Breaking News

$PVOT Pivot Pharma Announces Letter Of Intent For Proposed Acquisition Of Agro-Biotech, A Québec-Based ACMPR Licensed Producer




Pivot Pharma Announces Letter of Intent for Proposed Acquisition of Agro-Biotech, a Québec-based ACMPR Licensed Producer

VANCOUVER, British Columbia, Feb. 22, 2018 (GLOBE NEWSWIRE) -- via NetworkWire – Pivot Pharmaceuticals Inc. (CSE:PVOT) (PVOTF) (“Pivot” or the “Company”) is pleased to announce that it has entered into an arm's-length non-binding letter of intent (the “LOI”) pursuant to which Pivot proposes to acquire (the “Proposed Transaction”) Agro-Biotech Inc. (“Agro-Biotech”), a Health Canada ACMPR Licensed Producer located in Saint-Eustache, Québec. Following the completion of the Proposed Transaction, which is anticipated to occur by April 15, 2018, Agro-Biotech will continue to operate on a standalone basis.
The Proposed Transaction contemplates the acquisition by Pivot of: (i) all of the issued and outstanding shares (the “Agro-Biotech Shares”) of Agro-Biotech; and (ii) all of the issued and outstanding shares (the “Property Holdco Shares”) of a separate corporation (the “Property Holdco”) which owns the premises occupied by Agro-Biotech. The consideration to be paid by Pivot to Agro-Biotech’s shareholders for the Agro-Biotech Shares is comprised of: (i) a cash component of $25,000,000 payable in tranches; and (ii) an equity component of 35,000,000 common shares of Pivot to be issued at a deemed price per share of $2.0571 (representing a deemed value of $72,000,000), for an aggregate deemed value for the Agro-Biotech Shares of $97,000,000. The consideration to be paid by the Issuer to Property Holdco’s shareholders for the Property Holdco Shares is a single cash payment of $3,600,000 payable within one year of the closing of the Proposed Transaction. The aggregate deemed value of the Proposed Transaction (for the acquisition of both the Agro-Biotech Shares and the Property Holdco Shares) is $100,600,000.
Pursuant to the Proposed Transaction, Pivot will also undertake to invest $15,000,000 in the development of Agro-Biotech’s business.
There are a number of conditions precedent to the completion of the Proposed Transaction, including, but not limited to, completion of satisfactory due diligence, receipt of all necessary regulatory approvals, including the approval of the Canadian Securities Exchange (“CSE”), and completion of the definitive transaction documentation.
It is expected that Pivot will have to complete a financing in order to satisfy its financial obligations in connection with the Proposed Transaction. Pivot has engaged Origin Merchant Partners as financial advisors in order to assist in obtaining the required financing.
In connection with the Proposed Transaction, Pivot has agreed to pay to Tremblant Management Inc. a finder’s fee equal 2.5% of the deemed value of the Agro-Biotech Shares (2.5% of $97,000,000) payable in common shares of Pivot to be issued upon closing of the Proposed Transaction.
Highlights of the Transaction
Strategic Rationale:
Pivot is a differentiated player in the cannabis industry due to its approach to improving dosing and bioavailability of cannabinoids with proven pharmaceutical and patented formulation and delivery technologies. Upon the addition of Agro-Biotech, the Company will become vertically integrated, controlling the entire manufacturing process from “seed to derivatives” and capturing margin along the entire supply chain.
Upon closing of the Proposed Transaction and Agro-Biotech being granted a Dealer’s License, Pivot intends to extract and sell oils and isolates, formulate pharmaceutical grade preparations, perform analytical testing, undertake research and development, produce and sell derivatives and be able to conduct import and export activities in its Good Manufacturing Process (GMP) facility. This will ensure that our formulators will have the purest cannabinoids needed to develop and commercialize quality products using patented drug delivery technologies from cannabis oils. Securing the upstream supply ensures a competitive advantage for products derived from Pivot’s patented formulation technologies. This includes semi-solid creams, gels, capsules, transdermal patches and ready-to-infuse beverage formulations.
Agro-Biotech Facility:
Agro-Biotech operates a fully licensed, purpose-built, indoor hydroponic cannabis production facility located in Saint-Eustache, Québec, 40 kilometres north of Montréal. Phase I is now complete and Phase II and Phase III are expected to be completed by the end of September 2018, resulting in a total grow area of 75,000 sq. ft., capable of producing a cumulative 10,000 kgs per year.
News Source :
Website :
Stockchart :