ECS Botanics Holdings has entered into a binding share purchase agreement to sell its Tasmanian operation to US-based pet nutrition firm Blue Buffalo for A$3m.
A $300,000 deposit has been paid by Blue Buffalo for 100%-owned subsidiary ECS
Botanics Pty Ltd (TasCo). Settlement is due to occur on October 31 or a date agreed by both parties, at which point ECS will be paid the balance.
In June, ECS unveiled a major strategic shift, including the sale of its Tasmanian operation and hemp food and wellness division to focus on medicinal cannabis production at its Victorian facility.
In July, it agreed to sell the hemp food and wellness business to Ecofibre subsidiary Ananda Food for $250,000.
Managing Director Nan-Maree Schoerie said: “The sale of TasCo completes the third and final step in the group’s restructure and streamlining announced to the market on June 14 this year.
“This allows us to focus on the expansion at our Victorian operation which is proceeding rapidly. We continue to experience very healthy demand for our medicinal cannabis products and this transaction provides important access to growth capital.”
Consistent with a reduction in secured property, the company’s maximum loan limit with NAB Australia will be reduced as a result of the sale, likely to an upper limit of around $800,000.
Net proceeds will fund continued expansion of the Victorian facility.
