LiveWell Canada to Acquire Acenzia

Published: October 8, 2018

LiveWell Canada to Acquire Acenzia

LiveWell Canada Inc. signed a binding letter of intent (LOI) to acquire 100% of Acenzia Inc., a leading developer and manufacturer of next-generation natural health products located strategically near the Canada/US border near Windsor, Ontario. The Transaction is part of LiveWell’s vision to become a world leader in health and wellness through quality outcomes and strategic partnerships. LiveWell is an innovative Canadian hemp and cannabis company focused on advanced research in CBD and other cannabinoids, as well as developing and distributing prescription and consumer health products supported by data, discovery, science and technology.

Blending science and advanced manufacturing, Acenzia is an innovator in rapid product development, as well as personalized diagnostics and therapeutics specific to particular medical conditions. These capabilities will further LiveWell’s leadership in health-related research in cannabis and hemp, and fast-track its product development at a lower cost than conventional product development.

As legalization and acceptance of CBD accelerates at a rapid pace globally, the demand for CBD products to improve health and wellness is exploding. LiveWell has conducted major research on CBD, a white paper on CBD from Industrial Hemp, and is investing in technologies for the extraction and isolation of CBD and other cannabinoids for use in prescription and consumer health products.  As previously announced, LiveWell has secured inventory of hemp biomass for its own products and to sell as isolate for delivery in 2019.

Strategically located 15 kilometres from the Canada-U.S. border, in Tecumseh, Ontario, Acenzia researches and manufactures next-generation natural health products, such as powders, sports drinks, functional foods, probiotics and other therapeutics, as well as individualized diagnostics. Acenzia’s 36,000-square-foot facility includes 20 state-of-the-art, pharmaceutical-grade clean rooms. It is certified by Health Canada, and has NSF certifications for Good Manufacturing Practices (GMP), for Sport, is a USDA-Certified Organic Manufacturer and is an FDA-registered facility.  The company has achieved several significant milestones, including:

  • a global-patented in-vivo zebrafish research model for pre-clinical trials, allowing more rapid product development at a lower cost
  • an easy-to-access diagnostic toolkit that enables consumers to measure product efficacy at an individual level
  • a new patent-pending delivery technology (oral time-released pouch) for the sports nutrition market in a partnership with PRO-DIP. The company is entering a 10-year exclusive manufacturing agreement for this technology, and receives 6% of gross sales revenue
  • evidence-based nutritional supplement manufactured with batch-to-batch efficacy

Of particular note is its global-patented animal research model using zebrafish modified to mimic the human body. The zebrafish models allow for faster, more economical and effective trials that maximize safety and efficacy. Importantly, the research model optimizes product development to meet functional outcomes. Acenzia is currently applying its global-patented zebrafish research model to oncology, to predict metastasis and support therapeutic decisions, and it holds much wider applications, including cannabinoids.

“The acquisition of Acenzia represents an opportunity for proprietary brand insight and product innovation,” said David Rendimonti, President of LiveWell Canada. “Such next-generation therapeutics can be paired with easy-to-access diagnostics that enable evaluation of the product efficacy at an individual level. These innovative products fall into a category of their own.”

In addition to Acenzia’s research, product development and manufacturing expertise, LiveWell welcomes the addition of Acenzia’s leadership to its team. Dr. Indrajit Sinha and Grant Bourdeau are the co-Founders and co-Presidents of Acenzia. “Indrajit is a very strong researcher and Grant is a very capable manufacturer, and together create a strong culture that aligns with LiveWell,” said Mr. Rendimonti.

Acenzia’s Mr. Bourdeau said the Transaction brings together “like-minded partners to realize the vision of improving the outcome of individuals’ health optimization.” Adds Dr. Sinha: “We are an innovative company with a big dream. To put the pieces together – manufacturing and research to commercialize – is difficult. To go the next level you need a strategic partner who understands customers’ needs, with knowledge of the market. LiveWell brings us that.”

Transaction Summary

  • Total purchase consideration is set at $20 million$2 million cash paid at closing and $18 million in common shares of LiveWell based on the 20-day weighted average immediately prior to the date of the definitive agreement.
  • $8 million of the $18 million in common shares will be held in escrow and will be released subject to achieving profitability milestone for calendar 2019.
  • Acenzia’s revenue for the four month ended August 31, 2018 was $2.9 million and for the fiscal year ended April 30, 2018 its revenue was $5.6 million (unaudited).
  • A finder’s fee of 0.5% will be payable from the cash consideration at closing.

LiveWell Board has unanimously approved this arm’s length Transaction subject to due diligence, standard closing conditions, and TSXV approval.  No approval of shareholders from either Acenzia or LiveWell is required in connection with this Transaction.  This Transaction is expected to close on or before November 30, 2018.