SMTrack inks MoU on acquiring Tutti Fruiti, O'My Buns! master licensor

KUALA LUMPUR: Loss-making, ACE Market-listed SMTrack Bhd has signed a memorandum of understanding with Wellspring Worldwide Ltd (WWL) to exclusively discuss the acquisition of the master licensor of Tutti Fruiti Frozen Yogurt and bakery line O'My Buns! for the next six months, a move which could lead to a reverse takeover.
Wellspring Group is the US-based global master licensor of the two brands, which has 506 Tutti Frutti distributors and 28 O'My Buns! distributors worldwide. Both brands are present in 43 countries and in close to 700 outlets globally, with 60% of its market in the US and the remaining 40% in Europe and Asia.
SMTrack executive chairman Mohd Anuar Mohd Hanadzlah said during the six months, SMTrack will work out a proposal to purchase 100% of Wellspring Group by issuance of new SMTrack shares to existing shareholders of WWL based on a valuation to be agreed.
WWL was incorporated on April 28, 2016 in Labuan for financial and tax management reasons and was set up as the ultimate holding company and to consolidate the ownership of its operating subsidiaries. Shareholders of WWL include Lembaga Tabung Haji and Koperasi Belia Islam Malaysia.

Wellspring executive director Datuk Ridzuan Nor said the six months will also be used to explore collaboration with SMTrack and, from there, look at potentially merging the two organisations, hopefully in this year.
Ridzuan is the son of former second finance minister Tan Sri Nor Mohammed Yakcop and Anuar is the brother of former second finance minister Datuk Seri Ahmad Husni Mohamad Hanadzlah.
Ridzuan said it wants to use Malaysia as a hub to cater for the Asian market, while its US headquarters will cater for the US and Europe markets. It plans to set up a manufacturing and distribution centre in Malaysia to mitigate currency foreign exchange and logistics issues.
"Setting up a master distribution centre in Malaysia will resolve the forex risks faced by our licensees. All our manufacturing and distribution is out of LA (Los Angeles) and the time has come for us to focus on expansion in Asia, China, India and Indonesia and to use Malaysia as a hub for distribution and expansion for Asia," Ridzuan said.
He added that for the next five years, China and India is expected to be its biggest markets together with Pakistan, Malaysia, Indonesia, Australia, New Zealand.
Anuar said SMTrack, a track and trace solutions provider, can complement Tutti Frutti by providing solutions for e-wallet and inventory.
The origins of the Wellspring Group can be traced back to the incorporation of Wellspring Industry, Inc in California on July 1, 2007. The company started its business by distributing soft serve equipment restaurant supplies and non-proprietary yogurt powders under the brand YoFlavor.