NxGen Brands Inc. (OTC:NXGB) Stock Takes a Hit: Here is Why

On Thursday, shareholders in NxGen Brands Inc. (OTC:NXGB) may have been excited in light of the announcement made by the company. The company announced on December 21 that its acquisition target had managed to conclude a licensing deal with a nutritional supplement distributor based out of Australia.

The Australian distributor would license the products from NxGen Brands’ acquisition target and distribute the products for sale to retail entities throughout the dynamic markets in New Zealand and Australia. Consequently, such a deal would also help NxGen Brands earn considerable royalties through the course of 2024 and beyond.

As per market research conducted by IBISWorld, the nutrition and supplements market in Australia commanded a valuation of more than $1.6 billion in 2022, and the projected year-on-year growth for much of the following decade had been pegged at 2%. That would be an improvement on the 1.5% year-on-year growth that had been witnessed from 2017 through 2022.

It was also noted that the vitamin and supplement industry market size had been growing at a faster rate than the entirety of the Australian economy. In light of the latest development, NxGen Brands stated that once the acquisition was concluded in the coming ten to fourteen days, an extra C$125000 would be added to the company’s top line in each quarter.

The boost to the top line would come from merely licensing its products into the Australian market. The Chief Executive Officer of NxGen Brands, Joseph Lawanson, noted that the Australian market for nutrition and supplements had been growing in light of the fact that the population had continued to age. More and more people in the country had become worried about their fitness levels and had started exercising. Fitness had become a lifestyle choice in the country, and NxGen Brands could cash in on the trend.