PlantX Life Inc. (CSE:VEGA) told investors it has entered into an asset purchase agreement to acquire substantially all of the assets and certain assumed liabilities of Peter Rubi, LLC for a valuation multiple of less than 1x 2021 unaudited revenue.
The company said the agreement, dated December 12, 2021, was made through its indirect wholly-owned subsidiary, PlantX Midwest Inc.
It noted that Peter Rubi is an innovative plant-based market and e-commerce platform, with two brick-and-mortar stores located in Chicago, Illinois and Plainfield, Illinois. The brand is known for its plant-based grocery items, plant-based catering services and the delivery of carefully designed plant-based dishes, dips and seasonal fruit, and vegetable trays from local vendors.
READ: PlantX Life launches its e-commerce platform in the UK
"We are extremely proud to welcome Peter Rubi into our growing PlantX family under the increasingly iconic XMarket brand", PlantX founder Sean Dollinger said in a statement.
"Building on Peter Rubi's influential presence in the Chicagoland area, this accretive acquisition gives PlantX access to an impressive new community in and around the third-largest city in the US, while solidifying our e-commerce market presence and impact in the Midwestern US.
“The new acquisition, alongside our ongoing partnership with Chicago Bears Quarterback Justin Fields, one of America's most beloved plant-based athletes, demonstrates PlantX's unique approach to building a sustainable legacy in the US."
PlantX said it intends to relaunch both Peter Rubi retail locations under the company's "XMarket" brand. It noted that Peter Rubi's mission to improve health and wellness through plant-based living is highly aligned with the company's XMarket vision and operating model for its brick-and-mortar locations.
The stores will be operated in collaboration with the founders of Peter Rubi who have extensive operational experience in establishing a sustainable plant-based infrastructure in the US.
It said the Illinois stores will also serve as new storage and fulfillment centers that will diversify the company's distribution capabilities including assisting with orders processed through www.PlantX.com. The locations will also feature the XMarket interactive shopping model to help expand PlantX brand awareness.
In line with the XMarket e-commerce enhancing strategy, PlantX said it will leverage Peter Rubi's warehousing facilities, operational potential, extensive customer base, and plant-based merchandising expertise to boost its e-commerce growth in the US.
Based on its third-quarter 2021 unaudited financials for the three months ended September 30, 2021, PlantX said Peter Rubi operates at a yearly revenue run-rate over $7 million.
It acquired the Peter Rubi assets in exchange for US$1.2 million in cash plus 9,188,897 common shares at a deemed price of $0.2774 per share. The consideration shares will be issued and delivered to the vendors over 18 months, it said.
In connection with the purchase agreement, PlantX said it has agreed to pay a finder's fee of 1,029,156 common shares at a deemed issue price of $0.2774 per share to the founder of the company.
It has also agreed to pay a financial advisory fee of US$18,000 in cash and an aggregate of 166,763 common shares at a deemed issue price of $0.2774 per share to an arm's length financial advisor.
PlantX also announced that it intends to complete a non-brokered private placement of up to $10 million in unsecured convertible debentures of the company. The debentures will be convertible into units of the company at the lesser of a 20% discount to the closing market price of its shares on the Canadian Securities Exchange (CSE) and the maximum permissible discounted price on the conversion date under the policies of the CSE. The debentures will mature and become repayable 24 months from their date of issuance and bear interest at a rate of 12% per annum.
PlantX said it intends to use the proceeds from the offering for general working capital purposes.
Vancouver-based PlantX styles itself as the digital face of the plant-based community with a one-stop destination for all things plant-based, like an online shop and meal delivery services.
The online shop houses over 5,000 vegan products, and its recently added meal service delivers chef-created dishes straight to the doors of Western Canada. The company offers more than 10,000 plant-based products.
Contact the author at stephen.gunnion@proactiveinvestors.com