EarthRenew Inc (CSE: ERTH) this morning announced that it has renegotiated the acquisition of Replenish Nutrients Inc. Originally set to take a 38% stake in the company, after further discussions the firm has entered into a new non-binding letter of intent to acquire a 100% stake in the regenerative fertilize and nutrient company.
Based in Okotoks, Alberta, Replenish develops innovative soil health products and offers a range of solutions for regenerative and conventional soil conditions. The firm currently has established product lines that are sold across Western Canada and the United States, with the firm guiding to revenues of $9.9 million from July 2020 through to June 2021.
Upon completion of the acquisition, it is expected that the Replenish team will support marketing, distribution and the sale of EarthRenew’s product line within the regenerative agriculture space. The acquisition in turn will make EarthRenew a leader within the regenerative and organic fertilize space.
Notably, Replenish booked revenues of $5.1 million from July 2020 through to January 2021. The company has forecasted additional sales of $4.8 million for the remainder of the fiscal year through to June 2021, resulting in total revenues of $9.9 million for the subsidiary. The acquisition as a result is expected to contribute to significant topline revenue growth for the company, while also providing an existing customer list and distribution channels for product sales.
“If consummated, acquiring full ownership is anticipated to allow us to not only add top line revenue and accelerate phase two of our construction plans, but also to invest in the growth of Replenish Nutrient’s manufacturing capacity to address a supply gap for their product. We look forward to the potential to work with the entire Replenish Nutrients team to accelerate growth of the new combined entity, leveraging their experience in the fertilizer and soil solution space.”Keith Driver, CEO of EarthRenew
The proposed acquisition is currently slated to close in March 2021.
EarthRenew last traded at $0.54 on the CSE.
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