After kicking off the week by announcing new brand ambassadors, BioSteel Sports Nutrition, a subsidiary of Canopy Growth, has more news to reveal. According to recent updates, the athlete hydration firm has just closed a deal to buy a facility located in Verona, while also entering into a joint manufacturing agreement.
Through the deal, BioSteel will now own all of the assets of Flow Beverage’s production facility located in Verona, VI. The transaction, valued at $19.5 million, will be paid in two parts: $6.3 million for the repayment of debt and retirement of lease obligations and $13.2 million in cash.
In order for the transaction between the two parties to be efficient and the utilization of the facilities to be supported, BioSteel and Flow also decided to enter into a joint manufacturing agreement (JMA). The terms of this deal state that BioSteel will be responsible for producing Flow’s branded water portfolio at the newly acquired facility, as well as the production of BioSteel-branded sports hydration beverages.
It was made clear that there will be no layoffs, as active employees at the site will become part of BioSteel’s workforce once the post-closing transaction period is completed. As usual, all of this is subject to various conditions and pending approvals.
“The sale of the Verona production facility is a major milestone towards achieving profitable growth of the Flow brand, stated Nicholas Reichenbach, founder and CEO of Flow. He added, “Through a significant reduction in our operating expenses associated with operating Verona and a material reduction in related future lease obligations, we have meaningfully improved our financial position and streamlined our organization.”
Bruce Jacobson, president of BioSteel, stated that lately, the brand has been going through a significant growth momentum. Therefore, the transaction allows it to access greater efficiencies in its business as it continues its quest for a complete vertical.