Potential outcome of our investments (just imagined scenarios)
The food market is now covered by a large number of new companies (including ELSE) and MAJORS did suffer a lot over 2021 following the arrival of multiple new competitors offering plant based food or better.
BABYF (30 months old) could be a great buyout target (I understand that our president did refuse offers in the past), particularly in consideration of the revenues generated during the 3 first Q’s of 2021 (let’s see what Q4 will show) and the fact that the company doesn’t have its own manufacturing facility.
Here is an hypothetical case to consider:
Else Nutrition Holdings Inc
- Revenues (going rate: Q3 2021 X 4): Less than US $ 4,000,000
- Market Cap: US $100,000,000 (120,000,000 O/S X US $0,90)
- Canaccord Genuity lowered their 12-month price target to C$4.00 from C$5.75 (December 6, 2021)= 'estimated Fair value MC target': US $500,000,000
Just as an example, US $500,000,000 could be offered by BYND in the form of 7,500,000 BYND shares (Current pps of US $65 representing for them a dilution of 12%) but one has to consider that BYND shares were trading at $180/sh 12 months ago in January 2021.
Bynd is just an example. Nestle SA (NSRGF) as another example could also acquire Very Good Food by issuing 4,000,000 new shares at $130, a dilution of less than 1,5% for its shareholders.
Traditional food producers/distributors will have to adapt to the changes in the market and that will probably provoque a market consolidation, to many newcomers hurting somewhat (or a lot) traditional MAJORS
