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Avant Brands Inc. (OTCQX:AVTBF) (TSX:AVNT)(FRA:1BU0), announced that 1000343100 Ontario Inc., an entity of which Avant owns 50% of the issued and outstanding shares, has entered into a stalking horse purchase agreement to acquire all of the issued and outstanding shares in the capital of The Flowr Group (Okanagan) Inc., a subsidiary of The Flowr Corporation (OTCEM:FLWPF) (TSX:FLWR), in connection with the Flowr Group's proceedings under the Companies' Creditors Arrangement Act and its related sales and investment solicitation process.
The authorization by Flowr Okanagan and The Flowr Canada Holdings ULC to enter into the stalking horse purchase agreement and its acceptance as the stalking horse bid is subject to approval by the Ontario Superior Court of Justice. It is also anticipated that the purchaser will change its name to Avant Brands K1 Inc. prior to closing.
The stalking horse purchase agreement was entered into between the purchaser, Flowr Okanagan and Flowr ULC. The purchase price payable by the purchaser for the purchased shares pursuant to the stalking horse purchase agreement shall be equal to $3.9 million plus an amount reasonably necessary to fund the cash requirements of the Flowr Group to close the transactions, if any, and the assumption of certain liabilities set out in the stalking horse purchase agreement, as may be adjusted in accordance with its terms.
If the transaction contemplated by the stalking house purchase agreement closes, the Flowr Okanagan facility would increase Avant's overall square footage of cultivation facilities to approximately 185,000 square feet, and thereby increasing Avant's annual production capacity by approximately 60%. It is anticipated that Avant will be one of the largest indoor producers in Canada of indoor grown, cannabis.
In the event the purchaser is not the winning bidder under any such auction, the stalking horse purchase agreement will be terminated, and the purchaser will be entitled to payment of a break-up fee in the amount of $185,000, following closing of the winning bid.
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