Tekcapital (TEK ), an intellectual property investment group, announced that supermarket chain Giant Food of Maryland has agreed to partner with MicroSalt to provide low-sodium solutions for its customers. Giant has also agreed to carry MicroSalt's new salt shakers in its stores.
MicroSalt is the developer and manufacturer of a proprietary low-sodium salt. Using a patented process of producing salt crystals, MicroSalt claims to achieve the same teste as regular table salt at half the sodium content. Tekcapital owns 97.2% of MicroSalt and 73% of its US subsidiary.
Rick Guiney, CEO of MicroSalt commented: "We are extremely excited that Giant has joined with us to provide low sodium solutions to its customers. This is a tremendous step in our march toward reducing excess sodium consumption. Our MicroSalt shakers empower consumers to salt their food to taste with less sodium."
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It's encouraging to see another large supermarket contract for MicroSalt as it continues its expansion across the US and advances toward an anticipated 2023 IPO. Giant Food is a major supermarket chain in the mid-Atlantic region of the US, with over 160 stores spanning across Delaware, Washington DC, Maryland, and Virginia. In December, MicroSalt signed a similar contract with Hannaford Supermarkets, a major supermarket chain in the Northeastern US, operating 185 stores.
Investors cheered today's announcement pushing TEK shares up 5.6% in early trading. Tekcapital owns 97.2% of MicroSalt and 73% of its US subsidiary by the same name.
MicroSalt has been making headlines with its disruptive salt product that has now been rolled out at scale in the US. It is currently available as a standalone product in major US retail chains, including Giant and Hannaford, as well as in the ready meals market through a partnership with Presty! Foods, and as the key ingredient in MicroSalt's SaltMe! brand of crisps, sold at Kroger in the US.
What distinguishes MicroSalt's product is that it is not a substitute, but actual salt. The company's patented technology produces salt crystals that are 100 times smaller than normal table salt, so they deliver the same intensity of taste at 50% the sodium content. It is a potentially disruptive technology, and the company's aggressive rollout has proven the food industry is interested.
MicroSalt has also received commitments from UNFI, a major North American food wholesaler, for placement in its distribution centers. MicroSalt said it is exploring product line extensions with sea salt and Himalayan salt as well as geographic expansion into the UK, Europe, and Canada in 2023. The company also received its first bulk B2B ingredient order in July. MicroSalt's CEO says interest is "very high" for bulk B2B MicroSalt sales internationally.
According to a recent report published by Coherent Market Insights, the global sodium reduction ingredient market is projected to reach around US$2.2bn by end of 2027, growing at a CAGR of 12.2% between 2020-2027.
TEK is currently readying MicroSalt for IPO on AIM in 2023. Last month MicroSalt announced the appointment of Zeus Capital Limited as its nominated adviser and broker.
The valuation for MicroSalt has been on the rise since FY18 with a most recent recorded book value of US$4.3m in the November 2021 accounts.
Naturally, TEK investors will be looking for a significant uplift in valuation on the public markets, which should provide a boost for TEK shares and possibly a special cash dividend, depending on TEK's ambitions for the rest of its portfolio.
Investors should Tekcapital for further updates on MicroSalt's upcoming IPO.