Mota Ventures Corp (CSE:MOTA) (OTCMKTS:PEMTF) said Thursday that it is moving forward with its previously inked binding agreement with VIDA BCN LABS SL (Spain) and Sativida OU (Estonia) to acquire Spanish CBD company Sativida.
In a statement, Mota said that it has now acquired the intellectual property and trade names of Sativida from Sativida OU (Estonia). The company will license both back to Sativida OU's subsidiary, VIDA BCN LABS SL in exchange for a royalty linked to the gross revenue generated by Sativida.
Sativida is a producer and online retailer of CBD and branded CBD products in certain jurisdictions in Europe, including Spain, Portugal, Austria, Germany, France and the UK. Sativida is also the top search-ranked online retailer of CBD products in Spain and Mexico and plans to continue expanding its footprint in Europe and Latin America.
“Through Mota, Sativida has an agreement with Unified Funding LLC for the expansion of the brand into the US. Unified will aid Sativida with product sourcing, packaging, shipping, payment infrastructure and marketing in the US,” Mota Ventures said in a statement.
Since June 2015, Unified has created a database of over 4.5 million consumers and aided over $200 million in consumer transactions.
"I am very excited to announce the acquisition of the Sativida brand. This gives Mota immediate entry into the European market and will be a building block for our planned European expansion,” said Mota Ventures CEO Ryan Hoggan.
“Mota's US operation, First Class CBD, is set to enter the European market and we expect the acquisition of the Sativida brand to expedite this expansion. Our partnership with Unified Funding LLC, the e-commerce platform behind the success of First Class CBD, will allow us to bring the Sativida brand to the US market as well," he added.
Cost of the acquisition
Mota Ventures said the transaction is made up of an initial €2 million (US$2.2 million) and an earn-out component of three milestone payments based on Sativida’s revenue. The initial amount was paid in 5,496,221 shares of the company at a deemed price of $0.5689 per share.
Meanwhile, each milestone payment will be based on a multiple of Sativida’s revenue of 400% until the aggregate of the initial consideration and milestone payments reaches €4 million (US$4,37 million) at which point the multiple will be reduced to 100%. In no event will the combined milestone payments and the value of the initial consideration exceed €15 million (US$16,41 million).
The milestone payments will also be met by Mota issuing shares to Sativida.
Some Sativida employees retained
As part of the deal, Mota will give employment contracts to some Sativida employees and will provide an option pool that may be divided among the employees of Sativida equal to €60,000 in stock options for every €1 million in revenue that Sativida earns, subject to certain conditions.
Noah Laith, founder of Sativida, commented: "Joining Mota is a major step for Sativida that will provide access to the capital, connections and infrastructure necessary to grow our business in Europe and internationally."
Mota Ventures, based in Vancouver, British Columbia, aims to become a large-scale vertically integrated low-cost producer and exporter of CBD products globally.
Contact the author Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive