Key Takeaways
- Vireo Growth Inc. (CSE: VREO | OTCQX: VREOF) has announced its intention to acquire Bridgewell Agribusiness LLC, a privately held supplier of organic and non-GMO food and agricultural products to manufacturers and processors, for a base purchase price of US$40 million.
- After accounting for approximately US$30 million in assumed Bridgewell indebtedness and other transaction adjustments, the estimated closing purchase price is expected to be approximately US$10.26 million.
- Vireo will fund the acquisition through an unsecured, subordinated convertible note to the seller, which will automatically convert on or after the second anniversary of closing into an estimated 16.55 million subordinate voting shares at a deemed price of US$0.62 per share.
- Bridgewell sources, procures, and supplies organic and non-GMO agricultural commodities and food ingredients, acting as an intermediary between agricultural producers and food manufacturers.
- The transaction remains conditional on the execution of definitive agreements and receipt of all required regulatory approvals, including, if applicable, approval from the Canadian Securities Exchange.
Vireo Growth Announces Intention to Acquire Organic Ingredient Supplier Bridgewell Agribusiness
Vireo Growth Inc. has announced its intention to enter into a Securities Purchase Agreement to acquire all issued and outstanding membership interests of Bridgewell Agribusiness LLC from BWAB Holdings LLC. Bridgewell is a privately held company that sources, procures, and supplies organic and non-GMO agricultural commodities and food ingredients to manufacturers and processors, serving as an intermediary between agricultural producers and food manufacturers. The company provides customers with raw materials and ingredients that meet applicable certification and regulatory standards.
The transaction could close as soon as five business days following the date of the announcement, subject to the conditions outlined below.
Vireo Growth & Bridgewell Transaction Structure and Consideration
The acquisition is structured around a base purchase price of US$40 million. However, after adjusting for approximately US$30 million in Bridgewell indebtedness that will remain outstanding following closing, along with certain other transaction expenses, the estimated net closing purchase price is approximately US$10,262,333.
Rather than a cash payment, Vireo will issue an unsecured, subordinated convertible note to BWAB Holdings in a principal amount equal to the closing purchase price. The note will automatically convert on or after the second anniversary of closing into an estimated 16,552,150 subordinate voting shares of Vireo at a deemed price of US$0.62 per share, based on the volume weighted average trading price of Vireo's shares over 20 consecutive trading days ending two trading days prior to closing. Both the principal amount of the note and the number of consideration shares are subject to post-closing purchase price adjustments.
Conditions and Regulatory Requirements
Completion of the Bridgewell Transaction remains subject to the negotiation and execution of definitive transaction agreements on terms acceptable to both parties, and the receipt of all required regulatory approvals, including Canadian Securities Exchange approval if applicable. Vireo cautioned that there is no assurance a definitive agreement will be reached or that the transaction will be completed on the described terms.
The consideration shares have not been and will not be registered under the U.S. Securities Act of 1933. They will be classified as restricted securities under Rule 144 and subject to a hold period of four months and one day from the date of distribution under applicable Canadian securities legislation.
