Stryve Foods LLC, a US-based protein snacks firm, has formed a “definitive agreement for a business combination” with Nasdaq-listed Andina Acquisition Corp. III, a blank-check acquisition company set up in 2019.
Once the transaction is completed, the combined company will trade on the stock exchange under a new name, Stryve Foods Inc., according to a statement today (28 January).
Stryve Foods LLC, founded in 2013 in Dallas, produces snacks made from turkey, chicken, pork and beef, including beef biltong. In 2018, Stryve acquired two US peers – Biltong USA and Braaitime – and snapped up a third, Kalahari Biltong, last month.
According to an investor presentation released alongside the announcement of the proposed deal, Stryve’s unaudited gross revenues for 2020 were $18.2m, excluding any impact from the acquisition of Kalahari. The company is forecasting 2021 gross revenues of $50.8m.
For the purpose of the transaction, both companies have formed “definitive agreements with institutional investors” for a so-called “private investment in public equity” (PIPE), which involves the sale of shares in a publicly-listed company to a private investor. In this case, the PIPE amounts to US$42.5m priced at $10 a share.
The transaction will be funded by a combination of three sources – the PIPE funds, a full equity roll-over from Stryve’s existing shareholders and cash from Andina held in a trust account after redemptions by its public stockholders in connection with the closing of the transaction.
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Stryve said it has also secured a $10.6m bridge note offering with “accredited and institutional investors with funds being made available immediately for general working capital purposes”. The bridge note will convert into common stock immediately prior to the business combination closing.
The investor presentation gave a breakdown of the new business' "illustrative pro-forma ownership", which stated the roll-over equity shares for Stryve Foods LLC's shareholders would amount to 54.6% of the new company. Under the illustrative guidance, shareholders in the special-purpose acquisition company would hold 37.2%.
The snack maker is led by two co-CEOs: co-founder Joe Oblas and Jaxie Alt, who is also chief marketing officer. Another co-founder, Ted Casey, occupies the chairman seat.
Oblas said: "We firmly believe that Stryve is well-positioned to capitalise on favourable better snacking trends as well as the considerable white space for health-driven innovation in what remains a large, fragmented category with underdeveloped channels.
"Our intention is to accelerate Stryve's growth trajectory by capitalising on the strengths of our existing business...We are excited to be partnering with Andina as we transition into the public markets and are committed to enhancing value for all of our stakeholders."
The boards of both companies have approved the transaction, but shareholders in Andina still have to provide their consent. The deal is expected to be completed in the second quarter.
In a joint statement, Luke Weil, the chairman of Andina, and Julio Torres, its CEO, added: "Stryve is a unique and compelling investment opportunity that is changing the way Americans snack and we look forward to joining with them on their mission. With a leadership team that has proven themselves in operating and scaling profitable businesses along with significant tailwinds for functional and nutritious snacking, we believe Stryve is poised for rapid growth and value creation."
Weil is the founder of the first two Andina Acquisition vehicles – Andina Acquisition I and Andina Acquisition II. He was previously head of international business development as US gambling company Scientific Games Corp. Torres, who worked on the first two vehicles as co-CEO and then CEO, is a former director general of public credit and the treasury with Colombia's ministry of finance. Both men have worked in investment banking.
Last July, Andina Acquisition Corp. III announced it had signed a "non-binding letter of intent" with with European cannabis company EMMAC Life Sciences on a proposed combination. Four months later, the companies announced they "mutually terminated" talks.