Hispanica International Delights of America Inc. (OTC: HISP) recently announced significant progress in building the foundation for growth in fiscal 2017 and beyond. In addition to securing financing and making its first acquisition, the company added a seasoned executive to its Board of Directors and completed auditing three years of financial statements. These dynamics put the company on solid footing to increase shareholder value over the long-term.
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In this article, we will take a closer look at these milestones and some catalysts that investors should look for over the coming year.
Significant Progress in 2016
Hispanica’s first milestone was securing a $7.5 million credit facility in early-July with TCA Global Credit Master Fund LP. Management established the credit facility to finance its acquisition strategy and organic expansion without diluting existing shareholders. The company also repaid an outstanding note and improved its balance sheet with the funds, which could help set the stage for greater financial flexibility over the coming years.
Less than a month after securing the credit facility, the company acquired Energy Source Distributors Inc. With nearly $3 million in annual revenues, the acquisition provides significant financial leverage and valuable distribution channels into retailers like 7 Eleven, Safeway, Walmart, and more than 2,000 other locations. These distribution channels will form the basis for the launch of ethnic food and beverage brands throughout the United States.
The company also added Dr. Bassam Damaj, PhD, to its Board of Directors in mid-July. Dr. Damaj has tremendous experience in the public markets as the President and CEO of Innovus Pharma Inc. (OTCQB: INNV) and former CEO of Apricus Biosciences Inc. The company will rely on this expertise to help facilitate growth through acquisitions, and to ultimately generate significant shareholder value in the process.
Upcoming Catalysts in 2017
Hispanica has a number of upcoming catalysts that investors should watch for moving into next year and beyond. In addition to growing revenue through a combination of organic and M&A fueled growth, the company plans to achieve a positive cash flow and execute on its overarching vision to become a leading developer and distributor of ethnic foods in the United States – an industry that is expected to surpass $12 billion in revenue by 2018.
“Our strategy for fiscal 2017 is to grow our existing operations, expand our proprietary portfolio of products, and to move forward with our next strategic acquisition that will continue to expand our top line revenue growth,” said CEO Oswaldo Leonzo in a corporate update.
Investors can expect to see the impact of the ESD acquisition in upcoming SEC filings, which could provide greater visibility into financial conditions and future potential. With the distribution platform in place, future acquisition of products and brands could become increasingly accretive in nature since distribution could be immediately expanded to bolster revenue beyond the acquisition target’s existing revenue.
Hispanica International Delights of America Inc. represents a compelling opportunity in the food and beverage industry. Latin Americans account for about 17.3% of the U.S. population, or roughly 55.3 million people, according to Pew Research Center. With over $1.2 trillion in buying power, the demographic represents a lucrative opportunity for the company to launch new brands that effectively target the segment.
With a market capitalization of just $10 million and a $7.5 million credit facility in place, the company has the funding to make acquisitions and grow its market capitalization. These acquisitions could also serve as catalysts for investors as they occur and position the company itself as a potential acquisition target for larger companies in the space.
For more information, visit www.sec.gov to view the company’s public filings.