Vancouver, British Columbia--(Newsfile Corp. - July 18, 2018) - Clean Seed Capital (TSXV: CSX) announced the strategic acquisition of Harvest International, from the Freisen family, for US$13,100,000 and future additional earn-out considerations. Clean Seed, through the development of its new highly advanced CX-6 SMART Seeder™, offers an unrivaled level of precision in modern no-till seeding and planting and is being considered the future of farming.
The CX-6 SMART Seeder™ set the seeding equipment benchmark by enabling true execution of high resolution seeding prescriptions at each square foot of the field, to suit soil conditions and fulfill agronomist recommendations, considered an industry first!
Graeme Lempriere, President and CEO, stated: "Following the recent granting of Clean Seed's patents in the U.S., we embarked upon a program to source a synergistic industry partner that could accelerate our growth and position our company to play a major role in the U.S. and international planter markets, complementing our SMART Seeder technology initiatives. One company stood out as a seamless fit for Clean Seed, U.S. based Harvest International. This transaction is a transformational event for our collective organizations and drives our speed to market. The management team of Harvest International has decades of experience in manufacturing agricultural equipment and a clear insight into farming community requirements. This strategic acquisition is best described as a merger of two cutting edge technology pioneers. Our combination will lead to developing robust market share which will be protected by an international portfolio of patented, innovative technologies for both the planting and seeding segments. The amalgamation of our management teams and technological prowess is the catalyst to expeditious growth."
The Friesen family has been extremely successful in the agricultural manufacturing business since 1963, firstly as the founders of Meridian Industries, subsequently founding Friesen of Iowa and then most recently, Harvest International. Harvest International, founded in 2007 as a developer and manufacturer of high quality augers and conveyor systems, transformed in 2014, by creating and developing farmer focused planter technologies to complement their product offerings. They subsequently developed and patented a unique toolbar design, advancing from component producers towards full planter producers.
To focus primarily on advancing its planter business, Harvest International sold its auger and conveyor product lines in 2017 and transformed its 75,000 square foot manufacturing facility and head office in Storm Lake, Iowa to commit 100% to the planter market. The acquisition includes these manufacturing facilities.
On closing, Byron Friesen, President and CEO of Harvest International, and other key Harvest International management will continue in their senior management roles. Byron will also be appointed to Clean Seed's board of directors.
Byron Friesen, President and CEO of Harvest International, stated: "Harvest International has a proud history of farmer-focused innovations in agricultural manufacturing and intellectual property development. Partnering with Clean Seed greatly advances our technological edge. Joining forces with a like-minded tech forward company like Clean Seed will allow our combined companies to deliver innovations not yet seen by North American farmers."
The terms of the acquisition will include:
1. Issuance of 8,000,000 shares of Clean Seed
2. Cash payment of approximately US$2.6 million subject to customary closing adjustments
3. Assumption or restructuring of approximately US$7.5 million of notes payable
4. Future cash payments of up to US$6 million based on earn-out milestones
The shares are currently halted with the last trade at $0.48. They will remain halted until the TSX Venture Exchange has received all the necessary documentation.
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