Planet Organic completes Trophic aquisition
and supplements manufacturer and distributor Trophic Canada, and is
eyeing more opportunities across Canada and the United States.
The Canadian natural foods retailer paid Trophic shareholders C$5.5 million through the issuance of 6,875,000 shares, and assumed C$552,000 of Trophic's debt.
The transaction was first announced in August 2004, when Darren Krissie, Planet Organic's vice president of corporate development and CFO, said: "This is our first vertical integration and will give us a bit more earning power and bring us closer to the consumer."
"Vitamins and minerals are an important part of what we do and this acquisition will potentially bring us a strong private label and more access to profit lines," he added.
By combining retail and manufacturing resources, the company hopes to strengthen its market position to compete against mainstream stores, and "consolidate the fragmented naturals and organics market" in Canada.
It makes no secret of its intention to make more acquisitions and mergers on Canadian soil, establish new retail operations and also make forays over the border into US.
Penticton, BC-based Trophic will still operate as a separate division headed by its existing management team.
Several changes have been announced within Plant Organic's management structure, however. Chairman and director Ron Francisco will also take on the roles of president and CEO. Mark Craft and Roy Sangster have been appointed as executive VPs and presidents of their divisions - Planet Organic Markets and Sangster's Health Centres respectively.
The numbers around the board table have also been swelled by the addition of Ian Newton, managing director of Ceres Consulting, as a director.
Earlier this fiscal Planet Organic made two strategic acquisitions to extend the reach of its retail operations: Sangster's Health Centres, a Canada-wide chain of 35 vitamin and supplement stores, and Great Ocean Natural Foods organic and natural products retailer, located in Halifax.
On the opening of Organic's first Calgary store in 2003, Craft said the aim was to "build Planet Organic into a corporation with annual sales of C$50 million in five to seven years".
In addition to its Sangster and Great Ocean interests, Planet Organic has four supermarkets in Canada, in Edmonton, Victoria, Calgary and Port Coquitlam and reports growth of 700 percent over the past four years to annualized revenues of $14 million.
