VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 18, 2016) - Namaste Technologies Inc. ("Namaste" or the "Company") (CSE:N)(FRANKFURT:M5BQ) is pleased to announce that the Company has closed its acquisition of certain assets of URT1 Limited and it's wholly owned US subsidiaries (collectively referred to as "URT1"). With completion of this acquisition, Namaste is now the world's largest e-commerce company focused on sale of vaporizers and accessories. The acquisition of URT1 significantly increases Namaste's revenue and gross profit on a proforma basis and re-affirms the Company's role as the industry's principal consolidator.
URT1 is one of the top 5 domains in the world for the sale of vaporizers, pipes and accessories. The company operates two websites, www.everyonedoesit.com and www.everyonedoesit.co.uk, and retails through select third-party marketplaces. Unaudited 12 month trailing revenues were approximately C$3.2 million for the period ended August 31, 2016 with a gross profit margin of 53%. URT1 has been in business since 2000.
Terms of the Transaction
Pursuant to the terms of the Definitive Asset Purchase Agreement announced on September 15, 2016, Namaste has acquired all the website domains, the customer list of over 40,000 individuals, the EDIT Collection of smoking accessories, direct relationships with over 190 vendors, intellectual property and related technologies. The purchase price was calculated as one-times the 12-month trailing gross revenue of URT1, subject to adjustments for inventory, wind down costs, and assumed liabilities. The assumed liabilities include a secured note of approximately C$500,000 for 4 years at an interest rate of 4% payable in equal annual installments. Upon closing of the transaction, the Company has provided an initial 80% of the purchase price to URT1 of the estimated cash wind down costs and 13,771,933 common shares. The Company will make an adjustment to the purchase price in 45 days, subject to the actual wind down costs realized by URT1. Any additional consideration to URT1 will either be provided in cash or common shares of the Company at a 25% discount to the 10 day volume weighted average trading price of the common shares of the Company on the Canadian Securities Exchange.
Liberty North Capital Corp. acted as an advisor to URT1 in connection with the transaction.
Management and Board Appointments
Philip van den Berg has been appointed as Chief Financial Officer, Corporate Secretary and Director and Kiran Sidhu has been appointed as an Independent Director, subject to the approval of the Canadian Securities Exchange.
Philip van den Berg graduated cum laude in economics in 1985 at the University of Amsterdam. After graduating, Mr. van den Berg joined Pierson, Heldring & Pierson in the Netherlands as investment analyst. Most of his experience on the sell side was with Goldman Sachs in London where he joined when its European equities division was established in 1987. In 1995 Philip went to Deutsche Morgan Grenfell to participate in re-establishing its European equities division. During his career on the sell-side, he held various positions within research departments as investment analyst, supervisory analyst, member of the investment policy committee and head of research. In 1997 Philip moved to the buy-side as co-founder of Olympus Capital Management, one of the first European hedge funds (long short equity). In 2006 Philip co-founded Taler Asset Management, a wealth management company based in Gibraltar. Currently Philip is a non-executive director at Taler. Since 2014 Philip has been an active investor in various start-up companies in Europe and the US where he has held positions as director and CFO, including Golden Leaf Holding and URT1. He has implemented corporate governance and administrative systems, has been involved in a number of capital market transactions, oversaw a public listing and has been involved in mergers and acquisitions.
Kiran Sidhu graduated with and A.B. honors in computer science in 1985 from Brown University and an MBA in Finance from the Wharton School of Business in 1987. Mr. Sidhu was a manager with Price Waterhouse's strategic consulting group in Los Angeles and a senior associate with Merrill Lynch Capital Markets in mergers and acquisitions in New York. Mr. Sidhu served as CFO of On Stage Entertainment and oversaw its initial public offering on NASDAQ. On Stage was subsequently sold to McCown De Leeuw & Co. Mr. Sidhu was a founder and the finance director of Nano Universe PLC where he oversaw its listing on the LSE-AIM. In 2003 he built Aspen Communication located in New Delhi, India into an outsourcing company skilled in e-commerce fraud detection, accounting, customer and systems support and data analytics to large customers included Party Gaming.
Sidney Himmel has resigned as Chairman of the Company and will remain with the Company as an advisor on accounting and corporate finance related activities. Darren Collins will remain with the Company as Executive Vice President, Corporate Development.
Sean Dollinger, President and CEO of Namaste, comments: "The acquisition of URT1 represents our second major acquisition since taking the Company public in March of this year and positions Namaste as the largest e-commerce company focused on the sale of vaporizers and accessories globally. In combination with our recently completed capital raise, Namaste is poised for significant organic growth and will continue to seek strategic acquisition opportunities. I would like to thank all those individuals involved in bringing this transaction together. I would also like to personally thank Sidney and Darren for their contribution to the company and look forward to continuing to work with them both in their new roles."
About Namaste Technologies Inc.
Namaste Technologies Inc. is an emerging leader in vaporizer and accessories space. Namaste has 26 ecommerce retail stores in 20 countries, offers the largest range of brand name vaporizers products on the market and is actively manufacturing and launching multiple unique proprietary products for retail and wholesale distribution. The Company is currently focused on expanding its product offering, acquisitions and strategic partnerships, and entering new markets globally.
On behalf of the Board of Directors
Sean Dollinger, Chief Executive Officer
Further information on the Company and its products can be accessed through the links below:
FORWARD-LOOKING INFORMATION This press release contains forward-looking information based on current expectations. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, Namaste assumes no responsibility to update or revise forward looking information to reflect new events or circumstances unless required by law. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this press release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors 5 discussed in the Company's disclosure documents which can be found under the Company's profile on www.sedar.com. This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The CSE has neither reviewed nor approved the contents of this press release.