VANCOUVER: The Very Good Food Company (VERY) has signed a non-binding letter of intent for the acquisition of all the shares of The Cultured Nut Inc., a popular plant-based cheese company located in Victoria, British Columbia, a news release said,
The Cultured Nut has current distribution in several online and grocery retailers including SPUD.ca and select Whole Foods stores.
The Cultured Nut is a rapidly growing and highly successful artisan vegan cheese manufacturer on the West Coast of Canada with a well established line-up of innovative products consisting of block style cheeses, cream cheese and plant-based butter, which are tree nut based and both soy and gluten free.
VERY has been selling The Cultured Nut’s artisan vegan cheese products in its eCommerce and retail stores since September 2017 with overwhelmingly positive results and feedback.
The dairy alternatives market, including the plant-based and vegan sector, is expected to grow at a CAGR of 11.2% from 2020 to 2027 to reach $44.9 billion by 2027. With the entire plant-based food industry growing at a rapid pace, the intended acquisition is very timely and is an excellent complement to the Company’s existing product line under The Very Good Butchers brand.
Mitchell Scott, CEO of The Very Good Food Company, stated: “The proposed acquisition of The Cultured Nut marks VERY’s first move into the dairy alternatives space and is the next natural step towards achieving our near-term objective of being a leader in the plant-based food technology industry.
With a shared ethos of using only high quality whole food ingredients, The Cultured Nut is a perfect addition to our existing and growing product portfolio. We have been selling their plant-based cheeses in our eCommerce and retail stores since September 2017, and have seen increased demand from consumers and highly positive reviews.
We feel that by quickly integrating The Cultured Nut into our existing processes and distribution network, these synergies will allow us to scale their operations significantly and create a key, and entirely new revenue stream for our Company.”
Under the terms of the letter of intent, completion of the acquisition is subject to a number of conditions including, but not limited to, the completion of mutual due diligence, the negotiation and execution of a definitive agreement and the satisfaction of all closing conditions (including obtaining all regulatory approvals).
Pursuant to the LOI, the aggregate purchase price for Cultured Nut will be C$3.0 million consisting of: (i) a $1.0 million cash payment; (ii) such number of common shares of the Company equal to C$1.0 million divided by the greater of the 30-day volume weighted average trading price of the Company share sending two trading days prior to closing of the acquisition or the minimum price as may be permitted by the Exchange; (iii) a C$925,000 cash payment subject to meeting certain milestones related to integration of the Cultured Nut’s business; and (iv) a C$75,000 cash payment subject to certain indemnification requirements.
In addition, key Cultured Nut employees will enter into employment agreements with VERY. The parties have agreed to an exclusivity period until February 15, 2021 to complete due diligence and to negotiate and execute the definitive agreement.
However, the Company can give no assurance that the Acquisition will be completed as proposed or at all. The LOI is non-binding and neither the Company nor Cultured Nut is under any obligation with respect to the Acquisition or otherwise. Other than as specifically set out in the LOI, no definitive agreement will exist between the Company and Cultured Nut relating to the Acquisition unless and until a definitive agreement has been executed.
The Very Good Food Company Inc. is an emerging plant-based food technology company.
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