On May 12, 2021, EarthRenew Inc. (CSE:ERTH; OTCQB:VVIVF) (“EarthRenew”), a sustainable agtech company, announced the closing of its acquisition of Replenish Nutrients Ltd. (“Replenish”). As part of the private acquisition, EarthRenew acquired all of the issued and outstanding securities of Replenish from the securityholders (the “Transaction”) at a price of approximately $9 million (subject to certain adjustments for working capital and indebtedness outstanding on the completion date of the Transaction), payable as $1.41 million in cash and a total of 21,264,093 common shares of EarthRenew at a deemed price of $0.248 per EarthRenew common share. Such consideration includes amounts to satisfy approximately $2.8 million of loans owed by Replenish to certain Vendors.
As additional consideration, the Company agreed to pay to certain of the Vendors:
- ongoing earn-out payments totalling an aggregate of up to $7 million based on qualifying gross annual revenue of Replenish multiplied by an earn-out factor for each of its 12-month fiscal periods ending June 30, 2025 payable by a combination of cash payments and the issuance of common shares of EarthRenew (the “EarthRenew Shares”), provided such Vendors continue to be bound by consulting or employment agreements entered into with the Company; and
- supplemental earn-out payments of an aggregate amount of up to $2 million based on certain sales parameters, which shall be payable by a combination of cash payments and the issuance of EarthRenew Shares and evidenced by promissory notes that have been issued to such Vendors.
Replenish is a privately held generative fertilizer company located in Okotoks, Alberta.
Miller Thomson advised Replenish on the Transaction with a team led by Shashi Malik (Corporate Tax), and comprised of Kenneth Phillips, Allen Fowlis and John-David D’Souza (Corporate/M&A); Stephen Torscher (Labour & Employment); and Amanda Robertson (Student).