BevCanna to Acquire Established Beverage Company, Naturo Group, With Over $35M in Assets
Emerging leader in infused cannabis beverages, BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) (“BevCanna” or the “Company”) announced today that it has signed a letter of intent (the “LOI”) dated November 24, 2020 with Naturo Group Investments Inc. (“Naturo” or the “Target”), a privately held company, pursuant to which the Company proposes to purchase all of the issued and outstanding securities of the Target (the “Target Securities”) from the owners of the Target (the “Transaction”). Upon completion of the Transaction, Naturo will become a wholly-owned subsidiary of the Company 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.