Unlocking Value Through a Strategic Turnaround
In Q4-24, Eevia Health Plc (publ) (“Eevia” or “the Company”) launched a transformational restructuring plan to become a specialized provider of high-margin, science-backed health solutions, focusing on gut, kidney, and urinary health. By divesting assets related to Retinari™ and berry extract manufacturing, Eevia aims to streamline operations, enhance profitability, and adopt a capital-light business model, leveraging the Company’s expertise in bioactive compounds. This turnaround plan allows investors to retain exposure to former operations without the financial risks of plant extract production. With a clear strategy set by the new and experienced board, Eevia is well-positioned to capitalize on the expanding gut health market and recover to profitable growth, thereby unlocking the underlying value within the Company. Overall, Analyst Group believes the ongoing rights issue presents an attractive entry point for investors at a Pre-Money valuation of SEK 6.0m.
Capital-Light Business Model
With the planned divestments, Eevia will adopt a leaner operational structure, allowing Eevia to focus resources on the Company’s core business, science-backed ingredients. The asset-light model will eliminate direct ownership of production facilities, instead leveraging strategic sourcing and partnerships. This enhances flexibility, reduces capital expenditures, and optimizes cost efficiency, positioning the Company for sustainable, high-margin growth.
Broad Commercial Exposure
Eevia’s turnaround plan enables investors to retain exposure to the former business operations without the financial risk associated with plant extract production. As Eevia shifts toward a higher-margin, science-backed product portfolio, these divestments offer option value, providing additional potential upside if the legacy businesses perform well. This strategic realignment enhances financial flexibility, allowing Eevia to focus more efficiently on the Company’s core growth areas.
Extensive and Growing Market
Medical professionals increasingly acknowledge the pivotal role of gut health in overall well-being. Eevia seeks to address the prevalent issues associated with gut dysbiosis by using high-strength bioactive blends that restore balance. The global gut health market, as estimated by Grand View Research, was valued at approx. USD 51.6bn in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 8.3%, reaching an estimated USD 90.2bn by 2030.
