Acquisition complete: NGS secures the world’s only certified organic, plant-based infant formula approved for Australian shelves
Nutritional Growth Solutions Limited released an investor presentation in October 2026 following the completion of its acquisition of 100% of Sprout Organic. Shareholder approval was granted on 10 August 2026, with the transaction now fully completed. Selasi Berdie, Sprout Organic’s founder, has been appointed CEO and Executive Director of the combined group.
The A$8.0 million consideration was paid entirely in NGS shares, a structure consistent with the terms set out in the original acquisition announcement when NGS entered the binding Share Sale Agreement with Sprout Organic’s founders in May 2026.
To fund integration, inventory and working capital, the company completed a A$2.5M placement of 125 million shares at A$0.02 per share. Management outlined a combined platform covering birth to adolescence across two brands with no channel overlap, framing the merger as expansion rather than consolidation.
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Why Sprout Organic: a regulatory moat that money alone cannot replicate
The presentation detailed a competitive position that, as at 2026, very few companies globally can claim. Only three fully plant-based formulas worldwide are formulated and approved for infants under 12 months. Of those three, only Sprout Organic can be sold in Australia.
The two European alternatives, Bébé M and Prémiriz (both from France), are approved in the European Union only and are not approved for sale under the Australian standard. Management’s framing is precise: the barrier is regulatory compliance and formulation IP, not marketing spend. Provisional patents have been filed for the proprietary formulation, including stable encapsulation of plant-based oils and nutrients.
Structural demand underpins the opportunity. Third-party data cited in the presentation indicates that approximately 10% of Australian infants have a food allergy, among the highest rates reported globally, and around 2% have cow’s milk protein allergy — a diagnosed need for dairy-free formula, not one created by advertising. Separately, 72% of millennial parents express a strong interest in plant-based nutrition.
The global plant-based food market provides further context, per The Business Research Company (January 2026):
| Year | Market Value (US$B) |
|---|---|
| 2025 | $64B |
| 2026 | $73B |
| 2030F | $124B |
The market is forecast to grow at approximately 14% CAGR to 2030. The global infant formula market is valued at over A$156B with forecast growth of around 8% CAGR, with the organic and allergy-friendly segment representing approximately A$47B (around 30% of the total). Australia alone accounts for A$2.06B in baby and infant formula sales, with a forecast 9.1% CAGR.
What makes an infant formula “certified organic and plant-based” — and why it’s so hard to achieve
Food Standards Australia New Zealand (FSANZ) sets the regulatory standard for infant formula sold in Australia. A product must be nutritionally complete for infants under 12 months — covering every vitamin, mineral, protein and fatty acid a baby requires. Achieving this with 100% plant-based ingredients, and no dairy, soy or palm oil, is technically demanding because many nutrients are either absent from plant sources or exist in forms that are difficult for infants to absorb.
Sprout Organic’s formulation is built on organic sprouted rice and pea protein, with DHA sourced from algae. Organic certification is provided by Southern Cross Certified; vegan certification is provided by Vegan Australia. These are independent third-party verifications, not marketing claims. The product also received the Best Children’s Product recognition at the World Food Innovation Awards.
Combined financial performance: A$5.1M revenue in eight months, near break-even
The presentation disclosed unaudited management account figures for the combined group covering January to August 2026, with Sprout Organic shown on a pro forma basis for periods before completion of the acquisition.
The headline results:
- Combined revenue: A$5.11M (January to August 2026)
- 3.9x the NGS standalone revenue for the same period
- Normalised group gross margin: 34% (Healthy Heights 35%, Sprout Organic 39%)
- Normalised EBITDA loss: A$0.19M, close to break-even before integration savings
- August 2026 revenue of A$0.72M was the highest month of the period
Monthly revenue by the combined group was as follows (A$’000): January 647, February 526, March 617, April 682, May 625, June 616, July 670, August 724.
The presentation identified A$870k in annualised cost savings from shared corporate functions, lower listing and director costs, and back-office consolidation, with the majority actioned on completion.
Selasi Berdie, Founder, Sprout Organic; CEO, NGS
“The idea for Sprout Organic sprung from our search for clean, plant-based formulas to feed our own kids. When we came out of stores empty-handed, we realised we’d identified a huge gap in the market.”
The capital structure on completion is set out below. The A$8.0M acquisition consideration was paid entirely in NGS shares, with no deferred component. Of the A$2.5M placement proceeds, A$0.9M was paid at completion (founder loans A$0.65M, advisory fees A$0.25M), and A$1.6M was retained for integration, inventory and working capital.
| Share Category | Shares (Million) | Notes |
|---|---|---|
| Shares on issue at 30 June 2026 | 333.1M | |
| Placement at A$0.02 | 125.0M | Proceeds fund integration, inventory and working capital |
| Sprout Organic consideration shares (deemed A$0.02) | 401.2M | 331.8M shares in 12-month voluntary escrow (90% of the four major vendors’ holdings) |
| Total on completion | 964.0M | Market capitalisation at A$0.02: A$19.3M (not a trading price) |
Cash at 30 September 2026 will be reported in the September quarter Appendix 4C.
From birth to adolescence: one platform, two brands, expanding distribution
The presentation outlined a lifecycle logic spanning birth to the teenage years. Sprout Organic covers 0 to 36 months with its infant formula and toddler drink. Healthy Heights covers 3 years and over with two products, Grow Daily 3+ and Grow Daily 10+, both supported by randomised controlled trials and four peer-reviewed publications, including in the Journal of Pediatrics in 2014 and 2016. As the presentation stated: “Most kids’ nutrition brands sell a promise. Healthy Heights sells published evidence.”
The two brands operate through different channels to different buyers. Active markets for each brand are as follows:
Sprout Organic live markets: Australia (Chemist Warehouse nationally, representing approximately 16% of CY25 revenue; Woolworths and Coles online; Shopify; Amazon), United States, China (Tmall, RedNote and JD, live since May 2026), New Zealand, Malaysia, and UAE.
Healthy Heights live markets: United States (Amazon, Walmart.com, iHerb and healthyheights.com).
Cross-sell and new market activity planned or in progress includes: Healthy Heights into Australian pharmacy via Sprout’s network; the Sprout toddler, kids and snack range onto US Amazon and Shopify; a UK pathway established; a Vietnam distributor appointed; and Chile entry underway.
The integration plan is structured across three phases:
- 0 to 3 months: Align brand and marketing; integrate financial reporting and systems; scale new distributor markets in Vietnam and Chile; launch US-specific SKUs.
- 3 to 6 months: Cross-sell Healthy Heights into Sprout’s Australian pharmacy network; establish North American warehousing for Sprout Organic.
- 6 to 12 months: Launch the combined innovation roadmap; extend the product range; optimise procurement at the new scale.
Six markers management highlighted for investors to watch over the next 12 months:
- First combined-group Appendix 4C (September 2026 quarter)
- Healthy Heights ranged in Australian pharmacy through Sprout’s network
- Inventory landing and converting to sales across both brands
- Sprout toddler, kids and snack range live on US Amazon and Shopify
- New market landings, including UK, Vietnam and Chile
- Identified cost savings flowing through the accounts
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