UK-based food investor S-Ventures has started negotiations over a potential sale of its subsidiaries to listed investment group Riverfort Global Opportunities (RGO).
In a statement released today (22 March), S-Ventures said it was “in discussions” to sell 100% of its assets to the London-headquartered investor.
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The deal, if completed, would amount to a reverse takeover, with RGO changing from “an investing company into an operating business”, the investor said in its own stock-exchange filing.
The transaction would value S-Ventures at £3.5m ($4.4m).
S-Ventures has decided to sell its operating subsidiaries to offer them “access to further capital to fund their investment and growth”.
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Besides the prospective sale talks, the investor has also secured two sets of funding loans from RGO and existing shareholder Sherwood International Holdings, worth £2m.
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By GlobalDataBoth loans are to be offered for a 12-month term each, with 15% interest, a 5% arrangement fee and are “repayable on maturity”.
S-Ventures said it has already been granted a bridging loan from “a Middle Eastern family office” worth £1m. While this was originally due to be paid in May, the loan has now been extended to November.
“The lender has also been given the option to convert the loan into equity”, S-Ventures added, if RGO’s acquisition goes ahead, noting that Sherwood also agreed to the same conditions regarding its loan.
S-Ventures made a call for fundraising last October. At the time, it said it intended to raise over £2.5m.
It was looking for £1.25m to “accelerate progress, consolidate costs and deliver efficiencies”, as well as an additional £1.25m to cover “deferred consideration” costs which evolved out of its acquisition of gluten-free brand Juvela in December 2022.
The group’s search for funding came as it faced “a combination of factors including inflationary headwinds, higher interest costs”, according to its annual report in 2022.
S-Ventures also attributed some of its losses to the German free-from pasta and bread brand Lizza, which it bought in 2022 and filed for insolvency the following year.
As well as Juvela, S-Ventures’ portfolio includes healthy snacking label Purely plantain chips, Pulsin protein shakes and powders, plant-based meat maker Plant Punk and digital marketing agency Market Rocket.
S-Ventures CEO Scott Livingston said the group was “delighted to announce this funding facility and proposed transaction”, which has evolved “Against the background of a very challenging environment over the past twelve months within capital markets”.
He added: “The combination with RGO would provide us with a quotation on AIM and better access to new capital to support the growth and development of the SVEN businesses. The commitment of our shareholders and directors to this process is testament to our belief in the businesses.”
