North America: Neptune acquires controlling interest in Sprout Foods

  • 11 February 2021
  • M&A
Sprout, an organic plant-based baby food and toddler snack company with $28 million in annual net revenue
Photo as seen on Sprout Foods’ Facebook page

Quebec-based health and wellness company Neptune Wellness Solutions, which provides plant-based sustainable brands, has acquired a 50.1% controlling interest in New Jersey-headquartered Sprout Foods, a portfolio investment of Morgan Stanley Expansion Capital (MSEC).

The transaction consideration includes a $6 million cash payment and the issuance of 6.74 million Neptune common shares worth $12 million. Additionally, Neptune is guaranteeing a $10 million note issued by Sprout in favour of MSEC.

As part of the transaction, investment funds managed by MSEC become a major shareholder in Neptune and will partner with the company to grow Sprout within Neptune’s portfolio of consumer product goods.

Sprout Foods is an organic plant-based baby food and toddler snack company founded in 2008 with $28 million in annual net revenue. Sprout was founded in 2008 and has been a portfolio company of investment funds managed by MSEC since 2018.

Michael Cammarata, chief executive and president of Neptune, said: “We are thrilled to welcome Sprout into the Neptune Wellness family and to be working alongside MSEC to continue Sprout’s growth. We value the team’s confidence in Neptune and look forward to working together as we grow Neptune’s CPG brand portfolio. Sprout fits perfectly into Neptune’s existing portfolio of innovative and disruptive health and wellness brands, including Neptune Wellness, MaxSimil, MoodRing, Forest Remedies and Ocean Remedies.”

Lincoln Isetta, managing director of MSEC added: “Morgan Stanley Expansion Capital has enjoyed a long-standing relationship with Neptune chief executive Michael Cammarata. Michael is one of the most talented, energetic and innovative leaders with whom we have partnered, and has a compelling track record building brands. We believe Michael’s success in this space – coupled with the expertise of Neptune’s chief financial and global operating officer Dr Toni Rinow – positions Sprout for success, and we are excited to continue building out Sprout’s growth through Neptune’s compelling brand platform.”