THG Plc (LSE:THG) agreed to acquire Brighter Foods Ltd from N Brown Foods Ltd and managers of Brighter Foods Ltd for £43.8 million on April 22, 2021. As per the transaction, the consideration is payable on cash free/debt free basis and N Brown Foods will receive cash proceeds of £35.6 million for the transfer of its 84.334% stake in Brighter Foods Ltd. The total consideration includes £1.2 million of contingent consideration dependent upon performance targets post acquisition. As on March 31, 2021, Brighter Foods Ltd generated £19.8 million in revenues and £3.7 million adjusted EBITDA.

The transaction is subject to approval from shareholders of Real Good Food plc, parent of N Brown Foods. The transaction is unanimously recommended by the board of Real Good Food. As of May 10, 2021, shareholders of Real Good Food has approved the transaction.

The transaction is expected to complete on or around May 11, 2021. Real Good Food will use the sale proceeds of £8.5 million to pay Napier Brown Retirement Plan,  £23.1 million to the Loan Note Holders and £3.0 million of net proceeds will be retained to provide working capital to support the financing needs of Renshaw and Rainbow Dust Colours. The acquisition is not expected to be material to the Group's near-term financial performance, and therefore guidance remains unchanged for FY 2021.

Spayne Lindsay & Co. LLP and Carl Holmes and James Thompson of FinnCap Ltd acted as financial advisors to Real Good Food plc.