Located in the key strategic North Central region in Grand Rapids, Michigan, Land and Sea Packaging is strongly aligned with Wildpack's business plan
Wildpack Announces Agreement to Acquire Land and Sea Packaging. (Credit: gepharts3d from Pixabay)
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.”
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).
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.
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.
Source: Company Press Release