Tooru (LSE:TOO.L) terminated its proposed acquisition of Mylky B.V, deciding not to progress the deal after reassessing funding, timing and regulatory exposure.
The AIM‑listed branded health and wellness group said the acquisition structure depended on substantial new debt, that equity would have been too dilutive at current valuation levels, and that difficult market and geopolitical conditions increased the risk of higher leverage.
"Whilst we believe that Mylky is an excellent business, current market conditions lead us to believe that now is not the right time to take on such a large European business," Scott Livingston, CEO, said.
The company said the time required to place a debt facility was running beyond the vendor's expectations and that arranging alternative equity funding would have materially diluted existing shareholders.
Further due diligence highlighted potential exposure to European legislation affecting a major part of the enlarged business which the board judged exceeded Tooru's primarily UK‑focused expertise.
The board said it will focus on low‑risk growth within the Group's existing businesses while continuing to pursue more directly aligned acquisition opportunities.
