GreenSpace Brands announces acquisition of Love Child Organics

TORONTO, Sept. 15, 2015 /CNW/ - GreenSpace Brands Inc. ("GreenSpace") (TSXV:JTR), a developer and seller of premium natural food products, announces that today it has signed a share purchase agreement to acquire all outstanding shares of Love Child (Brands) Inc. ("Love Child"), an organic infant and children's food developer and distributor.  The acquisition is subject to a number of conditions, including receipt of TSX Venture Exchange approval. 

"This is a strategic and synergistic acquisition with a shared focus on creating innovative, high quality natural products for children. GreenSpace has been growing at an average of 159% year-on-year since January 2015, and adding a larger business like Love Child, with their rapid growth rate in a complimentary product category, puts us in a great position for continued significant growth," said Matthew von Teichman, President and CEO of GreenSpace Brands Inc. "We are also excited to welcome Love Child's talented team, who has done a remarkable job building their diverse product offering and brand. There is a great opportunity to expand the brand within North America utilizing our shared resources and expertise."

Love Child, which was featured prominently on the CBC show Dragons Den, has had consistently strong revenue growth since it started operations in 2013. Last fiscal year Love Child had net revenue of $5.0 million, an increase of 213% over the previous year.

"Our commitment to create honest, pure and delicious foods that includes nutritionally-rich and natural ingredients have allowed us to differentiate Love Child in the North American market," said Leah Garrad-Cole, founder of Love Child. "GreenSpace is a perfect home for the Love Child brand with their commitment to continue to bring innovative nourishing products to parents in North America and broadening our development and retail capabilities. John and I are excited to join the GreenSpace team and look forward to our ongoing leadership of the Love Child brand."

Under the terms of the share purchase agreement, on closing GreenSpace expects to pay the vendors of Love Child $3 million in cash and issue 1,190,476 common shares in GreenSpace, determined by dividing $1.25 million by $1.05 per share, subject to TSX Venture Exchange approval.  The share purchase agreement also contemplates the issuance of warrants on closing that will be exercisable if the Love Child brand achieves certain revenue thresholds. The share purchase agreement further contemplates that if the Love Child brand achieves certain revenue thresholds two years following closing, an earn-out of GreenSpace shares will be awarded.  

Love Child has total assets of approximately $2.5 million and total liabilities of approximately $2.1 million, which is inclusive of $1.8 million of debt that will be assumed by GreenSpace as part of the acquisition.

GreenSpace is also pleased to announce that today it has signed a non-binding term sheet for a second rank term loan of between $3-4 million (the "Term Loan").  Net proceeds of the Term Loan will be used for the acquisition of Love Child and for general working capital purposes.  The Term Loan will have a 6 month term with the option of GreenSpace to extend to 12 months in certain conditions and is repayable at any time with a minimum interest payment.  In connection with the Term Loan, GreenSpace shall undertake to meet certain minimum working capital requirements and other conditions, and will issue the lender warrants representing 25% of the value of the Term Loan, expiring one year following closing, with an exercise price equal to $1.00 (the 5 day volume weighted average trading price of the GreenSpace shares prior to the date hereof).  The grant of the Term Loan warrants is subject to TSX Venture Exchange approval. 

GreenSpace also plans to complete a non-brokered equity financing for common shares in the capital of GreenSpace at a price of $1.05 per common share for a dollar amount to be determined.  Net proceeds of the equity financing will be used for the acquisition of Love Child.  Completion of the equity financing is subject to customary conditions including TSX Venture Exchange approval. 

GreenSpace expects to close these transactions at the end of September or early October.

About Love Child Organics

Love Child is a Canadian-based producer of 100% organic food for infants and toddlers. Its mission is to bring to market only the purest, most natural and nutritionally-rich food, boosted by superfoods such as Quinoa, Acerola and Chia and without the addition of any synthetic preservatives, refined sugars or other additives. Love Child's products include organic purees in BPA-free squeezable pouches and an extensive infant and toddler organic snack range, available at retailers including Whole Foods, Loblaw, Shoppers Drug Mart, Overwaitea Food Group and Walmart Canada.  For more information, visit www.lovechildorganics.com.

About GreenSpace Brands

GreenSpace is a Canadian-based brand ideation team that develops, markets and sells premium natural food products to consumers across Canada.  GreenSpace owns Rolling Meadow Dairy, Canada's first grass fed dairy product line that has built upon the founding values of Greenspace's original brand, Life Choices.  Life Choices features premium convenience meat products made with grass fed and pasture raised meats without the use of added hormones and antibiotics. GreenSpace also owns Holistic Choice, a premium natural pet food line and Nudge, a line of family favorite foods made better.  All brands are wholly owned and retail in a variety of natural and mass retail grocery locations across Canada. For more information, visit www.greenspacebrands.ca.  GreenSpace's filings are available at www.SEDAR.com.

Forward Looking Information

Certain statements in this press release may constitute forward-looking statements within the meaning of applicable securities laws.  Forward-looking statements include, but are not limited to, statements made under the heading "Outlook" and other statements concerning the completion of the transaction, anticipated approvals, time to closing and results of the completion of the transaction.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events.  Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.  Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements.  Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements including, without limitation, the risks that: (1) the transaction may not be completed for any reason whatsoever, including that regulators may not approve the transaction; (2) the closing may not occur as scheduled or at all; and (3) GreenSpace may not achieve the results currently anticipated. Although GreenSpace believes that the expectations reflected in its forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because GreenSpace can give no assurance that such expectations will prove to be correct.  Details of the risk factors relating to GreenSpace and its business are discussed under the heading "Risks and Uncertainties" in GreenSpace's annual management discussion and analysis dated August 31, 2015, a copy of which is available on GreenSpace's SEDAR profile at www.sedar.com. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by GreenSpace and described in the forward-looking information. The forward-looking information contained in this press release is made as of the date hereof and GreenSpace undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward looking information contained in this press release is expressly qualified by this cautionary statement.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE GreenSpace Brands Inc.

Joanna Longo, Terre Partners, [phone] ext 233, [email protected]; Mathew Walsh, Chief Financial Officer, GreenSpace Brands Inc., [phone] x 222, [email protected]