Guardion Health Sciences, Inc. (NASDAQ: GHSI) shares are experiencing a notable surge today, marking a 50.75% increase to reach $8.05 as of the last check. This upward movement in Guardion’s stock price follows a recent agreement pertaining to the divestiture of its subsidiary.
In an official announcement, Guardion (GHSI) disclosed the execution of an equity purchase agreement with Doctor’s Best Inc, a wholly-owned subsidiary of Kingdomway USA Corp. The agreement revolves around the sale of Guardion’s subsidiary, Activ Nutritional, LLC, which holds ownership of the Viactiv brand and business.
The agreed-upon transaction involves the sale of the subsidiary for a gross cash consideration totaling $17.2 million, payable in full upon closing. The respective boards of directors of Doctor’s Best and Guardion have approved this transaction. It is still subject to the usual closing requirements, though, which include the approval of the deal by the company’s shareholders at a future Special Meeting of Stockholders.
It is expected that the deal will be completed by June 30, 2024, the end of the quarter, if the GHSI investors approve it. Guardion had previously communicated its strategic exploration of various transaction options for over a year, responding to market conditions and economic dynamics.
This decision was aimed at providing increased value to GHSI stockholders, potentially through the sale of the Company and/or its Viactiv brand and business. To facilitate this process, Guardion enlisted the expertise of Alantra, LLC, an internationally renowned healthcare investment banking firm, as its exclusive financial advisor.
The current transaction is the culmination of an extensive review process led by Alantra. Viactiv, the brand and business owned by Guardion, has exhibited strong performance, boasting a year-on-year topline revenue growth of 13% for the nine months ending September 30, 2023.
This transaction aligns with Doctor’s Best commitment to invest in strategically aligned opportunities, fostering manufacturing and marketing synergies. Leveraging the strength and performance of the Viactiv brand, Doctor’s Best aims to expand its global presence and offer a diversified range of high-quality products.