Forbidden Foods acquires Oat Milk Goodness in US$2.3M deal

AUSTRALIA – Australian healthy nutrition business Forbidden Foods is set to acquire domestic alt-milk producer Oat Milk Goodness (OMG) for A$3.5m (US$2.3m).

The acquisition aims to leverage Forbidden Foods’ established distribution network and relationships with major retail groups across Australia.

Plant-based OMG, co-founded in 2019 by Australian cricketer Steve Smith along with Tony Adams and Daniel Rootes, has been generating annualized revenues of A$1.2m, according to Forbidden Foods’ ASX filing on 14 August.

“We are pleased to confirm this strategic acquisition with a company of OMG’s calibre,” said Forbidden Foods CEO Alex Aleksic.

“The proposed transaction represents a unique opportunity to leverage the respective strengths of both companies and create an integrated multi-channel, health-focused products business serving domestic and international markets.”

Aleksic, who was appointed CEO of Forbidden Foods last year, emphasized that OMG’s product suite complements Forbidden Foods’ core range of Blue Dinosaur healthy snack foods by adding a leading health-drink range in a fast-growing market.

“More broadly, this transaction marks the company’s maiden step in transitioning to a brand manager in the ‘better for you’ segment of the FMCG sector to further capitalize on the consumer shift towards healthy choices,” Aleksic added.

“The company is currently assessing a number of other value-accretive opportunities and will provide further updates over the coming months.”

OMG’s product range includes flavoured milks and oat milk drinks, with listings in Woolworths and Ampol Foodary outlets in Australia, as well as various independent and health food stores.

The ASX filing noted that OMG is “actively pursuing international expansion” with an initial focus on India.

“We are excited to have entered into this SPA with Forbidden Foods and are confident that it will provide a springboard for OMG’s future growth,” Steve Smith stated.

While there are several synergies between the businesses, OMG has the potential to benefit from the agreement through access to capital markets and international expansion opportunities.

Forbidden Foods posted a net loss before tax of A$1.1m in the first half of its 2024 financial year, a 104% improvement on the previous corresponding period and the best earnings performance by the company since it was listed on the ASX in September 2020.

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