Loma Linda Maker Pulls Out of Acquisition Deal with Above Food, Citing Inflation & Covid-19 Disruptions

Atlantic Natural Foods, the parent company of Loma Linda and Tuno, has terminated an agreement to be acquired by fellow plant protein maker Above Food.

Three years after first announcing the deal, Canadian plant-based ingredients supplier Above Food’s acquisition of Atlantic Natural Foods has fallen through.

The latter, which owns shelf-stable vegan brands Loma Linda, Neat and Tuno, withdrew from the agreement last month. It said the decision was mutually agreed upon by both parties.

Atlantic Natural Foods said this reflects a “strategic realignment following a comprehensive evaluation of the evolving business landscape”, with macroeconomic factors like rising food inflation, supply chain siruptios, and the global impact of Covid-19 all playing a key part in the decision.

Companies cite Covid-19, inflationary challenges

The original agreement was announced in November 2021. It was set to make Above Food the first producer of shelf-stable vegan foods with complete vertical integration in the supply chain, from field to product.

The financial details of the deal were under wraps, but it was initially expected to close in the first quarter of 2022. Despite missing that timeline, Above Food confirmed in 2023 that the takeover would go through as part of its plans to go public.

The ingredients manufacturer was listed on the Nasdaq stock exchange this July (under the ABVE ticker) after merging with Bite Acquisition Corp, a special purpose acquisition company (SPAC) designed to take businesses public without going through the IPO process.

Above Food’s portfolio of 120 plant-based meat, dairy and baby food products and 17 unique grains and proteins is distributed at over 35,000 retail points in 29 countries. “We started Above Food with the intent to drive positive change across the entire food chain,” co-founder and CEO Lionel Kambeitz said after the SPAC merger.

“More recently, as food insecurity escalates and the global food supply chain becomes more fragile and subject to disruption, we believe Above Food is well-positioned to ensure communities and consumers around the globe have access to nutritious ingredients that are grown and harvested according to sustainable farming methods.”

Now, it seems those same reasons have led to the termination of its Atlantic Natural Foods takeover, with the latter now transitioning back to private ownership after a “three-year journey toward entering a public environment in partnership”.

Against the rising trend of M&A deals

“Operating in the industry’s ever-changing landscape has not been without its challenges, but we remain steadfast in our commitment to resetting the standards for the years ahead,” said Doug Hines, chairman of Atlantic Natural Foods.

“We are drawing on tried-and-true food preparation and supply methods that have withstood the test of time to meet the needs of our global consumers.”

But despite the decision to cancel the agreement, the two companies will continue to maintain their collaborative ties. Atlantic Natural Foods will retain shares in Above Foods, while the latter will retain its interest in the Loma Linda owner.

“This strategy allows us to reinstate our commitment to returning the company to its core principles, products and consumer while carrying out our mission of creating healthy food for the world in 2025 and beyond,” noted Hines.

Plant-based companies have had a tough couple of years amid the hurdles cited by Atlantic Natural Foods, with sales and investment dipping just as consumers turn their noses up at ultra-processed foods, despite the misconceptions around this category and plant-based meat.

But these market challenges have actually fuelled M&A activity within the sector, with a growing number of plant-based deals this year. Companies like Wicked Kitchen, Deliciously Ella, Tofutown and Nuggs have all been acquired in the last 12 months – so Above Food and Atlantic Natural Foods’s development is contrary to the trend.