Consolidation is coming to the plant-based meats sector.
Last night after the closing bell, vegan fast food chain Odd Burger Corp (TSXV: ODD) revealed that it has entered into a non-binding letter of intent to acquire Zoglo’s Food Corp (CSE: ZOG), a plant-based food manufacturer.
The rationale behind the acquisition lies in the distribution network that Zoglo’s has built, which features over 3,000 distribution points across Canada. The firms products are currently found in major retailers that include Sobeys, IGA, FreshCo, Metro, and Walmart Canada. The company currently distributes 12 SKU’s of plant-based burgers, sausages, chicken and more through that retail network.
“The retail distribution that Zoglo’s has is nearly unmatched in the plant-based retail space in Canada and I believe that we can leverage this distribution to both monetize our own products and also make Zoglo’s products even more successful in their category,” commented Odd Burger CEO James McInnes.
That distribution network is expected to provide benefits to Odd Burger as it looks to continue to scale its operations by launching branded products into the retail landscape. Opportunities to enhance distribution of Zoglo’s products are also said to exist via Odd Burger’s access to food service channels.
Few details were released on the financial aspects of the proposed acquisition, with the two parties working to enter a definitive agreement. The current proposal suggests that Zoglo’s shareholders would own 25% of the resulting company, suggesting that it would be an all-share transaction that occurs.
Odd Burger is currently valued at approximately $11.4 million, which would imply that consideration for Zoglo’s would equate to roughly $3.76 million in the form of shares, or $0.035 per share – while Zoglo’s is currently valued at $4.78 million as of yesterday’s close.
Odd Burger last traded at $0.125 on the TSX Venture.
Information for this briefing was found via Sedar and The Very Good Food Company. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
