The target companies are active players in the ingredients and CPG food markets with a combined 2020 revenues of C$57.4 million
Rockshield Capital Corp. has entered into a letter of intent with Novel Agri-Technologies to assume Novel’s contractual rights to acquire 100% of Sapientia Technology, a 100% of an unnamed pulse processor, and 75% of organic superfood company Boku International. The target companies are active players in the ingredients and CPG food markets with combined 2020 revenues of C$57.4 million.
The CSE-listed investment firm said the acquisition is aligned with its strategy to focus on plant-based foods, food alternatives and vegan-friendly alternatives with sustainable competitive advantages.
Rockshield believes the plant-based food market is highly fragmented, presenting an opportunity to extract significant value by investing in certain complementary entities to give its shareholders unique access to investments in a vertically integrated plant-based seed-to-market platform. The move, Rockshield said, will be the first of its kind in North America.
Rockshield’s plant-based investment thesis is to develop a seed-to-market operation that includes raw ingredients, processing, pulse fractionation, unique IP, and premium consumer packaged goods.
Rockshield’s Nutrition One
Building on the acquisitions, Rockshield seeks to create Nutrition One, a completely vertically integrated seed-to-market division, providing investors with significant exposure to the entire plant-based value chain, from raw ingredients to CPG products.
After completing the acquisitions, the pulse processor will operate under the name Prairie Plant Farms Ltd. while Boku and Sapientia will operate as The Healthy Table Superfoods Inc.
“These investments cement Rockshield’s entrance into the rapidly expanding plant-based industry,” said company director Nick Demare. “Rockshield aims to not only provide shareholders with a comprehensive seed-to-market operation led by a proven team with 100 years cumulative sector-specific experience, but also large-scale revenue and immediately accretive positive cash flow.”
Pulse crops include dried peas, fava beans, lentils and chickpeas; and processing pulses through processes such as fractionation and extrusion creates the main proteins used in the majority of plant-based products on the market today. Examples of this include, Beyond Meat, Impossible Foods, and the largest ingredient supplier in the world, Ingredion, and many of the other companies’ products.
Rockshield said the forecast revenue of the target companies is C$68.9 million in 2021.
Subject to closing, the transaction is expected to be immediately accretive to Rockshield shareholders, with a gross profit of C$11.8 million and a positive EBITDA of C$6.2 million for the same period.
Date published: 30 April 2021