The investment holding company Blackhawk Group (CSE:BLR) announced that it has entered into an all-stock purchase agreement with Blum Distributors Ltd.
Blum is a mycology supplier with in-house product cultivation, distribution and sales center. The company recently signed a contract with Applied Myco to provide a white label solution. The contract guarantees a minimum order of 500 bags per month during its Phase 1 trial and is expected to increase to up to 2,000 bags per month in Phase 2 and 3 over the next 12 months. Another contract signed by Blum is expected to bring around $1,000,000 per month in gross revenue for the company, given that the maximum contract deliveries are reached.
Frederick Pels, CEO of Blackhawk Growth, stated that “Blum’s growth continues to be impressive.”
Rico Gutierrez, Blum’s founder, added: “This opportunity will allow us to further accelerate our ongoing demand for production and supplies.”
Regarding the transaction’s structure, Blackhawk will issue 9,650,000 common shares to the existing shareholders of Blum. At today’s price, the all-stock transaction would be approximately CA$3,860,000 ($3 million). According to the company “A fee of 750,000 shares will be paid to an arm’s length party for assistance with the transaction,” and the transaction wouldn’t mean a fundamental change to Blum’s business plan.
Photo courtesy from Wikimedia Commons
