Nutritional Growth Solutions Ltd (ASX:NGS) has entered into a binding agreement to acquire 100% of Sprout Organic Pty Ltd, owner of what the company says is the world’s first FSANZ-approved 100% organic, plant-based infant formula business.
The acquisition is designed to create a broader paediatric nutrition platform spanning infant, toddler and childhood nutrition, combining Sprout’s infant and toddler products with NGS’s Healthy Heights growth nutrition range.
NGS will acquire Sprout for upfront consideration of about A$8 million, to be satisfied through the issue of 401,228,887 NGS shares at a deemed issue price of A$0.02 per share.
The company has also received firm commitments to raise A$2.5 million before costs through a placement of 125 million shares at A$0.02 per share.
Funds will be used for working capital, inventory expansion, sales and marketing, integration costs and general corporate purposes.
The transaction, placement and related securities issues remain subject to shareholder approval at the company’s AGM, expected in July 2026, and other customary conditions.
On completion, Sprout founder and CEO Selasi Berdie will become NGS CEO and executive director, subject to shareholder approval, while Sprout COO Ben Chester will become group COO.
"Sprout and NGS are a natural fit — premium, clean-label and clinically supported products, and a shared focus on children's nutrition. Combining Sprout's organic, plant-based infant and toddler range with NGS's Healthy Heights products creates a complementary platform that supports children across multiple stages of development, with the scale, distribution and operational capability of a larger group behind it. I'm honoured to lead the combined business and excited about what we can build together," Berdie said.
Current executive director and interim CEO Manik Pujara will transition to a non-executive director role.
The company expects the transaction and placement to be put to shareholders at the AGM in about six weeks, with settlement of the placement shares shortly after approval.
"This is a genuinely transformational acquisition for NGS. Sprout has built something rare — the world's first FSANZ-approved 100% organic, plant-based infant formula — alongside strong retail and export distribution and attractive gross margins," executive director and interim CEO, Manik Pujara, said. "Bringing it together with our clinically backed Healthy Heights range creates a paediatric nutrition platform spanning infancy through childhood, across Australian and international markets. I'm delighted to welcome Selasi and Ben to lead the combined group, and I look forward to supporting them as a non-executive director."
What Sprout brings
Sprout Organic is an Australian nutrition company focused on organic, plant-based and allergen-friendly products for infants and toddlers.
Its product range includes infant formula, toddler drink, kids’ essential shakes and snack bars, with distribution through more than 1,000 retail outlets including Chemist Warehouse, Woolworths Online, Coles Online and pharmacy networks.
The company also has an export footprint across China, New Zealand, Malaysia, the UAE and other markets, supported by Shopify and Amazon direct-to-consumer channels.
Building a lifecycle nutrition platform
The deal will combine Sprout’s 0–3-year-old infant and toddler range with Healthy Heights’ clinically supported products for children aged 3–10+, creating a nutrition platform from birth through adolescence.
The company has identified about A$870,000 in annualised cost savings through operational integration, corporate rationalisation and shared back-office functions.
NGS also expects cross-selling opportunities, including launching Sprout products through its US Amazon and Shopify channels, while introducing Healthy Heights into Sprout’s pharmacy network and China footprint.