Ontario-based Sentex Systems Ltd, a player in the emerging Agri-biotech feed additive industry, has announced its planned acquisition of Ottawa-based Natunola Health Inc.

A formal Letter of Intent has been executed and due diligence by both parties has begun. The anticipated transaction is subject to regulatory approval and is expected to close in mid June. The purchase price will be dependant upon the operating results of Natunola over the next three years, with the Natunola shareholders receiving units of Sentex consisting of common shares and convertible preferred shares.

Natunola is a technology driven company founded to develop and market high value-added natural health-related products for various market sectors. It has developed processes for high-margin, high volume applications in the functional food, nutraceutical and value-added feed industries. 

The processing of flaxseed is a primary objective of Natunola in order to capitalise on the rapidly growing market for foods containing Omega 3 fatty acids, lignans and fibers, which contribute to retinal and brain development and may play a major role in reducing cardiovascular disease. The flaxseed kernel is a primary source of Omega 3 fatty acids, while the hull contains very high concentrations of lignans and fibers which may be used in the prevention and treatment of certain diseases, including cancer.

Sentex plans to make a substantial investment in the construction of a flaxseed dehulling plant in Winchester, Ontario, which will enable Natunola to produce kernels and hulls from the flaxseed. The kernels and hulls will be sold as food, functional food, nutraceutical and value-added feed additives.

Natunola will continue to operate as a stand-alone entity for Sentex under the direction of its president and CEO, Dr. Nam Fong Han, who is expected to join the Sentex board upon completion of the transaction.

"The addition of Natunola to the Sentex group will bring increased opportunity and large new markets to Sentex," said Brian Rouleau, president of Sentex.