Israel’s Eshbal Functional Foods has acquired the assets of US-based Gluten Free Nation on the second attempt after a deal fell through last year.
As part of efforts to expand in the US and build on a previous acquisition of Swonder Bread in that market, Eshbal signed a letter of intent in June to purchase Texas-based Gluten Free Nation, otherwise trading as Starcall Broadcasting.
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However, the transaction was then pulled in August, with Eshbal stating at the time it “did not mature to a final agreement”.
Eshbal CEO Tomer Bar Meir clarified with Just Food today (9 February) that there was an “issue” with the original negotiations, declining to go into any specific detail.
“We decided to shift from an acquisition to an asset purchase,” he said, adding the transaction now struck includes recipes, customers and suppliers, essentially everything but the registration name.
It does not include any factories because Houston-based Gluten Free Nation employed two manufacturing partners, both of which will be retained post-deal, Meir confirmed.
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By GlobalDataThe acquired business will sit under the Israeli company’s subsidiary, Eshbal USA.
Founded by Randi Markowitz, Gluten Free Nation is a maker of gluten-free sweet and savoury bakery products, including cookies, cakes and buns, which are distributed through the retail and foodservice channels.
Eshbal, which is listed in Toronto, said in a statement on Friday (6 February) that the new deal was struck through “a bill of sale and assignment agreement” with Starcall and its own US subsidiary.
The transaction price is $736,425 through a combination of $236,425 in cash and the remainder in new Eshbal shares. The deal needs clearance from the TSX Venture Exchange in Canada.
In a manufacturing development revealed last month, Eshbal said it had entered a contract with the Canadian company Queen St Gluten Free to produce its gluten-free products for the North American market.
Starting with Eshbal’s gluten-free pita bread, the partnership is expected to expand to other of its products.
Eshbal produces gluten-free bakery products using natural ingredients such as teff and chia. Its vegan, low-carb and sugar-free portfolio also includes protein snacks and dietary supplements.
It owns the Barili brand of pita breads, buns and cookies, and also the Caragil line of flours and cake mixes.
In July, Eshbal acquired a majority stake in US low-carb and gluten-free producer Dare to Be Different Foods (D2BD).
Also last year, Eshbal entered a deal with Florida-based Active Marketing Group to provide nationwide sales and marketing support across the combined product portfolio.
