- EarthRenew has entered into an agreement to purchase all issued and outstanding securities of Replenish Nutrients Ltd.
- Replenish Nutrients is a privately-held regenerative fertilizer company
- The company agreed to pay to the security holders of Replenish approximately $9 million, payable in cash and EarthRenew shares
- Certain vendors will become entitled to earn-out payments totalling an aggregate of up to an additional $9 million
- EarthRenew transforms livestock waste into a high-performance organic fertilizer
- EarthRenew Inc. (ERTH) opened trading at C$0.31 per share
EarthRenew Inc. (ERTH) has entered into a share purchase agreement to acquire all issued and outstanding securities of Replenish Nutrients Ltd.
Replenish Nutrients is a privately-held regenerative fertilizer company located in Okotoks, Alberta.
If completed, the acquisition will provide EarthRenew with significant top-line revenue through sales of existing regenerative fertilizer and soil health solutions across Western Canada.
Key Highlights:
- The company agreed to pay to the security holders of Replenish approximately $9 million, payable as $1.41 million in cash and 21,264,096 common shares of EarthRenew at a deemed price of $0.248 per share.
- Following completion of the acquisition, EarthRenew has agreed to pay to certain vendors:
- ongoing earn-out payments totalling an aggregate of up to $7 million based on qualifying gross annual revenue of Replenish multiplied by an earn-out factor for each of its 12-month fiscal periods ending June 30, 2025 payable by a combination of cash payments and the issuance of EarthRenew Shares, provided such Vendors continue to be bound by consulting or employment agreements entered into with the Company; and
- supplemental earn-out payments of an aggregate amount of up to $2 million based on certain sales parameters, which shall be payable by a combination of cash payments and the issuance of EarthRenew Shares and evidenced by promissory notes issuable to such Vendors on the date of Closing.
- The conditions are expected to be completed no later than May 14, 2021.
Keith Driver, EarthRenew’s President and CEO, commented,
“I am extremely pleased to announce the signing of the definitive agreement in connection with our much-anticipated acquisition of Replenish, and we are looking forward to completing the remaining legal formalities to close the transaction. Once the acquisition has completed, we intend to leverage the inherent strengths of the two teams and to build on the success each of our companies has experienced. We are confident that, upon completion, our new, combined entity will not only drive shareholder value, but also position us at the important intersection of upcycling nutrient waste streams and providing regenerative crop inputs.”
Driver continued,
“The appetite for Replenish’s soil health solutions has been remarkable as evidenced by the success of their formulation and sales efforts. We are excited to begin applying our financial horsepower to this model to help extend Replenish’s market reach and broaden our joint product offerings by incorporating alternative nutrient waste streams into new crop input products.”
Share Purchase Agreement
EarthRenew has entered into a share purchase agreement effective as of May 1, 2021, with Replenish and each of the vendors.
The purchase price for the acquisition will be approximately $9 million and shall be payable by a combination of cash payments and the issuance of EarthRenew shares. In addition, the company will also satisfy certain of Replenish’s obligations in connection with its outstanding shareholder loans, payable by a combination of cash payments and the issuance of EarthRenew shares. Certain vendors will become entitled to earn-out payments totalling an aggregate of up to an additional $9 million payable by a combination of cash payments and the issuance of EarthRenew Shares.
In addition, the vendors shall be entitled to nominate three individuals for election to EarthRenew’s board of directors at its annual general meeting held each year, but only for so long as the vendors collectively hold at least 10% of the issued and outstanding EarthRenew shares.
EarthRenew is not paying any finder’s fees in connection with the acquisition. The closing of the acquisition is subject to the satisfaction of customary conditions, including the approval of the CSE.
EarthRenew transforms livestock waste into a high-performance organic fertilizer to be used by organic and traditional growers in Canada and the United States.
EarthRenew Inc. (ERTH) opened trading at C$0.31 per share.
