EarthRenew Inc (CSE: ERTH) has signed definitive documentation to wholly acquire Replenish Nutrients, an Alberta-based regenerative fertilizer firm. The arrangement follows an initial LOI to acquire a 38% stake in the firm, which then shortly thereafter grew to 100%.
Replenish Nutrients is focused on developing innovative soil health products to offer a range of solutions focused on improving regenerative and conventional soil conditions. The transaction is expected to add significant topline revenue to the company, with Replenish already having an existing customer base and distribution channel that will further benefit EarthRenew’s product portfolio.
Guidance provided by the company upon the initial announcement of the Replenish acquisition indicated that the company expects to generate upwards of $9.9 million in revenues from July 2020 through to June 2021.
“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.”
Keith Driver, President & CEO of EarthRenew
Under the terms of the transaction, EarthRenew is to pay a total figure of $9.0 million for the firm in a combination of cash and shares. A total of $1.41 million is to be paid via cash, while the remainder of the purchase is to be satisfied with the issuance of 21.3 million common shares at a price of $0.248 per share. Certain earnouts of up to $9.0 million are also applicable, provided performance targets are met by the company over a period of four years.
EarthRenew last traded at $0.305 on the CSE.
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