Leone had to recuse himself from negotiations on behalf of BEV, and abstained from all Board Votes and/or decisions on the BevCanna side regarding the transaction…
Yes there is inherent dilution in M&A, but I see it that we are picking up a $38M-42M asset for $20M in shares -- meaning the valuation was mindful of the previous relationship the companies have had for the last 3 years, and that Naturo stakeholders are buying into the future of BEV and are committed to the upside of the merged entity. Clearly we have some bears in this chat, but i only see this as a positive and a sign of huge buy in from the CEO to be putting his private entity with all these assets into BEV, and doing so at a respectable valuation. Seems like a great transaction to me...
Once licensed, (expected before, or shortly after the holidays), The combination will create the
only fully licensed, in-house and white-label beverage manufacturing company that distributes both conventional and cannabis-based beverage and wellness products. The newly formed company will now have access to global, multi-channel distribution networks of traditional and cannabis sales channels.
BevCanna will be taking ownership of approximately $32M of INDEPENDENTLY VALUED HARD ASSETS, on top of the nationally distributed proprietary plant based brand TRACE and beverage business.
- 40,000 sq. ft. high-capacity beverage facility
- 315-acres of outdoor cultivatable land valued at $10.4M
- Beverage manufacturing equipment valued at $3.4M (as of year-end)
- Proprietary Health Canada approved fulvic and humic plant-based mineral formulation.
- Naturo flagship brand, TRACE, which currently enjoys a leadership position within the Canadian plant-based fulvic and humic mineral category and is sold in more than 3,000 Canadian retailers, with select international agreements and partnerships under review.
- And one of Naturo’s most valuable assets; their exclusive onsite alkaline spring water source, independently valued at $18M.
The water source is a major factor... two-thirds of the world's population will face water shortages by 2025. A direct quote CNN: "At the end of the day, water is just another scarce resource, just like oil, except you need it to brush your teeth every day.
"Water scarcity is one of the biggest challenges of the 21st century,"
This will be a huge differentiator and potential acquisition target selling point, as water resources become increasingly scarcer.
In my opinion this combination accelerates BevCanna’s evolution into a comprehensive health and wellness company, and the independently valued hard assets of the manufacturing facility, equipment, and proprietary resource will contribute to a strengthened balance sheet and to BevCanna’s unique positioning within the exploding plant-based and cannabis sectors.
BevCanna has the potential to create a compelling health & wellness platform similar to that of a New Age Inc or Neptune Wellness. Should be interesting to watch in 2021 and beyond.