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The acquisition will form a unique vertical in the plant-based mineral and cannabis beverage sectors
Canada based BevCanna Enterprises announced that it has signed a letter of intent dated November 24, 2020 with Naturo Group Investments, a privately held company, pursuant to which the Company proposes to purchase all of the issued and outstanding securities of the Target from the owners of the Target. Upon completion of the transaction, Naturo will become a wholly-owned subsidiary of BevCanna and the company will carry on the combined business of Naturo and the company.
BevCanna and Naturo have operated for the past three years under an exclusive partnership, including a master license agreement by which BevCanna has exclusive access to Naturo’s 40,000 sq. ft. state of the art beverage manufacturing facility, pristine on-site alkaline spring water source, 315-acres of land for outdoor cultivation purposes and proprietary Health Canada approved fulvic and humic plant-based mineral formulation. As per Naturo’s latest independent estimate pricing report as of February 2020, Naturo’s enterprise value is between C$38M-C$42M.
The proposed combination will create a unique fully licensed white-label beverage manufacturing and distribution company, with a global multi-channel distribution network of traditional retail and cannabis sales channels. BevCanna will take ownership of the 40,000 sq. ft. beverage facility, and 315-acres of cultivatable land valued at $10.4M, and beverage manufacturing equipment which is valued $3.4M as of year end, and exclusive onsite alkaline spring water source independently valued at $18M. BevCanna will also own the Naturo flagship brand, TRACE, which currently enjoys a leadership position within the Canadian fulvic/humic category and is sold in more than 3,000 Canadian retail stores, with select international agreements and partnerships under review.
Along with their nationally distributed alkaline and sparkling waters, TRACE is expanding its product selection to nutraceuticals and is incorporating additional nutraeceuticals and herbal remedies, including cannabinoids, adaptogens, and nootropics, in domestic and international markets.
For BevCanna, the agreement will eliminate future payment liabilities under BevCanna’s current lease agreement, royalty agreement and manufacturing agreements with Naturo. These eliminated agreements and fees will preserve future working capital and allow BevCanna to direct more resources towards its operations and shareholder value. The proposed company will combine the decades of consumer packaged goods (“CPG”), capital markets, corporate strategy and public company expertise of both operational teams.
“We believe that the joining together of these two companies will be an unbeatable combination,” said Marcello Leone, Founder of Naturo and CEO of BevCanna. “Creating innovative beverages that consumers will love, whether mineral or cannabis-based, wellness-focused or recreational, continues to be our passion. Now we’re at a stage where a business combination will position us to provide incredible value for both organizations and bring two exceptionally experienced teams together, creating one of the largest CPG, cannabis beverage and natural products players in the industry.”
“BevCanna has taken great strides in the past few years and in addition to its commercialized U.S. products, is now on the brink of commercialization across the Canadian market,” said John Campbell, Chief Strategic Officer at BevCanna. “Our exclusive partnership with Naturo has been instrumental in our success and it’s now time to formalize the relationship and bring together the strengths of both companies.”