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Gummy supplement manufacturer TopGum Industries has completed the acquisition of the US-based gummy manufacturing operations of PL Developments in a transaction valued at up to $35 million.

The deal gives TopGum its first US-based production platform and expands its manufacturing network across Israel, Canada and the United States. The acquired facility is built to FDA pharmaceutical standards and is capable of producing both dietary supplement and pharmaceutical gummy products.

Alongside the acquisition, the two companies have established a long-term commercial partnership under which PL Developments will commercialise and distribute TopGum-manufactured gummy products to major US retailers under private-label and store-brand programmes.

TopGum said the acquisition aligns with two major trends reshaping the consumer health and nutraceutical sectors: rising demand for enjoyable dosage formats such as gummies and increased retailer interest in domestically manufactured products.

The company believes pharmaceutical gummies could follow the same growth trajectory seen in the vitamin, mineral and supplement (VMS) market over the past decade and a half, during which gummies evolved into one of the dominant delivery formats.

Eyal Shohat, CEO of TopGum, said: “This is a strategic transaction that gives TopGum a unique foothold in the emerging pharmaceutical gummy market."

PL Development's president Evan Singer agreed, saying in a statement that gummies are becoming an increasingly important platform across both supplements and pharmaceuticals, driven by consumer demand for more convenient and palatable formats.

TopGum said the acquisition provides substantial production expansion potential, with existing infrastructure capable of supporting more than double current output through additional production lines without significant new capital investment.

The partnership also gives TopGum enhanced access to leading US retail chains through PL Developments’ established private-label relationships and packaging operations.

According to the companies, several dietary supplement and pharmaceutical gummy products are already nearing commercial launch. The acquired business is also advancing products through the FDA OTC monograph framework and the FDA’s 505(b)(2) regulatory pathway, which allows approval of new dosage forms for existing drugs and can provide up to three years of market exclusivity.

Some pharmaceutical gummy products are expected to launch in 2027 and 2028 under partner brands, with TopGum acting as the exclusive manufacturer.

The transaction consideration includes $10 million in cash at closing, approximately $8 million in TopGum shares issued at closing and up to an additional $17 million in contingent share-based consideration tied to commercial and regulatory milestones.

If all milestones are achieved, PL Developments is expected to hold approximately 4% of TopGum’s equity on a fully diluted basis.

TopGum expects 2026 to serve as an integration year for the acquired US operations. The company forecast low single-digit million-dollar revenue contributions from the business this year, alongside a temporary EBITDA loss of approximately $2 million to $3 million as integration progresses.

The acquisition follows a period of rapid expansion for TopGum, including the completion of its Canadian acquisition of Island Abbey in early 2025 and the launch of a new manufacturing facility in Sderot, Israel, later that year.

Founded in 2004, TopGum manufactures gummy-format dietary supplements for global markets and employs more than 400 people worldwide.