Transformative Transaction for Wildpack's Brokerage
Operations
/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN
CANADA ONLY AND IS NOT INTENDED
FOR DISTRIBUTION TO UNITED STATES
NEWSWIRE SERVICES OR DISSEMINATION IN THE
UNITED STATES./
- Located in the key strategic North Central region in
Grand Rapids, Michigan, Land and
Sea Packaging is strongly aligned with Wildpack's business
plan.
- Land and Sea generated LTM Revenue of US$21,886,000 and LTM EBITDA of US$4,670,000.
- History of profitable operations for 20+ years.
- Acquisition achieves Wildpack's 2021 growth strategy of 6
facilities ahead of schedule.
- Land and Sea brokers approximately 90 million cans annually,
with a diverse client base across 15 U.S. states.
- Key leaders aligned with long-term employment contracts and a
seat on Wildpack's board of directors.
VANCOUVER, BC, Nov. 1, 2021 /CNW/ - Wildpack Beverage
Inc. (TSXV: CANS) ("Wildpack" or the "Company") is
pleased to announce that it has entered into a binding agreement
dated November 1, 2021 (the
"Agreement") to acquire, through a wholly owned subsidiary
Wildpack Holdings US Inc. ("Wildpack US"), all of the issued
and outstanding securities of KT Murray Corporation, dba Land and
Sea Packaging ("Land and Sea"), an established high-volume
aluminum can brokering business based in Grand Rapids, Michigan for cash consideration
of US$26.1 million and common
shares of Wildpack ("Common Shares") with an aggregate value
of approximately US$11.2 million,
subject to certain adjustments and holdbacks (the
"Acquisition").
The transaction delivers on Wildpack's strategic goal of
acquiring or building six facilities by the end of 2021. Land and
Sea operates in the North Central region, which offers distribution
coverage to a key strategic area with no overlap on the current
network of Wildpack's facilities. A leader in the rigid packaging
business, Land and Sea complements Wildpack's existing operations
in the areas of brokerage of aluminum cans, supply chain
forecasting and procurement, enhancing all of the Company's
business segments. Its owner, Kim
Murray, and its Chief Operating Officer, Tim Murray, will both remain with Wildpack as
employees and will be represented on the Board of Directors with a
voting seat and an observer seat.
"We are extremely excited to join the Wildpack team. We have
very similar customer-centric cultures that will result in a
seamless transition," said Land and Sea owner Kim Murray. "The added capabilities in the areas
of can decorating and contract filling will allow us to better
serve our existing customers as a full-service supply chain,
packaging, and manufacturing provider. We are eager to gain
the resources that Wildpack has access to so that we can replicate
our forecasting and procurement business across their platform of
customers."
Wildpack Chief Executive Officer Mitch
Barnard commented, "What Land and Sea has been able to build
is nothing short of incredible. Their ability to build customer
relationships and trust through meticulous forecasting and
procurement services has transformed their business from just a
broker to a meaningful partner. This creates significant
stickiness in their existing business and provides Wildpack the
internal expertise to scale a forecasting and procurement division
providing value-add incremental services to our more than 400
customers. Wildpack is quickly becoming a one-stop shop for brands
to operationalize their visions. As we continue to acquire slightly
up and down our vertical, we unlock more value for our customers
allowing them to focus on what they do best – sales and marketing –
while leaving the rest to us. While in and of itself this
transaction is transformative for Wildpack based solely on the
business, we are equally excited to have Tim and Kim join our
leadership team and to stand shoulder-to-shoulder with us as we
build Wildpack into the dominant player in the middle market
beverage manufacturing industry."
Financial Highlights
LTM Figures
(US$mm)
|
Revenue
|
Gross
Profit
|
EBITDA
|
|
|
|
|
Wildpack(1)
|
$22.7
|
$3.0
|
$0.7
|
L&S(2)
|
$21.9
|
$6.7
|
$4.7
|
Pro Forma
|
$44.6
|
$9.8
|
$5.4
|
|
|
|
|
%
Contribution
|
|
|
|
Wildpack
|
51.0%
|
30.9%
|
13.1%
|
L&S
|
49.0%
|
69.1%
|
86.9%
|
|
(1)
Wildpack LTM covers the period of July 1, 2020 to June 30, 2021. Q3
2021 financial results are not yet released.
|
(2) L&S LTM covers the period of
October 1, 2020 to September 30, 2021.
|
Transaction Summary
Under the terms of the Agreement, subject to certain
adjustments, the total purchase price payable by Wildpack US is
$37,260,000, consisting of 12,596,081
Common Shares at a price of C$1.10
per Common Share and US$26.1 million
in cash. A portion of the purchase price will be subject to a
customary holdback (the "Holdback"), comprised of both cash
and Common Shares, as security for the adjustment and
indemnification obligations of the vendor under the Agreement. The
Holdback will be retained by Wildpack US and, subject to certain
conditions, will be released to the vendor in accordance with the
terms of the Agreement.
On closing, the Common Shares will be deposited with
Computershare Investor Services Inc. to be held and released to the
vendor in accordance with the terms of a pooling agreement,
pursuant to which the Common Shares will be released to the vendor
over a period of 24 months from the closing date, with the final
10% being released on the 24 month anniversary of the closing date.
As a condition of closing, Wildpack will enter into employment
agreements with each of Kim Murray
and Tim Murray, and will retain all
Land and Sea employees.
The transaction is subject to TSX Venture Exchange
("TSXV") and other necessary regulatory approvals, and the
receipt of third-party consents, together with other customary
closing conditions in a transaction of this nature. Closing of the
transaction is expected to occur contemporaneously with the
Offerings (defined below) on the Closing Date (as defined
below).
Stifel GMP acted as the exclusive financial advisor to Wildpack
in connection with the Acquisition.
Financings
C$22 Million Bought Deal of
Units
Wildpack is pleased to announce that it has entered into an
agreement with Stifel GMP, as sole bookrunner and lead underwriter,
on behalf of a syndicate of underwriters including Roth Capital
Partners LLC, PI Financial Corp., and Leede Jones Gable Inc.
(collectively, the "Underwriters") pursuant to which the
Underwriters have agreed to purchase on a bought deal basis, an
aggregate of 22,680,412 units (the "Units") of the Company
at a price of C$0.97 per Unit (the
"Offering Price") for aggregate gross proceeds to the
Company of C$22 million (the "Unit
Offering").
Each Unit shall consist of one Common Share and one-half common
share purchase warrant of the Company (each whole common share
purchase warrant, a "Warrant"). Each Warrant shall be
exercisable to acquire one Common Share of the Company (a
"Warrant Share") for a period of 36 months from the closing
of the Unit Offering at an exercise price of C$1.26 per Warrant, subject to adjustment in
certain events.
The Company has granted the Underwriters an option (the
"Over-Allotment Option") to purchase up to an additional
3,402,061 Units at the Offering Price, which Over-Allotment Option
will be exercisable at any time and from time-to-time, for a period
of 30 days following the Closing Date (as defined below), which
would result in additional gross proceeds of up to C$3.3
million. The Over-Allotment Option is exercisable to acquire Units,
Common Shares or Warrants (or any combination thereof) at the
discretion of the Underwriters.
The Units will be offered by way of a short form prospectus to
be filed in all provinces of Canada except Québec.
The Unit Offering is expected to close on or about November
23, 2021 (the "Closing Date") and is subject to certain
conditions including, but not limited to, the receipt of all
necessary regulatory and stock exchange approvals, including the
approval of the TSXV and the applicable securities regulatory
authorities.
The Company intends to use the net proceeds of the Unit Offering
to fund a portion of the Purchase Price of the Acquisition and for
general corporate purposes.
Concurrent C$20 Million Private
Placement of Debenture Units
Wildpack is pleased to announce that in conjunction with the
Unit Offering, it has entered into an agreement with Stifel GMP as
sole bookrunner and lead underwriter, on behalf of the
Underwriters, pursuant to which the Underwriters have agreed to
purchase 20,000 convertible debenture units of the Company (the
"Debenture Units"), on a bought deal private placement
basis, subject to all required regulatory approvals, at a price
of $1,000 (the "Issue Price") per Debenture Unit,
for gross proceeds of C$20,000,000 (the "Debenture
Unit Offering" and together with the Unit Offering, the
"Offerings"). Each Debenture Unit consists of (i) one 8%
senior unsecured convertible debenture (the "Convertible
Debentures") having a face value of $1,000 and
convertible into Common Shares at a conversion price
of C$1.51 per Common Share (the "Conversion
Price") and maturing four years from the Closing Date (the
"Maturity Date"); and (ii) 332 Warrants of the Company (the
"PP Warrants" and, together with the Convertible Debentures,
the "Underlying Securities"). Each PP Warrant entitles
the holder thereof to purchase one Common Share at an exercise
price of $1.81 for a period of
two years following the Closing Date.
At any time and from time to time following the expiry of 36
months after the Closing Date, the Company may, at its option,
redeem pro rata all or part of the Convertible
Debentures, upon not less than 30 nor more than 60 days' prior
written notice, at a redemption price which is equal to 110% of the
principal amount thereof, plus any accrued and unpaid interest that
would otherwise by payable to the holder from the time of the
optional redemption until the Maturity Date.
The Company may force the conversion of all but not less than
all of the principal amount of the then outstanding Convertible
Debentures at the Conversion Price if the volume weighted average
trading price of the Common Shares on the TSXV is greater than a
45% premium to the Conversion Price for the preceding twenty (20)
consecutive trading days. Holders having their Convertible
Debentures converted will receive accrued and unpaid interest
thereon in cash.
The Debenture Units will be offered on a private placement basis
in all provinces of Canada (except Québec) and will
be subject to a four month hold period pursuant to applicable
securities laws. The Company intends to use the net proceeds of the
Debenture Unit Offering to fund a portion of the Purchase Price of
the Acquisition and for general corporate purposes.
The Debenture Unit Offering is expected to close concurrently
with the Unit Offering on Closing Date. The Debenture Unit Offering
is subject to certain conditions including, but not limited to, the
receipt of all necessary regulatory and stock exchange approvals,
including the approval of the TSXV and the applicable securities
regulatory authorities.
The securities being offered have not been, nor will they be,
registered under the United States Securities Act of 1933, as
amended, and may not be offered or sold in the United States or to, or for the account or
benefit of, U.S. persons absent registration or an applicable
exemption from the registration requirements. This press release
shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of the securities in any
State in which such offer, solicitation or sale would be
unlawful.
Per: "Mitch Barnard"
Mitch Barnard
Chief Executive Officer and Director
Advisors
Stifel GMP is financial advisor to Wildpack Beverage, Inc.,
Fasken Martineau DuMoulin LLP is its legal
advisor. Wildeboer Dellelce LLP is acting as legal
counsel for the Underwriters.
Visit our investor website at:
https://investor.wildpackbev.com
About Wildpack
Wildpack is engaged in beverage manufacturing and packaging,
operating in the middle market by providing sustainable
aluminum can filling and ecofriendly decorating
services to brands throughout the United
States. Wildpack currently operates indirectly through its
wholly owned subsidiaries and out of facilities in Baltimore, Maryland, Atlanta, Georgia, Longmont, Colorado, Sacramento, California and Las Vegas, Nevada with a focus on
digital innovation and green ready-to-drink packaging.
Wildpack commenced trading on May 19, 2021 on the TSX
Venture Exchange under the symbol "CANS.V".
Forward-Looking Statements
This news release may contain "forward-looking statements"
within the meaning of applicable Canadian securities laws,
including, without limitation, our statements related to: the
completion of the Acquisition; the completion of the Offerings; the
impact of the Acquisition on the Company's business and its growth
plans; the costs savings and synergies anticipated from the
Acquisition, and the Company's growth and acquisition plans in
general. Forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered
reasonable by management, are inherently subject to significant
business, economic and competitive uncertainties, and
contingencies. These statements generally can be identified by the
use of forward-looking words such as "may", "should", "will",
"could", "intend", "estimate", "plan", "anticipate", "expect",
"believe" or "continue", or the negative thereof or similar
variations. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause future
results, performance or achievements to be materially different
from the estimated future results, performance or achievements
expressed or implied by those forward-looking statements and the
forward-looking statements are not guarantees of future
performance. Wildpack's statements expressed or implied by these
forward-looking statements are subject to a number of risks,
uncertainties, and conditions, many of which are outside of
Wildpack's control, and undue reliance should not be placed on such
statements. Forward-looking statements are qualified in their
entirety by the inherent risks and uncertainties surrounding the
Transaction, including: that Wildpack will not be able to complete
the Acquisition (or either of the Offerings) on the anticipated
timeline, if at all; that the actual impact of the Acquisition on
Wildpack's business and growth strategy will not be as currently
anticipated; that Wildpack's other assumptions in making
forward-looking statements may prove to be incorrect; adverse
market conditions; risks inherent in the beverage manufacturing and
packaging sector in general; that future results may vary from
historical results; and competition in the markets where
Wildpack operates. Except as required by securities law, Wildpack
does not assume any obligation to update or revise any
forward-looking statements, whether as a result of new information,
events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Wildpack Beverage Inc.