Bevo Agro has signed an Arrangement Agreement dated October 4, 2018 with Sun Pharm for a reverse take-over of Bevo.
The Transaction involves three main elements:
- the amalgamation of Sun Pharm with a wholly-owned subsidiary of Bevo, with Sun Pharm shareholders receiving Bevo shares representing 86% of the outstanding Bevo shares (the expected exchange ratio being one Bevo share for each Sun Pharm share) and the existing Bevo shareholders continuing to hold Bevo shares representing a 14% interest in Bevo.
- a plan of arrangement under which Bevo will distribute its interest in Cubic to the shareholders of Bevo, with Bevo shareholders expected to receive one common share of Cubic for every Bevo share held.
- Bevo changing its name to Zenabis Global Inc. (“Zenabis,” being one of Sun Pharm’s established brands in the cannabis industry).
The transaction was unanimously approved by the board of directors of Bevo. Shareholders holding approximately 58% of Bevo’s common shares have entered into voting agreements committing to vote their Bevo common shares in favour of the transaction.
Zenabis
Sun Pharm is currently a privately-held cannabis company which has one of the largest, federally licensed indoor medical cultivation footprints in Canada, operating two licensed production facilities in British Columbia and New Brunswick, with a third expected to be coming online shortly in Nova Scotia. These facilities encompass 660,000 square feet of indoor pharmaceutical grade cannabis production space, strategically positioned on Canada’s coasts, facilitating national distribution and access to international markets. Sun Pharm has received purchase agreements for recreational cannabis from each of the British Columbia Liquor Distribution Branch, New Brunswick Liquor Corporation, Nova Scotia Liquor Corporation, and Yukon Liquor Corporation.
Following the completion of the Transaction, Bevo’s greenhouse facilities in Langley are intended to be expanded and retrofitted to integrate advanced propagation technologies and state-of-the-art lighting and ventilation systems. On completion of the expected expansion of these greenhouse facilities, Zenabis will have 660,000 square feet of indoor space and 2.8 million square feet of state-of-the-art greenhouse space in three provinces – British Columbia, New Brunswick and Nova Scotia.
Proposed management team
It is currently anticipated that the management of the resulting issuer will include each of Rick Brar (Chief Executive Officer), Leo Benne (Chief Growing Officer), John Hoekstra (Chief Financial Officer), Mike McGinty (Chief Administrative Officer) and Kevin Coft (Chief Facilities Officer).
Rick Brar – Chief Executive Officer
Mr. Rick Brar is an experienced business leader in the cannabis, nutraceutical, beverage, consumer packaged goods, agriculture, land development and construction sectors. Mr. Brar has international expertise in emerging market sectors, having incubated and grown several companies over his career. He is experienced in sales and marketing, with demonstrated success in corporate sales growth, new market penetration, new product development, and long range planning. Mr. Brar was previously the Chief Executive Officer of International Herbs Limited, where he led one of the largest herb companies in North America for nine years.
Leo Benne – Chief Growing Officer
Mr. Leo Benne is currently Vice President and a Director of Bevo, and the General Manager of Bevo Farms Ltd., the company’s wholly owned subsidiary. Mr. Benne gained advanced knowledge of modern horticultural methods at Rijks Middelbare Tuinbouwschool in Holland. Mr. Benne has overseen every stage of the company’s operations, from planting to shipping. He has been with Bevo for over 25 years.
John Hoekstra – Chief Financial Officer
Mr. John Hoekstra is the Executive Vice President and Chief Financial Officer of Bevo Agro, where he oversees all finance, administration and accounting activities. He joined Bevo in 2004, shortly after the company went public. Prior to joining Bevo, Mr. Hoekstra worked as Supply Chain Manager at Air Liquide Canada, and at Unitor Ships Service as Branch Manager. He is a Chartered Professional Accountant (CPA, CGA) and holds a Business Administration degree from Redeemer University.
Mike McGinty – Chief Administrative Officer
Mr. Mike McGinty has extensive experience in large-scale coordination and planning. Previously, he was a post-graduate tutor in leadership and planning for senior government and military staff from Canada and over 25 allied nations worldwide. Mr. McGinty was a senior officer in the British Army and served widely overseas, including in Iraq and Afghanistan, where he was responsible for more than 1,000 people with $2 billion in capital assets. Mike remains an active member of the Canadian Armed Forces. He also served as the Head of Risk and Security for UBC Okanagan.
Kevin Coft – Chief Facilities Officer
Mr. Kevin Coft is an operational and supply chain professional with over 30 years of Canadian and international procurement, facility operations, and managerial experience. His industrial expertise covers a wide range of functions including navigating Health Canada’s regulatory licensing, team development, facility construction, strategic analysis, import/export operations, logistics, warehousing, customer relationship management, benchmarking, and business systems analysis.
“Our primary goal with this merger is to expand Zenabis’ capacity to supply high-quality cannabis for worldwide distribution. We will achieve this by taking advantage of Bevo’s greenhouse growing expertise to cultivate high-quality cannabis,” said Mr. Brar. “This is a unique partnership that gives Zenabis a significant advantage among Canadian producers as we continue to grow our business to meet Canadian and international demand.”
“This transaction represents a positive growth opportunity for Bevo Agro, as Zenabis intends to invest up to $100 million to expand our greenhouse facility to provide state-of-the-art cannabis production capacity, while maintaining our existing propagation and floral business,” said Mr. Benne. “This partnership will bring new jobs and economic opportunities to the communities in which we operate, while we continue to support the local and international food and floral markets.”
Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Acquisition of additional greenhouse operations and land
Bevo has also entered into a purchase agreement with an arm’s length third party to acquire 10.4 acres of greenhouse operations on 50 acres of land in Aldergrove, British Columbia. Post-amalgamation, Zenabis intends to use this greenhouse acreage to ensure continuity for existing Bevo propagation customers. The greenhouse acquisition is subject to customary closing conditions and is expected to close prior to December 31, 2018.
For more information:
Zenabis
[email protected]
www.zenabis.com
Bevo Agro
www.bevofarms.com