Hf Foods Group Inc (HFFG) News & EventsHFFGHf Foods Group Inc

HF Foods Reports Q2 Revenue of $323.78M, Acquires Searay Foods

Reports Q2 revenue $323.78M, consensus $320.54M. "Our second quarter results reflect continued momentum in a challenging operating environment, marking our sixth consecutive quarter of year-over-year net revenue growth and the highest quarterly revenue in our history," said Felix Lin, President and Chief Executive Officer of HF Foods. "Most significantly, we took a major step in our long-term growth strategy with our agreement to acquire Searay Foods, a leading Canadian importer and distributor of ethnic and specialty seafood. This transaction marks our first expansion outside the United States and extends our proven M&A playbook into a new geography, bringing a margin-accretive business with six proprietary brands into our growing seafood category. M&A remains a core pillar of our growth strategy, and as the strategic acquirer of choice in our space, we will continue to selectively evaluate opportunities that could benefit from our operational expertise and scale. At the same time, with the foundation of our transformation program largely built, we are hyper-focused on executing against the significant organic growth opportunities ahead, including our continued cross-selling initiatives across the Southeast and Midwest. We remain confident in our long-term strategy and our ability to create sustained value for our shareholders as we enhance our position as the leading nationwide Asian specialty food distributor."

Alliance Global Raises HF Foods Group Price Target to $5

Alliance Global analyst Aaron Grey noted that HF Foods Group agreement to acquire Searay Foods represents the company's first meaningful acquisition since 2022, with the company choosing geographic breadth versus depth as this represents the company's first expansion internationally. The firm told investors that it expects HF Foods Group to benefit from Searay's diversified frozen seafood product selection by leveraging Searay's procurement network/supply chain that allows for higher margin products with Searay's greater focus on grocery also providing a complementary strength to the company's focus on restaurants. Alliance Global maintained a Buy rating and $5 price target on shares of HF Foods Group.

HF Foods Acquires Searay Foods for Approximately C$47.9M

HF Foods Group announced that it has entered into a definitive agreement to acquire Searay Foods and its related entities. The transaction represents HF Foods' first expansion outside the United States and is expected to close in Q3, subject to customary closing conditions and regulatory approvals. Under the terms of the agreement, HF Foods will acquire up to 100% of the outstanding equity interests of Searay for total consideration of approximately C$47.9M, representing approximately 5.0x Searay's 2025 adjusted EBITDA of approximately C$9.6M. Consideration will be funded through a combination of cash on hand and shares of HF Foods common stock, with final terms to be disclosed upon closing. The consideration is expected to be funded through a combination of cash on hand and newly issued shares of HF Foods common stock; the final split between cash and stock consideration will be disclosed at closing. Following the closing of the transaction, Searay's existing management team, led by incoming CEO Derick Ngan, is expected to continue to lead Searay's day-to-day operations as a subsidiary of HF Foods. The transaction is expected to close in Q3, subject to customary closing conditions, including regulatory approvals.