- Health and Plant Protein Group (HPP) is set to snap up a 24 per cent interest in U.S.-based EVR Foods through a US$5 million (roughly A$6.4 million) investment
- HPP will invest in EVR Foods, which owns the LAVVA clean yoghurt and milk brand, alongside investment partner S2G Ventures
- The investment was initially flagged in January 2021 when HPP and S2G bought $300,000 worth of convertible notes in LAVVA
- Now, following some important due diligence, the companies have agreed to a larger investment that gives HPP and S2G a controlling 60.5 per cent interest in LAVVA
- HPP Executive Director Dennis Lin says the investment is a milestone in the company's transformation into a "plant protein-focused enterprise"
- Dennis has been appointed to the LAVVA Board of Directors and will help drive growth in the business with plans to expand into Australia and Asia
- At the same time, HPP Chairman Guy Cowan has flagged his own plans to step down from his position and allow HPP to expand its board experience
- Shares in HPP are up a slight 1.45 per cent today and trading at 35 cents per share
Health and Plant Protein Group (HPP) is set to snap up a 24 per cent interest in U.S.-based EVR Foods through a US$5 million (roughly A$6.4 million) investment.
HPP will invest in EVR Foods, which owns the LAVVA clean yoghurt and milk brand, alongside investment partner S2G Ventures.
The LAVVA investment was initially flagged in January 2021, soon after HPP rebranded from Buderim Group to reflect a renewed focus on the plant-based food business.
On January 11, HPP and S2G purchased US$300,000 (around A$389,000) worth of convertible, unsecured, promissory notes, which attracted a 7 per cent interest per year in LAVVA and matured on February 28, 2021.
As part of this initial investment, however, HPP said it would conduct some important due diligence before making a decision to take control of the LAVVA brand.
Today, the company revealed it is investing a further US$5 million (roughly A$6.4 million) into EVR alongside S2G. The full investment will take place over three investment stages and, once complete, will give HPP and S2G a combined interest of 60.5 per cent in the LAVVA brand.
The first stage of the investment plan has been completed today, under which HPP converted their US$300,000 of January 11 convertible notes and invested an extra US$1.2 million (roughly A$1.5 million).
The second investment of US$1.5 million (roughly A$1.9 million) will take place upon HPP entering a services agreement with LAVVA, and the final US$2 million (roughly A$2.6 million) investment will take place at HPP's election at a later date.
HPP Executive Director Dennis Lin said the investment into LAVVA is an important milestone in the company's transformation into a "plant protein-focused enterprise".
"Our due diligence has confirmed that co-investing with S2G Ventures is a value-add opportunity with considerable synergistic benefit to our existing macadamia business," Dennis said.
"The investment aligns closely with our core strategy, where we can apply our marketing and supply chain capability to the category in one of the largest and most dynamic markets, the U.S.A., and a provide a stepping stone to other major global markets — Asia in particular," he said.
A blooming business
HPP said since its inception, LAVVA has grown quickly and its products are now distributed through several major U.S. retail networks — including Whole Foods Market, Sprouts Farmers Market, Good Eggs, and more.
By investing in LAVVA, HPP can break into the high-growth plant-based yoghurt and milk sector by leveraging the resources of an emerging brand with an established presence in the U.S.
Moreover, Dennis Lin has today been appointed to the LAVVA Board of Directors following the first-stage investment. On top of this, HPP said it has entered several agreements with LAVVA shareholders outlining the operation of the business.
This means alongside its investment, HPP has a hand in the day-to-day business of LAVVA and can help drive growth and introduce the brand into Australia and Asia.
At the same time, HPP Chairman Guy Cowan has flagged his own intentions to step down from his position and allow HPP to expand its board experience.
The company will begin looking for a new Chairman, and Guy will hold the role until the new chair is appointed and transitioned into the business.
Shares in HPP are trading a slight 1.45 per cent higher at 11:51 am AEDT, trading at 35 cents per share.