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EarthRenew Upsizes Its Previously Announced Proposed Acquisition of Replenish Nutrients Equity From 38% to 100%

HIGHLIGHTS:


EarthRenew has negotiated an increase in its potential equity ownership interest in Replenish Nutrients from 38% to 100%.



The proposed acquisition is expected to provide EarthRenew with top line revenue, an existing customer list and distribution channels to sell fertilizer and soil solutions in Western Canada and the U.S.



Replenish Nutrienta??s senior management teama??s experience, technical expertise and existing relationships are expected to enhance EarthRenewa??s operational capacity.A 

TORONTO, Feb. 18, 2021 (GLOBE NEWSWIRE) -- EarthRenew Inc. (CSE: ERTH; OTCQB: VVIVF) (a??EarthRenewa?? or the a??Companya??) is pleased to announce that, further to its press release dated January 13, 2021 (EarthRenew to Acquire Stake in Replenish Nutrients LTD., A Leader in Crop Inputs and the Soil Solution Space), the Company has negotiated an increase to its proposed equity ownership stake from 38% to 100% of the issued and outstanding shares (the a??Proposed Acquisitiona??) of Replenish Nutrients Ltd. (a??Replenish Nutrientsa??), a privately held regenerative fertilizer and nutrient company located in Okotoks, Alberta. The Company has entered into a new non-binding letter of intent which supersedes and replaces the letter of intent dated December 11, 2020 respecting EarthRenewa??s proposed 38% equity acquisition.EarthRenewa??s CEO Keith Driver explained, a??The outcome of the diligence process was that it became apparent to both parties that we were more aligned with our collective vision than we originally thought, and the natural next step was for EarthRenew to become much more than a minority owner of Replenish Nutrients. If consummated, acquiring full ownership is anticipated to allow us to not only add top line revenue and accelerate phase two of our construction plans, but also to invest in the growth of Replenish Nutrienta??s manufacturing capacity to address a supply gap for their product. We look forward to the potential to work with the entire Replenish Nutrients team to accelerate growth of the new combined entity, leveraging their experience in the fertilizer and soil solution space.a??Upon completion of the Proposed Acquisition, the Replenish Nutrients team intends to support all aspects of the marketing, distribution and sales, including of EarthRenewa??s products, into the regenerative agriculture space. Replenish Nutrients currently has an established product line that it sells across Western Canada and the U.S. (North Dakota and Montana), which generates strong revenues.Following closing of the Proposed Acquisition, the combined company is projected to become a leader in the regenerative and organic fertilizer space. We expect that the combined entity will have the capacity to manufacture, market and distribute a broad range of high-value crop inputs. Replenish Nutrients booked revenue of $5.1 million for the last six months of 2020 and through the end of January 2021 with a gross margin of approximately 30%. The company is forecasting $4.8 million in revenue for the balance of the first half of 2021. This equates to a total of $9.9 million for the period of July 2020 through June 2021, up from $3.6 million for the same period in 2019/2020.A A  Consideration for the Proposed Acquisition is approximately $1.1 million in cash and $7.9 million in common shares of EarthRenew.
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