Sibannac Inc. (OTCMKTS:SNNC) has entered a memorandum of understanding to acquire 51% interest of New Jersey-based nutraceutical and industrial chemical producer Steller Chemicals Corp in a stock plus cash transaction
Stellar Chemicals acquisition to cost $10 million
The acquisition will cost $10 million and comprise $2 million in cash, and the rest will be in the form of preferred, restricted stock, which is convertible of shares at $0.75-$1. Currently, Stellar is profitable and grosses $4.5 million in revenue from business to business and business to consumer sales and via online and direct contract manufacturing. The company expects a positive price share effect based on the earnings and the companies’ synergy. Interestingly, the issued shares will be preferred and restricted from sale and thus do not have an immediate dilutive effect and will thereafter be subject to restriction according to SEC Rule 144.
David Mersky, Sibannac CEO, stated that the acquisition represents substantial value for both companies, and stellar has the experience in manufacturing products for markets Sibannac is venturing into. He added that Stellar’s capabilities are advanced, and with the manufacturing knowledge in place, it will save Sibannac much in time and investment. Currently, Stellar is installing “gummy” producing and filling equipment to meet future orders generated by Sibannac.
Sibannac to acquire Lifetime Branding Collaborative
Recently, Sibannac and Lifetime Branding Collaborative LLC founder Eric Stoll executed a binding term sheet that will give Sibannac the option to acquire Lifetime Branding. They will immediately appoint Stoll as the Marketing VP. With the transaction commencing, parties will determine the acquisition price for the acquisition, but they have already agreed on valuation parameters. Stoll is expected to receive stock from the newly created preferred stock class, convertible to common shares after achieving specific revenue milestones. He will also have more compensation under the employment agreement.
Mersky said that Sibannac is lucky for the opportunity to bring Mr. Stoll on board and fully dedicated to the company’s brands. He said that Stoll has unique talents and he is among the best in the industry.