The Fresh Diet to become public company

Zalmi Duchman founded The Fresh Diet 10 years ago.
Zalmi Duchman founded The Fresh Diet 10 years ago.

The acquirer of The Fresh Diet is spinning off the homegrown national gourmet meal delivery subsidiary into a separate public company.

The Fresh Diet, founded by South Florida entrepreneur Zalmi Duchman, was acquired in August 2014 by publicly traded Innovative Food Holdings in Bonita Springs, Florida, and became a wholly owned subsidiary at that time. The Fresh Diet, which operates out of its North Miami facilities, currently delivers its chef-prepared meals to 44 metropolitan areas across the United States.

Spinning off the company will establish The Fresh Diet’s direct-to-consumer operations as distinct from Innovative Food Holdings’ long-established direct-to-chef specialty food platform, which provides specialty foods, healthcare foods and gluten-free foods to the professional food service market. As part of the transaction announced on Thursday, institutional investors have agreed to provide $1 million in funding directly to The Fresh Diet.

Sam Klepfish, CEO of Innovative Food Holdings, said the spinoff will allow both companies to better focus on their core businesses. The Fresh Diet will become a pure-play direct-to-consumer business, positioning The Fresh Diet to realize the higher valuations typically associated with food-tech and food-delivery public companies and better take advantage of acquisition opportunities. “We believe it provides the best opportunity to maximize shareholder value,” Klepfish said.

Completion of the spinoff is subject to certain regulatory approvals, but Innovative Food Holdings expects there to be a separate listing of The Fresh Diet on a U.S. exchange in the first quarter of 2016. Innovative Food Holdings also plans to retain between 10 percent and 19.9 percent of The Fresh Diet, and expects to distribute 70 percent to 85 percent of The Fresh Diet shares directly to Innovative Food Holdings’ shareholders.

“We believe that operating The Fresh Diet as its own entity will provide greater transparency into operations, and further establish its current position as the leading specialty food platform in the fast-growing direct-to-consumer, fresh-meal category,” said Bryan Janeczko, The Fresh Diet’s CEO. “This will also better position The Fresh Diet to attract additional partners and the capital markets support it requires, as demonstrated by the institutional funding commitment.”

Duchman founded The Fresh Diet in his apartment 10 years ago with $500 he put on his credit card. The then 25-year-old was a pioneer in bringing healthy, portion-controlled meals to people’s doorsteps daily. Today, food-tech is in favor with venture capitalists, who are funneling millions of dollars into the sector. The Fresh Diet will be the first fresh meal delivery company to trade on the public markets, Duchman said.

“The Fresh Diet has a bright future ahead and as its own publicly traded company it will have its own currency to continue making strategic acquisitions in the space,” said Duchman, who advises companies, mentors startups at Venture Hive and was a Miami Herald 20 Under 40 winner last year. “With the consolidation I see coming down the road, I believe The Fresh Diet, as a publicly traded company, will have a big advantage to execute on those opportunities.”

Nancy Dahlberg, 305-376-3595; @ndahlberg