Whole Earth Brands (FREE) Signs Definitive Agreement to be Acquired by Affiliates of Sababa Holdings FREE, LLC
Key Summary: On Jan 3, 2024, they urged an immediate sale due to poor performance, high debt ($411M), and missed forecasts at Whole Earth. On Feb 13, 2024, the company entered into a definitive agreement to be acquired by an affiliate of Sababa Holdings FREE, LLC for $4.875 per share.Market Cap: $203 million | Whole Earth Brands, Inc. operates as a food company worldwide. It operates through two segments, Branded CPG and Flavors & Ingredients.
Background
On December 29, 2023, Notch View Capital Management (5.9%) stated that it plans to discuss ways to enhance shareholder value with the management and board of directors. Source
On January 3, 2024, Notch View Capital (5.9%) sent a letter to the Board expressing concern about the company's performance and the delayed response to a June 2023 acquisition offer, advocating for an immediate sale due to financial underperformance and rising debt. Despite $300 million in acquisitions, Whole Earth significantly missed its 2023 adjusted EBITDA forecast by over 33%. Profitability fell short, with debt rising due to acquisitions, having reached over $411 million in net debt by September 2023, at 5.4x adjusted EBITDA. Notch View deemed that leverage level unacceptable and saw a target of below 3.0x as achievable by 2027.
Update
On February 13, 2024, the company entered into a definitive agreement to be acquired by an affiliate of Sababa Holdings FREE, LLC for $4.875 per share.
On February 13, 2024, Notch View Capital sold its entire stake in the company.