On February 13thth, Eevia Health Plc (publ) (“Eevia”) announced that the Company has initiated a EUR 2.6m sales transaction with Baccas Salus Oy, for equipment, products, and berry extract manufacturing IP. The transaction price exceeds the book value of the assets with EUR 1.5m, and the deal awaits approvals and payment from Baccas Salus Oy.
Analyst Group’s View of the Transaction
Eevia continues to make progress in line with the Company’s communicated restructuring plan, aiming to streamline operations, enhance profitability, and transition to a capital-light business model. The announced price of EUR 2.6m results in a gain on the sale of fixed assets amounting to EUR 1.5m, strengthening the Company’s balance sheet and improving the P&L through lower operating expenses and reduced CAPEX.
While the successful completion of the divestment remains contingent on Baccas Salus securing the necessary funding, the initiated transaction sends a strong signal regarding the underlying value embedded in the Company. Considering the EUR 2.6m transaction for berry extract-related assets, along with the previously announced EUR 800k divestment of IP related to the leading eye-health compound Retinari™, the current Pre-Money valuation of SEK 6.0m in connection with the rights issue presents an attractive Risk/Reward opportunity, according to Analyst Group.
About the Transaction
Eevia has agreed to sell equipment, machines, and products to a Finnish start-up, Baccas Salus Oy, for EUR 2.6m, equivalent to approx. SEK 29.3m. The book value of these assets was EUR 1.1m at the end of Q4-24, thereby yielding an EUR 1.5m gain on the transaction of fixed assets. The sale is subject to creditor and board approvals, as well as payments, which include cash and a seller’s credit convertible into Baccas Salus shares. The shares in Baccas Salus is planned to be distributed to Eevia Health’s shareholders as a tax-free dividend, subject to pre-approval from Finnish Tax authorities.
Ownership and possession will remain with Eevia until all approvals are secured and payment obligations are met. Baccas Salus must also finalize financing transactions, and failure to do so could nullify the agreement. Upon completion, Eevia will lease back the equipment, continuing berry extract production at the Company’s facility until Baccas Salus’ greenfield site becomes operational and assumes production.
Baccas Salus aims to develop an automated, energy- and material-efficient berry processing facility near key harvest areas, with potential innovations in procurement and harvesting processes. Eevia will continue selling products from this facility, maintaining a strategic partnership. The transaction is expected to streamline Eevia’s operations, strengthen the Company’s balance sheet, and reduce costs, CAPEX, and depreciation, aligning with Eevia’s transformational restructuring plan.
In summary, the initiated divestment marks a significant milestone in the Company’s ongoing restructuring efforts, highlighting the underlying value that the Company’s transformational strategy seeks to realize. Going forward, Baccas Salus’ ability to secure the required funding will be a key aspect to monitor, as a successful financing outcome could unlock significant untapped potential.
How Analyst Group views Eevia Health as an investment
In Q4-24, Eevia 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.
