Arcadia Biosciences Inc (NASDAQ:RKDA) has acquired the assets of Lief Holdings LLC and its portfolio of wellness products from The Parent Company (NEO:TPCO) along with select assets of Live Zola LLC.
Arcadia said the acquisition includes leading consumer CBD brands like Soul Spring, the top-selling CBD-infused botanical therapy brand in the natural category, as well as Saavy Naturals, a leading line of all-natural body care products.
The purchase price for these assets was $4 million in cash, plus 827,400 shares of Arcadia common stock, the company said.
READ: Arcadia Biosciences says Belinda Yao has joined the company as vice president of operations
"Arcadia has been looking to further build out its channel and brand strategy for consumer goods in the CBD wellness space, and we were fortunate to accelerate our efforts by acquiring these assets from The Parent Company," said Arcadia CEO Matt Plavan in a statement.
"Through this transaction, we have a unique opportunity to leverage a number of synergies between the two companies to significantly increase the ultimate value of the combined assets."
The current portfolio of Lief and Zola products includes four brands representing a diverse product base addressing 17 categories in the health and wellness space.
Arcadia said the three of the brands -- Soul Spring, Saavy Naturals and Zola -- represent about $6 million in recurring annual revenues. The Provault brand was launched in March of this year, anchored at Sprouts Farmers Market, and is showing good reorder velocity. The early positive reception coupled with the strong demand for sports formulas for pain management makes Provault a potentially strong contributor to revenue growth.
As part of the transaction, Arcadia said it gains access to distribution channels and relationships in more than 5,000 stores nationally including Wegmans, The Vitamin Shoppe, Sprouts, and others. Arcadia also acquires the Lief operations, which occupy a 20,000 square foot, GMP-licensed, ISO-certified manufacturing facility with onsite capabilities including ingredient sourcing, formulation, manufacturing, QA/QC, warehousing, flexible order fulfillment, and logistics.
Important to the value of the transaction for Arcadia is the addition of an experienced management team with a proven track record to efficiently scale brands in the CBD and food and beverage sectors, including growth strategy, manufacturing, supply chain, and sales and marketing.
Arcadia said Lief employees are expected to join it with the acquisition, including senior leadership executives who bring years of expertise and success in the fast-moving consumer goods industry.
Chris Cuvelier, founder and CEO of Zola, will join Arcadia as chief growth officer, and Brett Michel, COO of Lief, will join as general manager of the acquired brands. Belinda Yao, the former vice president of operations for Zola, joined Arcadia as vice president of operations earlier this month.
"The benefits this transaction brings to both Arcadia and Lief are compelling," said CEO Plavan. "In addition to the operational and organizational synergies, we expect that future investments by Arcadia will have an immediate and positive impact on the Lief family of brands. For example, not only do we now have an extensive, ready-made national retail grocer channel for our GoodWheat consumer product offering, currently less than 10 percent of Lief sales come from online orders, so there's tremendous potential to expand sales of the Lief brands through the digital e-commerce infrastructure developed for our GoodWheat platform."
In connection with the closing of the acquisition, Arcadia said it will grant inducement stock options to purchase a total of 248,000 shares of its common stock to 14 new employees who were employees of the sellers.
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