MORTON GROVE, Ill. - Lifeway Foods, Inc. (NASDAQ: LWAY), a prominent supplier of kefir and probiotic products in the U.S., announced today that its Board of Directors has unanimously decided to reject a revised acquisition offer from Danone (EPA:DANO) North America PBC. The proposal, dated November 15, 2024, suggested purchasing all outstanding shares of Lifeway for $27.00 each, which the Board considers substantially undervalues the company.
The decision came after a comprehensive evaluation with independent financial and legal advisors. Lifeway, known for its fermented dairy products, has reported its 20th consecutive quarter of growth with significant revenue increases and improved profit margins. The company's performance, with total shareholder returns of 788% over the past five years and 270% over the past three years, has surpassed that of its peers and the S&P 500 index.
Lifeway's strategic plan emphasizes expanding kefir's presence in households and exploring adjacent categories to continue its trajectory of growth and value creation for shareholders. The Board and management underscore their commitment to the company's long-term interests and the potential value of shareholders' investments.
Evercore is serving as Lifeway's financial advisor, and Sidley Austin LLP is providing legal counsel during this period. Lifeway Foods, recognized by Forbes as one of the Best Small Companies, offers a range of probiotic beverages and dairy products in various markets, including the United States and internationally.
The information in this article is based on a press release statement from Lifeway Foods, Inc. The company's future plans and expectations are forward-looking statements subject to risks, uncertainties, and other factors that could cause actual results to differ materially. Lifeway disclaims any obligation to update these forward-looking statements, except as required by law.
In other recent news, Lifeway Foods has reported a significant increase in net sales for the third quarter of 2024, marking its 20th consecutive quarter of sales growth. The company announced a 12.7% increase in net sales over the same period in 2023, reaching $46.1 million. This growth is attributed to the popularity of its flagship drinkable kefir, which saw a 22% sales increase year-to-date. Lifeway's gross profit margins improved to 25.7% for the quarter, supported by strategic investments in sales and marketing.
The company is expanding its product line and distribution, with a focus on e-commerce and partnerships to enhance brand visibility. Expansion plans include new product introductions and increased distribution in international markets. Despite navigating macroeconomic challenges, Lifeway Foods has reported five consecutive years of quarterly growth and aims for record-breaking performance in 2024.
These are recent developments that underline Lifeway's commitment to delivering high-quality, nutritious products and sustaining its growth momentum. The next update on the company's performance will be provided during the year-end call.
InvestingPro Insights
Lifeway Foods' (NASDAQ: LWAY) recent decision to reject Danone's acquisition offer aligns with several key financial indicators and market trends highlighted by InvestingPro data. The company's strong performance is reflected in its impressive revenue growth of 18.27% over the last twelve months as of Q3 2024, with quarterly revenue growth of 12.71% in Q3 2024. This robust growth trajectory supports the Board's confidence in Lifeway's standalone value proposition.
InvestingPro Tips further reinforce Lifeway's financial strength. The company holds more cash than debt on its balance sheet, indicating a solid financial position. Additionally, Lifeway's cash flows sufficiently cover interest payments, suggesting effective management of its financial obligations. These factors likely contribute to the Board's belief in the company's ability to execute its strategic plan independently.
The market seems to agree with Lifeway's potential, as evidenced by the significant return over the last week (8.34%) and the strong return over the last three months (33.16%). These metrics, along with the large price uptick over the last six months (49.94%), indicate growing investor confidence in Lifeway's prospects.
For investors seeking a deeper understanding of Lifeway's financial health and market position, InvestingPro offers 12 additional tips, providing a comprehensive analysis to inform investment decisions.
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