it agreed to fork out for the brand through a mix of cash and scrip early last year.
According to Body Science, the recent purchase will ensure that Halo Food Co staff will be able to retain their roles.
“Integrating manufacturing capabilities into our group in Australia is an exciting development and opens up further opportunities for support and growth of our brand and other Humble Group brands in our region,” Body Science founder and CEO Sheree Young said.
“Humble Group already have extensive manufacturing operations for fast-moving consumer goods (FMCG) throughout Europe and the investment in Australia is a testament to the opportunity here and support for ongoing Australian manufacturing for BSc products.
“I am also thrilled that the acquisition by our group ensures ongoing employment for the staff affected by the recent events in Halo group.”
Formerly known as Keytone Dairy Corporation, Halo Food Co was founded in 2011 and owns brands like handcrafted fudge company Gran’s, premium milk powder brand KeyDairy and sports nutrition brand Tonik. The company’s products have been sold in supermarkets and retail stores in Australia and New Zealand and exported overseas to China, Hong Kong, Taiwan, Vietnam and the Middle East.
In its annual report to shareholders two months ago, the group announced a loss of $50 million. At the time, the board assessed the company as “a going concern” due to a number of factors, including liquidity challenges, capital expenditure, and the company’s ability to execute the sale of assets within a reasonable timeframe.
Halo impaired the acquisition of The Healthy Mummy by $11.3 million at the end of FY23, citing softer e-commerce and digital sales as the reason why it would undertake a strategic review.
The Healthy Mummy recorded a revenue of $13.9 million for FY23 – a 31 per cent decrease year-on-year that was pinned on macroeconomic headwinds and tighter consumer discretionary spending.
However, the group realised a record revenue of $82.1 million - growing from $59.9 million in FY22, while EBITDA declined from $2.3 million to $700,000. The drop was driven by underperformance in New Zealand contract manufacturing, The Healthy Mummy and the group’s Bar Line.
Halo Food Co collapsed on 24 August, when KPMG Australia’s David Hardy, Ryan Eagle and Emily Seeckts were appointed receivers and managers.
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