#United States #Lifeway Foods #Danone #Probiotics #Morton Grove

Lifeway Foods Rejects Danone's Acquisition Proposal

MORTON GROVE, Ill., November 26, 2024
Lifeway Foods, Inc. (NASDAQ: LWAY), a prominent American supplier of kefir and probiotic products, has disclosed the rationale behind its decision to reject Danone North America's latest acquisition proposal. The unsolicited proposal, presented on November 15, 2024, suggested a purchase price of $27.00 per share for Lifeway's outstanding shares.

Board's Valuation Concerns

The board of Lifeway believes that the proposed price significantly undervalues the company, especially given its strong market positioning and growth trajectory. Lifeway's board is open to the idea of selling the company but aims to ensure that any offer reflects its true worth.

Lifeway Foods is the number one kefir brand in the U.S. and has seen double-digit growth, which stands out in the dairy and food industry. The company's past financial performance corroborates this growth potential, showcasing its capability to drive shareholder value beyond Danone's offer.

Strong Financial Performance

Lifeway Foods has not only sustained growth but has experienced considerable achievements in the past five years, including:

• - 20 consecutive fiscal quarters of year-over-year topline growth.
• - An impressive 788% total shareholder return from 2019 to 2024.
• - A revenue increase from $94 million to $160 million, achieving a 71% growth and a 14% CAGR during the same period.

These results demonstrate Lifeway's robust financial health and suggest that shareholders can expect further advancements, especially with projections indicating annual Adjusted EBITDA could rise from $22 million in 2023 to between $45 million and $50 million by 2027.

Future Growth Indications

The board assessed Lifeway's operational efficiency and product innovation, identifying growth levers that position the company for long-term success. Lifeway's proprietary products not only underscore the importance of gut health but have also garnered increased market recognition, reinforcing the demand for kefir and similar products.

Moreover, the board views Lifeway's evolution into various product categories, alongside ongoing operational improvements, as critical components fueling profitability growth. The combination of strong product offerings and a commitment to operational excellence further enhances Lifeway's attractiveness as a long-term investment.

Conclusion

In essence, Lifeway's rejection of Danone's revised proposal highlights the company’s confidence in its market strategy and future growth potential. Lifeway Foods remains steadfast in its pursuit of maximizing shareholder value and is backed by esteemed advisors, including Evercore as financial adviser and Sidley Austin LLP as legal counsel.

This development sets the stage for an intriguing chapter in Lifeway Foods' corporate journey, one that signals the significance of valuing a company based on its actual performance, growth prospects, and market positioning.

To learn more about Lifeway Foods and its expanding range of products, visit Lifeway Foods.