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18 August 2020 | IPO

Helping kids reach new heights

Helping kids reach new heights  |  Nutritional Growth Solutions (NGS)

IPO OPPORTUNITY  –  Baker Young Corporate Advisory recently completed the $1.5M pre-IPO for Nutritional Growth Solutions (ASX:NGS), with very strong demand. NGS is now moving towards a considered IPO in August/September 2020, raising between $5-7M.

The Israel-based private company manufactures a unique protein powder, based on clinical research, to aid growth for children aged three to nine years, which is consumed in beverages.

The current core market is the US, however, the company plans to diversify, reaching new markets and introducing new products, including one for children aged 9 through to the teen years.

“We intend to launch the product in China in the coming weeks under its own Healthy Height brand, and that will be packaged in New Zealand and shipped to China,” NGS chief executive Liron Fendell told Stockhead in an interview.

Key points to note

•  Strong early revenue. All organic growth, no increase in marketing spend. Circa $3.1M yearly run rate.
•  Patented formulations.
•  Clinically studied (double-blind placebo-controlled). No competitor globally can make the same clinically studied claims.
•  Tier-1 Chinese non-exclusive distribution agreement recently signed with High Hopes Baby.
•  South Korean distribution agreement is in discussion.
•  Licence sold to GSK India for GBP$7M (AUD$14M).
•  CPS reimbursement code in the U.S.
•  Strong board and management, led by Brian Leedman as Chairman (Founder/Co-founder of RAP and OSL).
•  Attractively price with a $12.5M EV @ Listing. This equates to 4x revenue, well below the closest peers trading at 10x.

Comments on sales

•  Sales increased 110% pcp Q2 CY20.
•  Sales increased 50% pcp Q1 CY20.
•  $3.1M CY20 run rate (increase 82% pcp CY19).

Positioned at the crossroads of medicine and nutrition

NGS was established at Schneider Children’s Medical Center of Israel by a professional team that focuses research on the interaction between nutrition and growth. Paediatricians at Schneider have over 20,000 patient visits every year from children living around the globe with issues relating to growth. This has spurred these world-renowned scientists, doctors, and researchers to focus on nutritional growth retardation in children and adolescents. Schneider’s experts use this wealth of practical and clinical knowledge to develop evidence-based clinically tested nutritional solutions for children. Read more about NGS here.

See Baker Young company snapshot for NGS, including a recent article published in the Australian Financial Review.

See IPO watch story on Stockhead here.

For more information, contact your Baker Young advisor.