LONDON, UK: Yooma Wellness Inc. has entered into definitive agreements to complete the acquisition of Big Swig Inc., a US-based seller of sparkling water beverages.
The acquisition will increase Yooma’s presence in retailers located throughout the southern United States and add the Big Swig and Hard Swig brands to Yooma’s expanding portfolio, with opportunities for the creation of exciting new product offerings in the CBD and wellness space, and vertical integration with Yooma’s existing wellness platform.
Jordan Greenberg, CEO of Yooma, said: “This exciting acquisition is the second step in the strategic plan we presented to our investors at the time of our dual listing in London last month. Big Swig will expand our footprint in the United States and add a whole new line of product offerings to our platform, with the potential for real cross-pollination with our CBD and wellness brands and capabilities.”
The transaction will be implemented through a merger between Big Swig and Yooma Acquisition II Inc., a wholly-owned subsidiary of Yooma, under a merger agreement between the three parties dated 20 September 2021. On completion of the Merger, Big Swig will become a wholly-owned subsidiary of Yooma and its former shareholders will exchange their shares for common shares of Yooma.
The merger agreement values Big Swig at US$2,500,000, less anticipated liabilities on closing of approximatelyUS$1,125,000 (including US$375,000 owing to Yooma for funds advanced in anticipation of the transaction). The consideration to be paid by Yooma on completion of the Merger will consist of up to 1,729,599 common shares of Yooma (the “Consideration Shares”) at a price per share of US$0.795 (CAD$ 1.01), subject to adjustment on closing based on the debt and short-term working capital in Big Swig.
The Consideration Shares will be subject to a 24-month lock-up period, with one quarter of the Consideration Shares releasing from lock-up every six months. In addition, 10% of the Consideration Shares will be subject to a 24-month escrow indemnity holdback, which will allow them to be accessed to satisfy the indemnity obligations of the parties under the Merger Agreement.
The Merger is presently scheduled to be completed between 27 September 2021 and 30 September 2021, subject to the satisfaction of certain closing conditions which include: the representations and warranties of the parties remaining accurate through to the date of closing, the compliance of the parties in all material respects with their obligations under the merger agreement, no material adverse effect having occurred in either party, the approval of the Big Swig shareholders to the Merger, Big Swig maintaining agreed-upon levels of debt and short-term working capital through to the closing date, and the delivery of ancillary documents which include shareholder representation letters, employment agreements, non-competition and non-solicitation agreements and confidentiality agreements.
Yooma also announced today that the option it had granted to a strategic investor to subscribe for up to 9,555,555 common shares and 4,777,777 warrants for common shares of Yooma in connection with its UK financing and dual-listing on the Aquis Stock Exchange Growth Market has expired without being exercised. The option was granted to provide time for the strategic investor to structure its proposed holding structure for the investment, which the investor was unable to complete within the agreed time frame.