EarthRenew’s CEO Keith Driver explained: “The outcome of the diligence process was that it became apparent to both parties that we were more aligned with our collective vision than we originally thought, and the natural next step was for EarthRenew to become much more than a minority owner of Replenish Nutrients. If consummated, acquiring full ownership is anticipated to allow us to not only add top line revenue and accelerate phase two of our construction plans, but also to invest in the growth of Replenish Nutrient’s manufacturing capacity to address a supply gap for their product. We look forward to the potential to work with the entire Replenish Nutrients team to accelerate growth of the new combined entity, leveraging their experience in the fertilizer and soil solution space.”
Upon completion of the proposed acquisition, the Replenish Nutrients team intends to support all aspects of the marketing, distribution and sales, including of EarthRenew’s products, into the regenerative agriculture space. Replenish Nutrients currently has an established product line that it sells across Western Canada and the US (North Dakota and Montana), which generates strong revenues.
Following the closing of the proposed acquisition, the combined company is projected to become a leader in the regenerative and organic fertilizer space. We expect that the combined entity will have the capacity to manufacture, market and distribute a broad range of high-value crop inputs. Replenish Nutrients booked revenue of US$5.1 million for the last 6 months of 2020 and through the end of January 2021 with a gross margin of approximately 30%. The company is forecasting US$4.8 million in revenue for the balance of the first half of 2021. This equates to a total of US$9.9 million for the period of July 2020 through June 2021, up from US$3.6 million for the same period in 2019/2020. Consideration for the Proposed Acquisition is approximately US$1.1 million in cash and US$7.9 million in common shares of EarthRenew.
Following completion of the proposed acquisition, it is anticipated that Replenish Nutrients will continue to operate as a marketing and distribution company as a wholly owned subsidiary of EarthRenew. The combined entity expects to be able to generate significant revenue growth within the expanding regenerative and organic fertilizer markets.
