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GreenSpace to acquire The Cold Press Corp

Published 21 August 2017

GreenSpace Brands has signed a share purchase agreement to acquire all the outstanding shares of The Cold Press Corp (CEDAR).

The Cold Press Corp. owns the CEDAR brand and sells a wide variety of premium cold pressed juice based products and probiotic enriched juices throughout Canada. The CEDAR brand is on a mission to provide unique flavor combinations as well as probiotic enriched juices that deliver premium superfood nutrition.

Overview of the Acquisition

CEDAR is a leader in the Canadian cold pressed and high pressure pasteurized (HPP) juice category. CEDAR markets and distributes a variety of cold pressed juices through major consumer retail channels in Canada. Over the trailing three months ended July 31, 2017, CEDAR has earned gross revenue of approximately $1.25 million, representing year-over-year growth of 200%.

Within the current fiscal year CEDAR has been profitable and the Acquisition is expected to be accretive to the EBITDA of the consolidated GreenSpace business. In accordance with the Agreement, GreenSpace has agreed to purchase CEDAR for total consideration of approximately $5.385 million to $6.385 million, comprised of $4.113 million in cash, $1.029 million in Common Shares, each Common Share issued at a price of $1.48 subject to TSX Venture Exchange approval, $243,000 in unsecured vendor take-back loans, payable monthly over 12 months and an earn-out that can be up to $1 million based on the CEDAR net revenue in the 12 month period ending on September 30, 2018. 

The earn-out is calculated and payable in Common Shares at a price per share equal to GreenSpace's 20-day volume weighted average trading price for a period ending five days before September 30, 2018. The earn-out amount is based on a formula providing for $20,000 of earn-out consideration for each $100,000 in CEDAR net revenue in excess of $5.142 million for the 12-month period ending on September 30, 2018.  Closing of the Acquisition is subject to a number of closing conditions, including consent from the Corporation's lender.

"This acquisition highlights our strategy and ability to add innovative brands to our platform that can then have their growth amplified through synergistic opportunities within our current team" says Matthew von Teichman, CEO of GreenSpace. "CEDAR is leading the emerging cold pressed juice category by stripping away the complexities of superfood nutrition and providing consumers with access to products that are simple, without sacrificing quality. 

Recent product expansion into hydration and probiotic focused juice products highlight the alignment with the GSB pursuit of the 'gut health' category, which we feel is increasingly important to Canadians.  We believe our team will be able to take this successful brand and further its development with additional expertise across sales, marketing and operations."

Select highlights of the Acquisition are follows:

CEDAR is a leader in the Canadian cold pressed and high pressure pasteurized (HPP) juice category and has established strong relationships and brand presence with key Canadian grocery retailers;

expected to further strengthen GreenSpace's relationships with major retail partners, offering opportunities for increased penetration of respective product lines into previously under-indexed channels;

near term opportunities for growth are available through continued product innovation and expansion into adjacent categories;

expected to be accretive to GreenSpace's earnings that are anticipated to continue to improve EBITDA margins on a go-forward basis; and

CEDAR has a very strong balance sheet and minimal debt outstanding.

The Acquisition is also subject to TSX Venture Exchange approval.

Source: Company Press Release