Regenerative fertilizer and power company EarthRenew Inc., Toronto, said on May 12 it has closed on the acquisition of Replenish Nutrients Ltd. (GM Feb. 26, p. 36), a privately held regenerative fertilizer company located in Okotoks, Alta.
“We are very pleased to be able to announce the close of this transaction and to move forward with our ambitious plans to grow our newly combined entity,” said EarthRenew President and CEO Keith Driver. “It is the beginning of a new phase for EarthRenew where we plan to significantly scale our production capacity by 10X by expanding by product, volume, and geography, and transitioning to a cashflow positive business.”
Effective May 1, 2021, the security holders of Replenish entered into a private acquisition agreement whereby EarthRenew acquired all of the issued and outstanding securities of Replenish from the holders at a price of approximately US$9 million (subject to certain adjustments for working capital and indebtedness outstanding on the completion date of the transaction), payable as $1.41 million in cash and a total of 21,264,093 common shares of EarthRenew at a deemed price of $0.248 per EarthRenew common share. Such consideration includes amounts to satisfy approximately $2.8 million of loans owed by Replenish to certain security holders.
As additional consideration, the company agreed to pay to certain of holders, ongoing earth-out earn-out payments totaling an aggregate of up to $7 million based on qualifying gross annual revenue of Replenish through June 30, 2025, and supplemental earn-out payments of an aggregate amount of up to $2 million based on certain sales parameters.
In addition, the holders shall be entitled to nominate three individuals for election to EarthRenew’s Board of Directors at its annual general meeting held each year for as long as they collectively hold at least 10 percent of the issued and outstanding EarthRenew shares.