Vancouver, British Columbia / November 13, 2018 – Harbour Star Capital Inc. dba EastWest Bioscience (the “Company” or “EastWest”) (TSX-V: EAST) is pleased to announce its pending acquisition (the “Acquisition”) of the iconic chain of 28 Sangster’s Health Centres (“Sangster’s”). Sangster’s is one of Canada’s most storied national natural health product franchises. Its acquisition gives EastWest a strategic advantage in becoming the leading hemp focused consumer goods company in Canada and around the globe. The Acquisition is anticipated to close on November 30, 2018.
Sangster’s has over 200 private brand products exclusively sold in its stores giving it one of Canada’s most recognized brands for safe natural remedies. Today, Sangster’s continues to grow as a national brand name with franchise stores located across Canada.
“This is a critical strategic step for EastWest”, explains Rodney Gelineau, CEO of EastWest. “It’s the first of several major steps we are planning to execute our strategic plan to build a vertically integrated global hemp Company. We believe that long-term success in the Cannabis space for our Company is going to be based on the health benefits of Cannabidiol (CBD) not THC and that a clear path to CBD success is going to be won or lost on the distribution front and owning the shelf space is critical.”
EastWest continues to strive to be a fast-growing Natural Health Company that is committed to delivering the holistic benefits of hemp to our consumers. Sangster’s provides instant critical strategic benefits that fit perfectly into our long-term growth strategy, such as shelf space, retail experience, market-testing new products, consolidation of administration and warehousing.
“Sangster’s is thrilled to be a part of EastWest’s big vision for the future” says Nicole Sangster-Friesen, President of Sangster’s. “We are confident that EastWest is going to offer Sangster’s exciting opportunities such as growth in retail locations and opportunities to enhance our product lines. We recognize the synergies; our knowledge of product development and retailing and leveraging over 200 of our recognized Sangster’s products into EastWest’s grand strategic plan for expanding those onto new shelves here in Canada and into new global regions. This friendly new partnership, grown from a close working relationship with EastWest for manufacturing and product development, is now bringing Sangster’s to the next exciting new business phase that will offer the franchise amazing opportunities to realize the immense potential we envision.”
Franchise fee revenue reported by Sangster’s for the trailing 12-months ended September 30, 2018 (unaudited) is as follows:
|Trailing 12 Months||Ended|
|CAD$ (in thousands)|
|Royalty and Miscellaneous Revenue||$719|
EastWest is also pursuing other major acquisitions that will further expand EastWest’s revenues and distribution footprint.
Pursuant to the Acquisition, on November 2, 2018 EastWest executed the asset purchase agreement with the Sangster’s family of holding companies, owners of the Sangster’s assets. The aggregate purchase price for the Sangster’s assets was $1,150,000 consisting of a combination of $600,000 in cash ($300,000 at closing and $300,000 30 days from closing), two cash promissory notes for an aggregate of $250,000 at 6% annualized interest, paid 50% after one year and 50% after two years from the Closing Date, and an aggregate of $250,000 in EastWest stock, 50% due on the Closing Date and 50% due one year from the Closing Date. Completion of the Acquisition is arm’s length and is subject to TSX Venture Exchange approval.
About EastWest BioScience Group
EastWest Bioscience is a seed-to-sale organization that offers world class manufacturing and premium hemp-based consumer goods. Since it was founded in 2016, EastWest continues to grow as a high-quality producer, manufacturer and distributor of multiple lines of premium hemp products. EastWest is strategically positioned in mainstream consumer markets with wholistic natural products and has developed distribution channels into mainstream stores and markets in Canada. The Company has a Health Canada licensed, GMP (Good Manufacturing Practices) certified manufacturing facility and produces premium brands offering natural products for a preventive care lifestyle. EastWest consumer product lines are divided into four distinct brands: 1) Natural Advancement – natural biopharmaceutical health supplements; 2) Earth’s Menu – all-natural hemp superfoods; 3) Natural Pet Science – pet food and pet supplements; and 4) Chanvre Hemp – all-natural health and beauty products. The organization will continue to focus on ongoing development of innovative, hemp-based consumer products through advanced science with clean, natural ingredients to complement its current product offerings.
About Sangster’s Health Centres
Sangster’s Health Centres occupies a distinguished position in the Canadian natural health products and natural health industry in Canada. Founded in 1971, Sangster’s stores and people have been providing their customersknowledge and hundreds of product remedies for the safe, natural prevention and treatment of disease and ailments for almost 50 years. Sangster’s has introduced and developed over 200 exclusive Sangster’s products (vitamins, mineral, herbs, proteins, natural body care and organic foods) putting the Sangster’s name and branded products into thousands of Canadian households. Today, Sangster’s continues to grow as a national brand name with franchise stores located across Canada.
ON BEHALF OF THE BOARD OF DIRECTORS EASTWEST BIOSCIENCE GROUP
Co-Founder, Chief Executive Officer and Director
This press release is not an offer of securities for sale in the United States. The securities described in this press release have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act of 1933, as amended) absent registration or an exemption from registration. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction where such offer, solicitation, or sale would be unlawful.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the terms and conditions of the Acquisition. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.