Business
FitLife Brands to Acquire Mimi’s Rock Corp.
Transformative acquisition will double the size of the company with minimal leverage and no dilution to shareholders OMAHA, NE, Dec. 05, 2022 (GLOBE NEWSWIRE)
About this update from Fitlife Brands, Inc.
[{"type":"text","content":"Transformative acquisition will double the size of the company with minimal leverage and no dilution to shareholders\nOMAHA, NE, Dec. 05, 2022 (GLOBE NEWSWIRE) -- FitLife Brands, Inc. (“FitLife” or the “Company”) (OTCPK: FTLF), a provider of innovative and proprietary nutritional supplements for health-conscious consumers, announced that it has entered into definitive documentation to acquire all of the issued and outstanding common shares of Mimi’s Rock Corp. (“Mimi’s Rock” or “MRC”) (TSXV: MIMI, OTCQB: MIMNF), subject to customary closing conditions. Highlights of the transaction, which is expected to close in February, 2023, are as follows: The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to approximately double the size of the Company to more than $60 million annual revenue Annual adjusted EBITDA of the combined businesses is anticipated to exceed $12 million The all-cash transaction, with no shares being issued by FitLife, is expected to be highly accretive to existing shareholders once all transaction-related costs have been expensed The total transaction value is approximately CDN $27.2 million (approximately $20.3 million US dollars at current exchange rates)After adjustment for transaction expenses and working capital, the remaining consideration paid by FitLife will retire all of MRC’s outstanding indebtedness and fund payment to Mimi’s Rock shareholders of CDN $0.17 per shareThe Company expects to incur $1.2-1.5 million in transaction expenses, and post-closing the Company anticipates investing approximately $2.0 million to enhance MRC’s working capitalMimi’s Rock shareholders owning approximately 47% of the outstanding shares have entered into voting agreements in support of the transactionThe purchase will be funded using a combination of cash on hand and a committed term loan to be provided by the Company’s bank, First Citizens Bank, with a rate of SOFR+275Post-closing, total FitLife leverage will be minimal, with net debt/pro forma EBITDA expected to be comfortably below 1.0x, and the Company anticipates being debt-free within approximately one year of closing the transaction Revenue concentration with GNC, the Company’s largest customer, is expected to decline from 65-70% currently to 30-35% for the combined businessesOnline revenue as a percent of tot...