Vejii Holdings (CSE:VEJI) Ltd announced that it has entered into a share purchase agreement to acquire VEDGEco USA Inc — a leading online business-to-business wholesale platform for plant-based products.
The Vancouver, British Columbia-based company said the transaction will significantly augment Vejii's offering of plant-based brands, which have, through ShopVejii.com and VeganEssentials.com, leveraged Vejii's platform for sales, marketing, and order fulfillment and distribution across the US and Canada.
"VEDGEco launched as one of the first online wholesale platforms dedicated to providing restaurants and independent grocers with a large selection of high-quality plant-based options," said Kory Zelickson, CEO of Vejii said in a statement.
Zelickson added: "This meant that small business owners could at last gain access to a large selection of plant-based products and ingredients without the requirements that typical larger national distributors have in place, such as large minimum order sizes."
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The transaction is expected to drive synergies across purchasing, customer service, technology, and logistics for Vejii and VEDGEco, the company added.
Vejii said it will also be able to leverage VEDGEco's existing facilities in Hawaii, Northern California and Georgia, while providing VEDGEco with access to its facilities in Texas, Wisconsin, and its soon-to-be operational third-party logistics operation in Southern California.
"The acquisition of VEDGEco will allow us to add a new revenue stream while increasing our buying power and margins with large brands, and also adding tremendous value for the brands on our platform." said Darren Gill, chief operating officer of Vejii
Gill told investors that as restaurants and grocers expand their plant-based offerings, “we will be strategically positioned to serve them while helping plant-based brands scale their businesses by offering those brands access to national distribution through the VEDGEco wholesale platform."
The company will acquire 100% of the issued and outstanding shares of VEDGEco from the shareholders of VEDGEco. The total purchase price for the purchased shares will be US$6.25 million payable on the date of the closing of the transaction. The company will issue such number of common shares of Vejii with a deemed value of $3.5 million to the vendors, as determined based on a price per consideration share of the greater of C$0.35 per consideration share, and the closing price of the shares on the Canadian Securities Exchange.
Vejii noted that the earn-out payments up to a maximum of US$2.75 million payable in common shares, priced in the context of the market, are to be issued to the vendor upon VEDGEco meeting certain milestones as more particularly set out in the purchase agreement.
The transaction is expected to close on or around December 31, 2021.
"I built VEDGEco out of a necessity, given the limited plant-based options available in the small and local grocers and restaurants where I live in Kailua, Hawaii," said Trevor Hitch, CEO of VEDGEco.
He concluded: “With VEDGEco, our mission is to make plant-based options more broadly available by making them accessible to thousands of local restaurants across America. This access gives owners the ability to test products on their menu through our easy-to-use platform, without the need for long-term commitments or high, minimum order volumes.”
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