Canadian packaging group BioEnvelop Technologies Corp, which creates biodegradable means of packaging, has entered into two agreements that it claims will fundamentally improve its ability to realise its European business objectives.
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First, BioEnvelop will recover 100% of the rights to its products and technologies in European markets by acquiring all of the outstanding shares of Interbioenvelop SA that it does not already own in return for 1,001,202 Class “A” common shares.
Interbioenvelop is the company’s 50%-owned French affiliate that holds the European sub-licence for the production and marketing of BioEnvelop’s Longevita(TM) coating solution technology.
The transaction, which is subject to regulatory approval, is expected to close by the end of May 2002. The valuation used to settle the terms of the transaction is based on an arm’s length evaluation of Interbioenvelop by Nascendo SA, and on commercial negotiations between BioEnvelop and the French shareholders of Interbioenvelop.
Second, BioEnvelop has signed a memorandum of understanding with Swiss-based food company Obipektin AG under which Obipektin will become the exclusive distributor of BioEnvelop’s Longevita(TM) coating solutions in England, Germany and Switzerland. Based on the success of Obipektin in these selected markets, additional countries may be added later. The distribution agreement, which has an initial four-year term, calls for minimum target volumes to be met in order for Obipektin to retain its exclusivity.
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By GlobalDataThese volumes and other terms of the memorandum of understanding are subject to final drafting of the agreement, which both sides have committed to complete by 30 June 2002.
“This shift in strategy reflects our growing understanding of the food processing industry in Europe,” said Nagui Naoum, president and CEO of BioEnvelop. “By shifting from a licensing strategy to a distribution strategy, we regain full control of our product and technology in European markets, which are growing rapidly in the sectors in which we do business. We will benefit directly from the expertise and distribution capacity of experienced operators in the food ingredients market in our target countries.”
“We are tremendously appreciative of the effort and support that we have had from our French partners these past few years. They were among the first to believe in BioEnvelop and they invested time and money in BioEnvelop to help us grow the company. We welcome their continuing participation as shareholders,” said Naoum.
