BevCanna Enterprises Inc (CSE:BEV) (OTCMKTS:BVNNF) (FRA:7BC) has signed a letter of intent to acquire Naturo Group Investments Inc, a privately held beverage company, in an all-stock deal worth C$6.5 million.
BevCanna and Naturo have operated for the past three years under an exclusive partnership, including a master license agreement that gave BevCanna exclusive access to Naturo’s 40,000-square-foot state beverage manufacturing facility and alkaline spring water source.
The proposed combination will create a fully licensed white-label beverage manufacturing and distribution company with a global multichannel distribution network of traditional retail and cannabis sales, the company said. BevCanna will take ownership of the beverage facility and water source, as well as 315-acres of cultivable land valued at C$10.4 million and beverage manufacturing equipment worth C$3.4 million.
BevCanna will also own the Naturo flagship brand, TRACE, a fulvic and humic mineral water beverage sold in more than 3,000 Canadian retail stores. Looking ahead, TRACE is expanding its product selection to nutraceuticals and is incorporating additional herbal remedies, including cannabinoids, adaptogens, and nootropics in domestic and international markets.
Functionally, BevCanna will purchase all issued and outstanding shares of Naturo in exchange for roughly 50 million common shares at C$0.40 per share. The parties have agreed to negotiate and execute a definitive agreement by January 22. The agreement would also eliminate future payment liabilities under BevCanna’s current lease agreement, royalty agreement, and manufacturing agreements with Naturo.
“We believe that the joining together of these two companies will be an unbeatable combination,” BevCanna CEO and Naturo founder Marcello Leone said in a statement. “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.”
The company believes the deal will help BevCanna expand in Canada.
“BevCanna has taken great strides in the past few years and in addition to its commercialized US products, is now on the brink of commercialization across the Canadian market,” BevCanna Chief Strategic Officer John Campbell said. “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.”
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