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Simply Better Brands Corp. (OTCQB:PKANF) (TSX:SBBC) has acquired Hervé Edibles Limited pursuant to a share purchase agreement dated March 18, 2022. Hervé develops processes, recipes and patent-protected technologies that go into producing a variety of desserts, candies, macarons and other delicacies that combine contemporary design with flavors. Launched in 2020, Hervé blends together decades of traditional French culinary history with innovative processes, creating the intricately infused luxury desserts. As of March 18, Hervé has approximately net working capital of CA$1,038,235 ($82,000,000). For its most recently completed fiscal year ended December 31, 2021, Hervé’s unaudited financial statement reported assets of CA$1,898,798 and liabilities of CA$57,770.
Under the terms of the SPA, the company acquired all of the issued and outstanding common shares of Hervé for an aggregate purchase consideration of approximately CA$8 million payable in the form of issuance of 1,705,755 common shares of the company, to the shareholders Hervé, at a price per consideration share of CA$4.69, calculated on the basis of the volume-weighted average closing price of the company’s shares on the TSX Venture Exchange determined based on the fifteen trading days immediately preceding the closing date. In addition, CA$1million of additional consideration shares may be issued upon the company achieving specific sales revenue targets of Hervé products.
The acquisition is treated as reviewable, pursuant to Policy 5.3 of TSXV’s corporate finance manual and therefore subject to TSXV’s final approval. The SBBC shares issued in consideration will be subject to a contractual lock-up for a period of 6 months from the date of issuance, with 1/12 of the consideration being released from the transfer restrictions every month for 12 months thereafter. The company will pay a finder’s fee of CA$300,000, payable in the form of issuance of SBBC shares in relation to the acquisition to an arm’s length third party. The shares issued pursuant to the finder’s fee will be subject to a statutory 4-month hold period. The acquisition was negotiated on an arm’s length basis.
