Nutritional Growth Solutions (ASX: NGS), a U.S.-based health, nutrition, and wellness company developing and selling clinically tested nutritional formulas for children, has announced a transformational acquisition. The company has entered a binding Share Sale Agreement to acquire 100% of Sprout Organic Pty Ltd, an Australian organic infant and children’s nutrition company specialising in plant-based and allergen-friendly products. This acquisition will integrate Sprout Organic’s portfolio, notably including the world’s first FSANZ-approved 100% organic, plant-based infant formula, into NGS’s existing offerings.
The strategic move aims to establish a diversified paediatric nutrition platform, extending Nutritional Growth Solutions’ reach across infant, toddler, and childhood categories. By combining Sprout’s infant and toddler nutrition products with NGS’s clinically backed Healthy Heights growth products, the merged entity expects to support families from birth through adolescence. This expansion addresses a growing market demand for allergen-friendly and plant-based nutrition, particularly as awareness of childhood food allergies, such as cow’s-milk protein allergy affecting up to 2% of Australian infants, continues to rise.
The transaction is anticipated to yield approximately A$870,000 in annualised cost savings through operational integration and corporate rationalisation. Sprout Organic currently has a strong retail presence, with products sold in over 1,000 outlets including Chemist Warehouse, Woolworths Online, and Coles Online. The combined group will leverage complementary Australian and U.S. distribution channels and eCommerce platforms, maintaining an asset-light manufacturing model. To fund growth, integration, and working capital, NGS has secured firm commitments to raise A$2.5 million via a placement at A$0.02 per share.
Following the acquisition, significant leadership changes are planned, subject to shareholder approval. Sprout Founder and CEO Selasi Berdie is set to become NGS Chief Executive Officer and Executive Director, while Sprout COO Ben Chester will assume the role of Group Chief Operating Officer. Current Executive Director and Interim CEO Manik Pujara will transition to a Non-Executive Director role. The majority of consideration shares issued to major Sprout shareholders will be voluntarily escrowed for 12 months from the issue date, aligning shareholder interests.
