Total potential consideration for the acquisition is a combination of cash, restricted equity, a PIK seller note and a one-time earnout payment
Datasys generated revenues of $25.2 million and EBITDA of $9.1 million in 2022
LAVAL, QC, Nov. 20, 2023 /CNW/ - Neptune Wellness Solutions Inc. ("Neptune" or the "Company") (NASDAQ: NEPT), a consumer-packaged goods company focused on plant-based, sustainable and purpose-driven lifestyle brands, today announced it has entered into a non-binding Letter of Intent ("LOI") to acquire Datasys Group, Inc., ("Datasys") and affiliated companies. The non-binding LOI establishes the framework for a potential transaction (the "Proposed Transaction") whereby Neptune would acquire all the outstanding equity of Datasys, subject to diligence, final board approval, shareholder approval and additional terms and conditions.
Datasys is a leading data-marketing company that utilizes artificial intelligence and machine learning to derive intelligence from one of the largest consumer and business data sets in the world. Datasys leverages its expansive data of over 3 billion records and technology to help companies more accurately target their ideal customers and provide intelligent marketing solutions. Datasys' clients include leading global corporations such as Microsoft, Ford, Mastercard and Honda. For full year 2022, Datasys' unaudited results were $25.2 million in revenue and $9.1 million in EBITDA.
Total potential consideration for the acquisition is $112 million in a combination of $20 million in cash at closing, $32 million in restricted equity based on a pre-closing VWAP of the Company's share price on NASDAQ (subject to a minimum of 10 million shares) and restricted until three gradual releases over 10-30 months, a 5-year $31 million PIK seller note (carrying interest at 7%, subject to annual payment of interests, secured by the assets of Datasys, with principal being payable at maturity subject to a 25% discount in the event of early repayment within 22 months) and an earnout payment ranging from $5 million to $22 million, subject to Datasys achieving 2024 EBITDA thresholds between $13 million and $16 million (or greater). Payment by the Company of the deferred consideration, whether in payment of the PIK seller note (both interest and principal) and the earnout payment may be paid in cash or in kind in the form of Company shares, based on a VWAP of the Company's share price at the time of payment.
The LOI sets out the initial proposed terms and conditions pursuant to which the Company and Datasys would effect a business combination that would result in the acquisition of Datasys by Neptune, which anticipates becoming a U.S. corporation in the context of the Proposed Transaction. If definitive documentation for the Proposed Transaction is agreed upon and the transaction is consummated, the Company would continue to operate Datasys' business as a data, analytics, digital media solutions provider and artificial intelligence technology company with several proprietary data sets, multiple marketing channels and a robust marketing cloud. Neptune and Datasys are still in negotiations, have not executed a definitive agreement and are under no obligation to enter into or continue negotiations regarding a definitive agreement relating to the Proposed Transaction.
The Proposed Transaction is subject to the negotiation of definitive documentation between the parties and it is anticipated that closing of the Proposed Transaction would be subject to shareholder approval and additional terms and conditions, including the need for the Company to secure financing for the cash portion of the consideration and satisfactory due diligence by the respective parties. There can be no assurance that a definitive agreement will be entered into or that the Proposed Transaction will be consummated on the terms or timeframe currently contemplated, or at all.
About Neptune Wellness Solutions Inc.
Neptune is a consumer-packaged goods company that aims to innovate health and wellness products. Founded in 1998 and headquartered in Laval, Quebec with a United States headquarters in Jupiter, Florida, the company focuses on developing a portfolio of high-quality, affordable consumer products that align with the latest market trends for natural, sustainable, plant-based and purpose-driven lifestyle brands. The Company's products are available in more than 29,000 retail locations and include well-known organic food and beverage brands such as Sprout Organics, Nosh, and Nurturme, as well as nutraceuticals brands like Biodroga and Forest Remedies. With its efficient and adaptable manufacturing and supply chain infrastructure, the company can quickly respond to consumer demand, and introduce new products through retail partners and e-commerce channels. Please visit neptunewellness.com for more details.
About Datasys Group Inc.
Datasys Group is a leading data, analytics and digital media solutions provider with several proprietary data sets, multiple marketing channels and a robust marketing cloud. By compiling one of the largest consumer and business datasets in the world, Datasys uses its expansive data and technology platforms to help companies more accurately target their ideal customers and provide intelligent marketing solutions. For more information, please visit www.datasys.com.
Disclaimer – Safe Harbor Forward–Looking Statements
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable securities laws. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates, and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.
Forward-looking statements in this news release relate to, among other things: the Proposed Transaction with Datasys, including information regarding the non-binding LOI and the anticipated timing for consummation of the transaction; Datasys' business, the potential benefits of the Proposed Transaction to the Company and its financial condition and results of operations, and the Company's plans if the Proposed Transaction were consummated; and the terms and conditions for the Proposed Transaction, including shareholder approval and the need to secure financing for the cash portion of the consideration. Actual future results may differ materially. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements reflect the beliefs, opinions and projections of management on the date the statements are made and are based upon a number of assumptions and estimates that, while considered reasonable by the respective parties, are inherently subject to significant business, economic, competitive, political and social uncertainties, contingencies and risks, including, among other things: the risk that the Company may not be able to successfully negotiate and execute definitive transaction documents for the Proposed Transaction on acceptable terms, if at all, and the ultimate terms and timing for closing of the Proposed Transaction, which terms may vary from those expressed in the non-binding LOI; the risk that the Company will not be able to successfully consummate the Proposed Transaction; the risk that the Company may not be able to raise sufficient financing for the cash portion of the consideration or obtain any required approvals, including shareholder approval, for the Proposed Transaction; the risk that the Company may not be able to meet the continued listing requirements of Nasdaq which could result in a de-listing of the Company's common shares; and, with respect to the Company, the other risks and uncertainties discussed from time to time in the Company's filings with the Securities and Exchange Commission (the "SEC"), including the risk factors described in the section entitled "Risk Factors" in the quarterly and annual reports that it files with the SEC. Readers should not place undue reliance on the forward-looking statements and information contained in this news release concerning these times. The Company does not assume any obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by applicable law.
Certain supplementary measures in this news release do not have any standardized meaning as prescribed under International Financial Reporting Standards ("IFRS"), which are also generally accepted accounting principles ("GAAP"), and, therefore, are considered non-GAAP measures. In particular, the term " EBITDA" is used in this news release to describe certain financial information contained herein. Earnings before interest, taxes, depreciation and amortization ("EBITDA") is not a recognized performance measure under IFRS or GAAP. The term EBITDA consists of net income (loss) and excludes interest, taxes, depreciation and amortization.
SOURCE Neptune Wellness Solutions Inc.
Media Contacts: [email protected]; Investor Contacts: Valter Pinto, Managing Director, KCSA Strategic Communications, [email protected], 212.896.1254
Share this article