Shares of Tattooed Chef, Inc. (TTCF) were up more than 4% Monday morning after the company announced its decision to buy New Mexico Food Distributors, Inc. and Karsten Tortilla Factory, LLC for about $35 million in cash.
New Mexico Food Distributors, Inc. and Karsten Tortilla Factory, LLC, collectively referred to as “Foods of New Mexico”, makes ready-to-eat Mexican food items for both retail and food service.
Tattooed Chef expects that Foods of New Mexico can contribute up to $200 million in annual revenue in the next two to three years.
Foods of New Mexico’s facility in Albuquerque produces Mexican foods including quesadillas, burritos, and other handheld items, as well as sauces. The second facility in Karsten is a new, tortilla manufacturing facility.
“We have seen tremendous growth in the Tattooed Chef brand and these two facilities will allow us to diversify our product lines and significantly increase our manufacturing capabilities to capitalize on the $20 billion Hispanic/Southwest Food sector and beyond,” said Sam Galletti, President and CEO of Tattooed Chef.
The transactions are expected to close in early May.
Also, the company has updated its full-year revenue to be in the range of $235 million to $242 million. This compares with the average estimate of analysts polled by Thomson Reuters at $224 million.
TTCF, currently at $17.96, has been trading in the range of $10.33- $28.64 in the past one year.
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