MORTON GROVE, Ill. - Lifeway Foods, Inc. (NASDAQ: LWAY), a prominent supplier of kefir and fermented probiotic products with a market capitalization of $356 million, has publicly declined an acquisition proposal from Danone (EPA:DANO) North America PBC, stating the offer significantly undervalues the company. According to InvestingPro analysis, the company maintains a "GREAT" financial health score, supported by strong fundamentals and robust growth metrics. This announcement follows a letter from Danone dated December 30, 2024, which Lifeway's Board of Directors has reviewed with independent financial and legal advisors.
The Board has expressed its willingness to consider a sale, but only at a valuation that reflects the company's true worth. Lifeway has also declared its intention to invalidate a 1999 stockholders agreement with Danone, citing non-compliance with Illinois law, and plans to pursue remedies to enforce this stance.
Under the leadership of Chairwoman & CEO Julie Smolyansky, Lifeway has reported 21 consecutive quarters of growth up to the fourth quarter of 2024. The company's robust performance includes double-digit year-over-year revenue growth in the third quarter of 2024 and significant shareholder returns. Lifeway's full-year 2024 net sales are anticipated to be between $185.0 million and $186.5 million, a notable increase from $160.1 million in 2023.
The Board attributes the success of Lifeway's standalone business plan to Ms. Smolyansky's stewardship and is committed to protecting the interests of the company and its shareholders in light of Danone's unsolicited acquisition proposal.
Lifeway Foods, recognized by Forbes as one of the Best Small Companies, is a leader in the probiotic, fermented beverage sector in the United States and has expanded its market to include Mexico, Ireland, South Africa, the United Arab Emirates, and France. The company's strong market position is reflected in its healthy balance sheet, with InvestingPro data showing more cash than debt and a robust current ratio of 2.68, indicating excellent financial stability.
This article is based on a press release statement.
In other recent news, Lifeway Foods, a leading supplier of kefir and fermented probiotic products, turned down a revised acquisition offer from Danone North America PBC of $27.00 per share. The board of Lifeway Foods deemed the offer to undervalue the company substantially. This decision comes after Lifeway reported 20 consecutive quarters of year-over-year growth, with revenues rising from $94 million in 2019 to $160 million in 2023, a significant 71% increase. The company also experienced a gross profit growth of 92% during this period.
In terms of financial performance, Lifeway Foods announced a 12.7% increase in net sales for the third quarter of 2024, reaching $46.1 million. This growth has been attributed to the popularity of its flagship drinkable kefir product, which saw a 22% sales increase year-to-date. The company's gross profit margins also improved to 25.7% for the quarter, supported by strategic investments in sales and marketing.
These are recent developments that underline Lifeway's commitment to delivering high-quality, nutritious products and sustaining its growth momentum. The company's expansion plans include new product introductions and increased distribution in international markets. The next update on the company's performance will be provided during the year-end call.
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