TORONTO, Sept. 27, 2021 /CNW/ - Aegis Brands Inc. (TSX:
AEG) ("Aegis") is pleased to announce the completed transaction
(the "Transaction") with Kiaro Holdings Corp. (TSXV: KO)
("Kiaro''), a national cannabis retailer and wholesale distributor,
acquiring all the issued and outstanding shares of Aegis'
subsidiary, 2734524 Ontario Inc. (dba Hemisphere Cannabis Co. or
"Hemisphere"), which comprises a portfolio of seven retail
locations in Ontario and two more
locations subject to potential future development.
In consideration for 100% of Hemisphere's common shares, Kiaro
issued to Aegis 61,300,000 common shares of Kiaro (the "Kiaro
Shares"), having an aggregate value of $6.13
million based on the closing price of the Kiaro Shares on
September 24, 2021, and 6,700,000
common share purchase warrants, with each warrant exercisable for
one additional Kiaro Share at an exercise price of $0.16, subject to customary adjustments. Aegis is
also entitled to receive a further 6,700,000 Kiaro Shares on
achievement of certain commercial milestones concerning the
existing seven locations within the first year following the
closing of the transaction.
AEGIS HOLDS 25 PER CENT OF KIARO'S COMMON SHARES
The 61,300,000 Kiaro Shares issued to Aegis at closing represent
approximately 25% of the Kiaro Shares, and Aegis is now Kiaro's
largest shareholder. Prior to the closing of the sale transaction,
Aegis held no Kiaro Shares. Further, Aegis' CEO Steven Pelton has joined the Kiaro board of
directors.
A copy of the early warning report with additional information
in respect of the foregoing will be available on SEDAR at
www.sedar.com and from Melinda Lee
at investors@aegisbrands.ca.
THE FUTURE OF AEGIS
With the completed Hemisphere transaction and the sale of Second
Cup in April, the next chapter of Aegis' transformation is
underway. As North America starts
to return to pre-pandemic activities, Aegis is eager to expand its
presence in the food and beverage sector through acquisitions and
partnerships with great brands across North America.
"The completed transaction of Hemisphere means that Aegis can
remain focused on acquisition and growth in the food and beverage
space. We will partner with incredible brands and management teams
to innovate, reposition and expand in this industry," said
Steven Pelton, President and CEO of
Aegis Brands Inc. "We know that the team at Kiaro will use their
cannabis industry expertise to successfully grow the business in a
highly competitive market."
Consumers are enthusiastically returning to food service
locations following a period of household savings and fewer food
service options from which to choose. This return of consumers to
food service locations has the potential to create a profitable
environment for the operators in the space and highlights Aegis'
opportunity to consolidate great restaurant companies and the
entrepreneurs behind them.
Additionally, the sale of Hemisphere to Kiaro enables Aegis to
increase its focus on the growth of its Bridgehead Coffee brand and
execute its wholesale, e-commerce, and new Coffeehouse strategies.
The sale transaction also enables Aegis to retain an investment in
retail cannabis, and is a positive step toward optimizing value in
its cannabis business.
"The closing of the transaction is a significant moment for
Kiaro. Kiaro's past operational successes combined with our
objective of exponential revenue and EBITDA growth demonstrate our
performance advantage within the Cannabis Industry," stated
Daniel Petrov, Chief Executive
Officer of Kiaro. "We would like to thank Aegis for its partnership
and are eager to see its transformation within the food and
beverage space."
Aegis Brands Inc.
Aegis Brands Inc. currently owns and operates Bridgehead Coffee.
The company's vision is to build a portfolio of amazing brands that
can grow and flourish with access to our resources and expertise.
The company is committed to letting each brand operate
independently while providing shared expertise to help them thrive.
For more information, please visit aegisbrands.ca.
Aegis' head office is located at 210 Shields Court, Markham, Ontario, L3R 8V2.
Kiaro Holdings Corp.
Based in Vancouver, British
Columbia, Kiaro is an independent, omni-channel cannabis
retailer and distributor. Through existing storefronts across
British Columbia, Saskatchewan, Ontario and with the completion of the recent
acquisition of Hemisphere Cannabis from Aegis Brands, Kiaro has 16
stores in operation and another two expected by Q1 of 2022. This is
in addition to a wholesale distribution division servicing
Saskatchewan; ecommerce sites in
Canada, the US and Australia; and plans for continued national
expansion. Kiaro is driven to introduce new and experienced
consumers to a lifelong exploration of cannabis. With more than 70
years of collective retail and wholesale focused experience,
Kiaro's leadership team has a proven track record of growing brands
across North America and plans to
open multiple retail locations nationwide over the coming
years.
Kiaro's head office is located at 300-110 East Cordova Street,
Vancouver, British Columbia, V6A
1K9.
Kronos Capital Partners acted as financial advisor to Aegis
Brands Inc with respect to the transaction. Haywood Securities
acted as financial advisor to Kiaro Holdings Corp. with respect to
the transaction. MLT Aikens LLP as legal advisor to Kiaro Holding
Corp. and Goodmans LLP acted as legal advisor to Aegis Brands
Inc.
Forward-Looking Information
This news release contains forward-looking statements with
respect to Aegis and Kiaro and their subsidiaries, including
statements regarding the nature of Aegis' growth strategy, Aegis'
execution on its potential growth plans, the achievement of certain
commercial milestones, potential future growth of Kiaro's revenue
and profitability, Kiaro's expectations regarding the achievement
of exponential revenue and EBITDA growth, the return of consumers
to food service locations and the profitable food service
environment.
These statements are based on current expectations, are
provided in reliance on certain assumptions that it believes are
reasonable at this time, and are subject to known and unknown
risks, uncertainties and other factors (including risks related to
Aegis' growth strategy; risks related to the COVID-19 pandemic;
risks relating to the ability of Kiaro to successfully integrate
Hemisphere and risks related to realizing the expected synergies
and revenue and EBITA growth; and other risks inherent in the
industry in which Aegis and Kiaro operate) which may cause the
actual results, performance or achievements of Aegis and Kiaro and
their subsidiaries to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
Aegis is under no obligation to update any forward-looking
statements contained herein should material facts change due to new
information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Aegis Brands Inc.