Sydney-based frozen meal delivery service Muscle Meals Direct has regained its strength after it entered voluntary administration earlier in the year, following an internal dispute among its directors.
The company fought to keep trading every day through the administration process, as the founders of the company vied for sale of the business.
Jochen Bonitz, an investment banker with corporate advisory firm Bonitz Advisory, tells SmartCompany he had helped Paul Epsimos, one of the company’s three founders, in an advisory role leading up to the administration.
When the company’s assets were sold through by the administrator, Bonitz and Epsimos formed a 50/50 partnership and purchased the company on July 2.
They beat out the business’ two other founders with their offer.
The two paid between $100,000-$200,000 for the business, which manufactures and distributes high-protein, calorie-controlled frozen meals to gyms and supplement stores across Australia.
“We paid some serious money, it wasn’t cheap,” says Bonitz.
Administrators had previously told SmartCompany the company had a turnover of about $100,000 a week or around $5 million per annum.
Bonitz says he fought hard to make sure the company didn’t miss a day of trade throughout the process, which made the administration process complex.
Bonitz, who was friends with Epsimos before the joint venture and whose wife is the company’s director, says the company was a going concern when they purchased it and all of its related assets.
“The company went into administration because there was a difference of opinion between directors, in terms of how it should operate and its strategic focus,” says Bonitz.
“It wasn’t so much an insolvency, but it was under financial stress because of that.”
With his background in acquisitions, Bonitz says he and Epsimos presented the best acquisition strategy for the company and while the other founders were disappointed to miss out the sale, there was no bad blood.
“They are not super happy… but there are just moving on in general,” he says.
Hall Chadwick administrator Steven Arthur Gladman, who was appointed as administrator to Muscle Meals Direct in May, previously told SmartCompany the company’s major creditor was the Australian Tax Office, to which it owed $270,000.
Bonitz would not comment on the ATO because he said it was a matter for the administrators, but says the new company does not have any incumbencies.
He also says most debts with suppliers have been honoured because they wanted to have good relationships going forward.
The new company offered all operational staff their jobs with the new business.
Bonitz says the reason why he wanted to purchase the company was because he had seen it perform successfully in the marketplace, up to point of administration.
“The potential was beyond doubt,” he says.
He said the meals were extremely well received by customers, the team at the company was strong and the food industry was in an upswing, which made the business a good investment.
Moving forward, Bonitz says the company plans to redesign its website, which he admits is complicated for users, and will soon look at other potential retail verticals, including weight loss and sporting options.
Bonitz says the company has already made a profit in its first month trading as a new entity.
“Sometimes you look at the problems and you play devil’s advocate… I think problems can be a benefit sometimes,” he says.
*Updated 26 August 2014: The previous CEO of Muscle Meals Direct, Tina Schembri, has told SmartCompany the Bonitz/ Epsimos partnership did not out-bid the other directors, as neither put in a bid for the business. She also says the pair actually paid in excess of $270,000.
Schembri says Bonitz was incorrect in saying there were three founders of the company, when there were actually only two.
Schembri contests the business fought through the administration process, saying the company was trending upwards before administration.
She also says the business was trading insolvent “due to Paul Epsimos’ inability to agree to invest in the basics of the business” and the directors chose not to submit a bid after “careful consideration and on balance with the damage that Paul Epsimos had done to the brand”.