Israel’s Eshbal Functional Food has closed its purchase of a 55% interest in US low-carb and gluten-free business Dare to Be Different Foods (D2BD).
In a statement yesterday (10 February), the Canada-listed company said it bought the stake in D2BD along with certain assets connected to the company’s operations.
To strike the deal, Eshbal issued 3.6 million common shares at a deemed issue price of C$0.21 ($0.15) per share, implying an aggregate value of C$756,000.
The deal also includes a cash consideration of $248,000. Eshbal said $26,000 was paid at closing, with the balance to be settled via monthly instalments of at least $18,500 over the next 12 months.
Founded in 2012, New York-based D2BD manufactures low-carb and gluten-free frozen products.
Its line-up includes crusts, crisps and gnocchi formulated with broccoli and cauliflower.
The transaction follows discussions that started last year. Eshbal signed a letter of intent in July to buy a majority stake in D2BD.
In November, Eshbal entered into a definitive share purchase agreement to acquire 55% of the company.
When it announced the definitive agreement, Eshbal outlined a structure that included a $248,000 cash purchase of newly issued D2BD shares.
It also planned to buy some shares from existing shareholders for $180,000, to be paid through 1,200,000 Eshbal shares priced at $0.15 each.
Eshbal also said it could issue additional shares later if D2BD met certain performance targets within two years after closing.
In January, the parties amended the terms to add the acquisition of additional D2BD-related assets from D2BD’s managing director Marvin Jemal for $360,000. They also revised the milestone-share terms.
Eshbal supplies foodservice and retail in Israel. It expanded into North America following its reverse takeover with Canada-based Hakken Capital Corp., which also brought a listing on the TSX Venture Exchange.
In August, Eshbal CEO Tomer Bar Meir told Just Food the company was banking on acquisitions in North America to drive growth and triple revenue in the next two years.
Last week, the company acquired the assets of US-based Gluten Free Nation on the second attempt after a deal fell through last year.
In January, Eshbal contracted Canadian company Queen St Gluten Free to produce its gluten-free products for the North American market.
