Shares of Neptune Wellness Solutions (NEPT 0.71%) climbed 20.7% on Wednesday after the health-focused company announced that it purchased a controlling interest in Sprout Foods.
Sprout Foods is a leading provider of organic plant-based baby food and toddler snacks, with $28 million in annual sales. It's also a top-selling brand on Amazon's online marketplace.
Sprout CEO Capp Culver said in a press release: "Sprout was an early innovator in the organic baby food market, driving category expansion and creating optionality for parents who wanted to feed their children tasty, organic foods. Combining with Neptune's health and wellness platform will greatly elevate Sprout's efforts to make innovative, organic products accessible for today's healthy families."
Neptune purchased a 50.1% stake in Sprout from Morgan Stanley Investment Management for $6 million in cash and $12 million in stock. Neptune will also guarantee $10 million of Sprout's debt.
"Sprout fits perfectly into Neptune's existing portfolio of innovative and disruptive health and wellness brands," Neptune CEO Michael Cammarata said.
Neptune said Sprout will help to accelerate its "transformation into a disruptive consumer packaged goods company" and heighten its focus on the fast-growing plant-based food market.
Investors will be able to check in on Neptune's progress in these areas when it reports its third-quarter financial results on Feb. 15.