Progressive Planet Solutions Inc (TSX-V:PLAN) announced that it has closed its previously announced acquisition of Absorbent Products Ltd– manufacturer of mineral-based products derived from diatomaceous earth, zeolite, and bentonite.
The Vancouver-based company said that it will continue to support current Absorbent Products business operations and eco-conscious product lines while retaining all patents and intellectual property rights.
In addition, Progressive Planet intends to advance further development in sustainable cement, crop nutrition, and other areas.
READ: Progressive Planet closes first tranche of private placement for gross proceeds of $4.01M
"This acquisition strengthens our leadership base and will help accelerate our sustainable innovation growth opportunities," said Steve Harpur, CEO of Progressive Planet in a statement.
He added: "We've now secured access to rich supplies of natural pozzolans including diatomaceous earth, bentonite, and zeolite, all of which are key to our providing the next generation of materials, many of which have the added benefits of helping to minimize carbon footprints, improve biodiversity and sequester greenhouse gasses.”
With the completion of the acquisition, the company told its investors that its head office will relocate to Kamloops, British Columbia to be closer in proximity to its current and newly acquired mineral properties.
Under the acquisition, the company assumes control of all the outstanding securities of Absorbent Products. At closing, the company paid the former Absorbent Products shareholders $8,922,933, assumed $2,118,231 of debt, and issued 3,428,570 common shares at a price of $0.35 per share. The shares issued have a four-month hold period expiring June 19, 2022.
An additional $1.8 million will be paid in equity consideration on an annual basis over the next two years, with shares to be issued at a deemed price per share equal to the greater of $0.35 per share or the 50-day volume-weighted average trading price of the company's common shares in the days immediately preceding each issuance.
The company also anticipated a second and final tranche of its private placement offering of units to close on Wednesday, February 23, 2022.
The second tranche will be for a minimum of 6 million additional units, each unit being comprised of one common share and one warrant exercisable at $0.60 per year for a period of two years from issuance. If in the second year of the exercise period, the company's common shares trade on the TSXV for greater than $0.75 per share for a period of ten trading days, the exercise period may be accelerated.
Proceeds from the second tranche closing will be used to assist retirement of the Absorbent Products debt assumed by the company under the acquisition, or for integrating the company's comminution business into Absorbent Products’ premises as part of its head office relocation, Progressive Planet noted.
Contact Ritika at ritika@proactiveinvestors.com