Surpeme PLC
Acquisition of protein manufacturing assets
By Elric Langton | 5 January 2024
Supreme plc has swept up Foodiq UK Holdings Ltd for a mere £175,000, a move that veers sharply from the conventional wisdom of finance given the state of Foodiq Holding’s finances. Far from a gamble, this acquisition seems to be a masterstroke in Supreme’s grand design to fortify its standing in the ever-expanding arenas of protein and vitamins, which should help cushion the Company from the throw-away vapes.
Although at first glance, you may think I have gone way too deep into what is a relatively short news item, and for just £175,000, is it really worth it? There is an excellent reason I have dedicated so much effort to this particular acquisition. I sense it will serve as a good thesis for SkinBioTherapeutic’s proposed buy-build acquisitions, which are expected to be accretive, and similar acquisition logic applies.
It should be noted that Foodiq’s financial situation is not looking good. Their net worth has gone into the negative at -£782,624, and they have a substantial net current liability of £1,642,032. However, Supreme’s decision to acquire Foodiq for only £175,000 suggests that they have a strategy that goes beyond just looking at the numbers. Even though Foodiq’s assets cost almost £1.2 million, investors should know that Supreme’s accounts will absorb any losses or liabilities. This means that while the deal may seem sweet, it’s not relatively as straightforward as it appears. Nonetheless, it’s unlikely to threaten Supreme’s cash resources, which will become apparent soon.
Supreme’s acquisition is not just a purchase; it’s a veritable chess move. The prize? A cutting-edge, fully accredited, automated contract manufacturing facility nestled near London. This facility, barely a year and a half old and constructed at a hefty sum of nearly £1.2 million, is a jewel in the crown of Supreme’s manufacturing empire. The increase in wellness manufacturing capacity by a staggering 40% propels Supreme into a new echelon in the competitive protein and vitamin market.