S-Ventures PLC - Acquisition of Hero UK Ltd Trading as Juvela

15^th December 2022

S-VENTURES PLC

("S-Ventures" or the "Company")

Acquisition of Hero UK Ltd Trading as Juvela

S-Ventures plc (AQSE: SVEN) (OTCQB: SVTPF), the enterprise company investing in and growing exciting brands across the natural, wellness and food-tech categories, is pleased to announce the acquisition of 100% of the share capital of Hero UK Ltd trading as Juvela ("Juvela"") (the "Acquisition"). Hero UK has been acquired from the Hero Group, a Swiss consumer foods group (the "Vendor").  The company manufactures and distributes a range of branded gluten free products under the Juvela brand which include a high quality and tasty free-from range of breads, mixes and pastas sold in the UK retail and pharmacy markets.

Terms of the Acquisition

S-Ventures plc has agreed to acquire Juvela from the Vendor for a consideration of £8m cash and five million new ordinary shares in S-Ventures.

The cash is split £6.5m on completion and £1.5m deferred plus 8% interest, payable in September 2023.

The five million shares to be issued to Hero Group as part of the consideration, will represent 3.8% of the Company's enlarged share capital and will make Hero group a new shareholder and partner in S-Ventures PLC.

The Hero Group is an international food company focused on branded nutritional food products which generated revenues of CHF 1.14 billion in 2021. The Group, boasts a global footprint and its portfolio consists of many well-known international and local brands.

In order to provide funding for the Acquisition and for general working capital needs, S-Ventures PLC has also entered into new loan facilities provided by Shawbrook Bank Limited including a four year term loan of £5.5m and a £500,000 revolving credit facility. 

About Juvela

Juvela is a business manufacturing and distributing gluten-free and free-from products from its factory in Pontypool, Wales. They have been manufacturing gluten free food for people diagnosed with coeliac disease for over 25 years and are the leading brand serving the UK coeliac community under the brand name Juvela.  The product range also includes bread, flour mixes, breakfast cereals, pasta, pizza bases, crackers and biscuits.

In the year ended 31 December 2021, Juvela achieved a gross revenue of £8.8 million and has continued to operate profitably this year with expected gross sales of £8.6 million. The net assets acquired amounted to £7.5m.

Further information on Juvela may be found at: https://www.juvela.co.uk

Investment Rationale

The synergies between the Group's existing brands and Juvela are extensive with many opportunities to combine resources and cross fertilise brands and distribution channels, especially with the Group's Lizza business, acquired in September 2022, which owns a large factory and free-from facility in Frankfurt.

The UK free-from market also presents a significant growth opportunity for S-Ventures having grown at a compound annual growth rate of 6.7% between 2019 to 2021 to £1.86billion, according to the UK Free From Grocery & Pharmacy Market report. The Company believes that this sector is very promising with the potential for substantial future growth.

Change of Name

Hero UK Ltd will change its name on completion of the transaction to Juvela Limited.

Admission 

Application has been made for the 5,000,000 new Ordinary Shares, which will rank pari passu with the existing Ordinary Shares in issue, to be admitted to trading on the Aquis Stock Exchange Growth Market ("Admission"). Admission is expected to occur at 8:00 a.m. on, or around, 20 December 2022.

Total Voting Rights 

Following the issue of the 5,000,000 new ordinary shares, the issued share capital of the Company will be 130,571,687 Ordinary Shares. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interests in, or changes to their interests in, the Company under the FCA's Disclosure and Transparency Rules.

Scott Livingston, the Founder and CEO of S-Ventures comments: 

"We are delighted to add the Juvela business to our platform. We welcome Hero Group as new shareholders and are excited about the opportunity this acquisition brings to drive substantial growth and value for all our shareholders. It has been a pleasure working with Hero on this transaction."

Rob Versloot, CEO of the Hero Group, comments:

"We are very pleased to have found an ideal home where Juvela can grow to its full potential alongside other similar companies. The divestment is part of our company's long-term strategy and supports the Hero Group's focus on its core categories of Baby and Toddler Food and Snacks, Healthy Snacks, and Natural Spreads."

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