VANCOUVER, British Columbia — Naturally Splendid Enterprises has signed an agreement to acquire Prosnack Natural Foods, a Canadian company based in North Vancouver, from iCream for $200,000 in cash. According to the agreement terms, Naturally Splendid has also agreed to issue to iCream on closing 1,098,901 of its common shares.
The shares issuable to iCream will be subject to a four-month hold period in accordance with applicable Canadian securities laws. For a period of five years, Naturally Splendid will also make earn-out payments to iCream equal to 25% of the annual increases to its retail, private-labeling and co-pack sales in the preceding year. The aggregate total earn-out payments that could be made to iCream will be capped at approximately $1,200,000. Closing of the acquisition remains subject to certain conditions, including the approval of the TSX Venture Exchange.
Currently distributed throughout North America, Prosnack’s Elevate Me brand includes energy bars and on-the-go oatmeal. The Elevate Me brand is available in more than 1,000 retail stores including major retailers such as Costco, Whole Foods, Choices, Save On Foods, Sobeys, London Drugs, Thrifty’s, Rexall and many more. A unique feature of Prosnack is its ongoing success strategy of private labeling for major retailers in North America and co-packing for other manufacturers globally. The combination of Elevate Me products and its private label clients is almost $8,000,000 CDN in sales in the past four years.
“Our new relationship with Prosnack and its founders, Alan Maddox and Jim Pratt, continues our strategy to gain market share in the healthy food sector retail markets,” said Naturally Splendid CEO, Dave Eto. “Not only will synergies benefit Naturally Splendid with enhanced and effective operating costs, leverage distribution and innovative products, but Alan’s relationships with retailers and co-packers and his business acumen also strengthen both companies’ Canadian and U.S. marketing and branding capabilities.”
Upon completion of the acquisition, Alan Maddox is expected to become EVP, sales and marketing for Naturally Splendid, and Jim Pratt is expected to join Naturally Splendid’s advisory board. Maddox and Pratt partnered to purchase Prosnack Natural Foods, the makers of Elevate Me All-Natural Protein Bar, in January 2013.
As part of the acquisition, Naturally Splendid will also take ownership of approximately $300,000 of automated manufacturing equipment in Prosnack’s manufacturing facility, located in North Vancouver. The facility complies with several certifications, most notably SQF level 2, kosher and gluten-free.