Free-from specialist Tooru has terminated its £12m acquisition of countertop plant milk machine maker Mylky.
AIM-listed Tooru had agreed to buy 100% of Mylky’s shares for £6m in cash and £6m in debt and Tooru equity. But this morning the AIM-listed company said “now was not the right time” to take on more debt.
“The acquisition structure included a significant level of new debt,” Tooru said.
“Whilst the enlarged group would have had the appropriate level of cashflow to support this debt, given the difficult market conditions currently prevailing, overlaid with significant geopolitical risk, the board believes that now is not the right time to take on more debt and increase the Group’s leverage.”
Making up the full £6m in equity would have been “too dilutive”, the company added.
Mylky’s acquisition would also have exposed Tooru to the risk of changes in European legislation, given its presence in Germany, France and Switzerland.
“Whilst we believe Mylky is an excellent business, current market conditions lead us to believe that now is not quite the right time to take on such a large European business that would have required a significant amount of additional gearing,” said Tooru CEO Scott Livingston.
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