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FREE - Whole Earth Brands


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  • 4 weeks later...

The company has just released its Q3 numbers. Not that great, by the way.

 

It also acquired Swerve for $80M, or a 16x multiple. The company says it expects this multiple to lower to 9.5x after synergies. Not cheap in my eyes.

 

All in all, I was not happily surprised by anything this quarter.

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Yea Ive been surprised to see the enthusiasm around this one. Its a pretty classic SPAC and what else I noticed that I dont like is yea, the acquisition and the multiple on that...but they also promotionally announced a buyback maybe a couple months ago...have from the quick glance I took this AM, didnt repurchase a share. In other words, they are exhibiting classic behavior of a typical post deal spac. I wouldn't hold my breath on them executing their way into turning 16x to 9...

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It's an attractive niche, but management seems very underwhelming. I hate absolute targets, like wanting to hit 1b revenue (what about value creation?), and management doesn't seem very forthcoming (CEO etc - chairman seems better). I felt they kinda dodged whether Swerve management would stay on post acquisition on the conference call, and they also weren't very firm on Swerce synergies (or at least I don't really buy their answers). I'm kinda attracted by the space they occupy and the headline valuation, but I'm not really comfortable with management and thinks there are easier hurdles to clear. Will be very interesting to follow though, I think the business is much more interesting than most of the crap getting SPAC'ed.

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  • 4 months later...

Is anyone still following this one?

 

I was wondering if someone had any insights regarding the company's growth prospects. The management talks about India and China, those sound pretty big, but how easy is it to enter those markets?

 

Gross margin guidance is coming down to 34%, there's not much info on Wholesome, and debt is going up... they say they want to deleverage going forward, so....

 

Matt from Laughing Water mentions FREE entering the indexes in a few months, does anyone know how this works? How can we  know which stocks will enter the indexes?

 

Cheers

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