“Letter of Intent” to Acquire Another U.S. Delivery Company VANCOUVER, British Columbia, Oct. 05, 2021 (GLOBE NEWSWIRE) -- ParcelPal Logistics Inc. (the “Company” or “ParcelPal”), (OTC:PTNYF) (CSE:PKG) (FSE:PT0) is pleased to announce that it has signed a “letter of intent” with another United States delivery service company (“Acquiree”). The Acquiree initiated operations at this specific locale in March 2021 and has been rapidly growing. For calendar year 2021, Acquiree is projecting gross revenues of approximately $1.0M USD, and for its first 12 months of operations they are projecting gross revenues for approximately $1.3M USD. It is important to note that the Acquiree’s principal customer is a major global delivery service provider and is not one that ParcelPal currently does any business with; therefore, assuming consummation of this transaction, this will also lend itself towards our goal to diversify our customer base while immediately adding to our topline gross revenue growth.
The total purchase price (the “Purchase Price”) is expected to be one time actual revenue of the Acquiree’s first 12 months of operations, based on an earn-out schedule to be set forth in the definitive agreement, which will be payable in cash (60%) and in shares of ParcelPal’s common stock (40%), the stock portion of which shall be priced at-market based on the closing price of the common stock following the closing of the transaction. Under the terms of the proposed transaction, this will be an asset sale and ParcelPal will acquire 100% of the Acquiree’s outstanding assets and revenues generated from this delivery service location, which is located in the western region of the United States.
The parties intend to complete the proposed transaction in Q4 2021; however, the consummation of the transaction will be subject to the satisfactory completion by us of all due diligence, regulatory approvals, if any, contractual consents and the negotiation and execution of the definitive transaction agreements and satisfaction of customary conditions negotiated therein. The cash portion of the purchase price, which we currently anticipate paying in two to three tranches beginning on the closing date, will be from either (or a combination of) existing cash, the use of our equity line of credit facility and/or a non-brokered private placement financing.
We will, of course, provide an update following the consummation of this transaction, and upon the closing of any interim financing that we may endeavor, if any, prior to or simultaneously therewith. There can be no assurance that the proposed transaction will be completed on the terms proposed in the Letter of Intent, on the above noted timeline or at all.
Rich Wheeless, CEO of ParcelPal Logistics stated: “This is another significant milestone for the Company. As you may recall, we completed our first U.S. acquisition about a month ago. This proposed new U.S. acquisition is very important because the would be customer involves a global service provider that is non-Amazon related, involves a rapidly growing site, and the would be customer is among the gold standard for delivery providers in the logistics space. This second acquisition will not only add additional significant revenue, but is also expected to serve as a stepping-stone for further U.S. expansion and increased client diversification opportunities for us. We are thrilled to be working with the Acquiree’s team and are pleased that they share our vision for the strategic direction of ParcelPal and the streamlined delivery services path, based upon our plan that was initially developed in 2020.”
https://www.globenewswire.com/en/news-release/2021/10/05/2308601/0/en/ParcelPal-Announces-Further-Expansion-into-the-United-States-via-Entry-Into-Letter-of-Intent-to-Acquire-Another-U-S-Delivery-Company.html