SYDNEY: Nutritional Growth Solutions Ltd., an Australian children’s nutrition company listed on the ASX, has entered a binding agreement to acquire 100% of Sprout Organic Pty Ltd., the owner of the world’s first FSANZ-approved 100% organic, plant-based infant formula.
The transaction, valued at approximately A$8 million in upfront share-based consideration, creates a combined paediatric nutrition platform spanning infancy through adolescence. The merged entity will offer Sprout’s infant and toddler products alongside NGS’s clinically backed Healthy Heights range for children ages three and older.
Under the deal, Sprout Founder and CEO Selasi Berdie will become NGS’s chief executive officer and executive director. Sprout COO Ben Chester will assume the role of group COO, while current NGS Executive Director and Interim CEO Manik Pujara will transition to non-executive director, subject to shareholder approval.
Addressing the ‘Allergy Capital’
Sprout’s flagship infant formula fills a critical gap for families managing food allergies, NGS said. Australia is frequently described as the allergy capital of the world on a per-capita basis, with up to 10% of Australian infants affected by an allergy and more than 2% diagnosed with cow’s milk protein allergy.
The company said conventional dairy- and soy-based formulas are unsuitable for these families. At the same time, approximately 72% of millennials, particularly those with children, express strong interest in plant-based foods, according to a 2024 GlobeScan & EAT report.
Sprout’s formula is free from dairy, soy and common allergens, and is protected by proprietary formulation intellectual property and provisional patents. FSANZ approval represents a significant regulatory barrier to competition, the company said.
Cross-Selling and Cost Synergies
NGS said the two businesses share an asset-light operating model, allowing for immediate synergies without major capital expenditure. The company has identified A$870,000 in annualized cost savings through operational integration and corporate rationalization, with US$600,000 accessible immediately after closing.
On the revenue side, NGS plans to launch Sprout’s plant-based range into its U.S. Amazon and Shopify channels, while Healthy Heights products will enter Sprout’s national pharmacy network and existing China footprint. Sprout products are already sold through more than 1,000 retail outlets, including Chemist Warehouse, Woolworths Online and Coles Online.
Capital Raising and Escrow
NGS has received firm commitments to raise A$2.5 million via a placement at A$0.02 per share to fund growth, integration and working capital. Approximately 90% of the consideration shares received by major Sprout shareholders will be subject to voluntary escrow for 12 months from the date of issue.
The transaction and placement remain subject to shareholder approval at the company’s annual general meeting, expected in July 2026, along with other customary conditions.
Financial Snapshot
For calendar year 2025, the combined group reported unaudited annual revenue of US$5.33 million, with a consolidated EBITDA loss of US$1.47 million. Those figures do not include the identified cost savings.
Pujara described the acquisition as transformational for NGS. Incoming CEO Berdie said the combination creates a complementary platform supporting children across multiple stages of development, with the scale and distribution of a larger group behind it.
Trading in NGS shares resumed immediately following the announcement.
