For the past nine years, Heritage has been the most awarded craft distillery in
As a result of the business combination, Heritage expects to become one of the only publicly-traded, pure play craft distilleries. The proposed transaction combines Heritage’s brands with Better World’s consumer products and beverage expertise. Better World brings marketing, finance and capital markets experience that the parties believe will accelerate the growth of Heritage’s business.
Following the closing of the transaction, and assuming no redemptions by Better World stockholders in connection with the stockholder vote to approve the transaction, it is anticipated the Combined Company will have approximately
“Heritage was built on a foundation of innovation, which has enabled us to become one of the most awarded craft spirits distilleries in
Heritage Distilling Highlights (Pro Forma for Proposed Business Combination)
- Pure play craft distillery developing a national distribution footprint working with the second largest
U.S. beverage distributor and a network of Native American tribal partners. - Better World CEO,
Rosemary Ripley , who will join Pubco’s board of directors following the closing, provides significant CPG expertise from companies such asKraft Foods , Miller Brewing, Philip Morris, Heineken NV and Zevia, as well as private equity and M&A experience with over$40 billion in transactions. - With a global market of
$23 billion in 2022, craft distilling represents a significant addressable market, and is projected byThe Business Research Company to grow 31% per annum through 2026. - National wholesale distribution growth strategy enhanced by proprietary tribal channel with – limited capital expenditures:
- Heritage founded the Tribal Beverage Network (TBN) to collaborate with Native American tribes to develop Heritage-branded distilleries and tasting rooms, to sell existing Heritage brands and to advise the tribes on developing new brands.
- Creates compelling social and economic benefits for participating tribal communities while allowing the tribes another channel through which to exercise tribal sovereignty.
- Differentiated distribution channel with unique access to a network of Native American tribal properties, generating recurring revenue based on tax-advantaged sales.
- Distribution agreement with the second largest spirits distributor in the
U.S. (with a current market share of approximately 20%).
- Heritage founded the Tribal Beverage Network (TBN) to collaborate with Native American tribes to develop Heritage-branded distilleries and tasting rooms, to sell existing Heritage brands and to advise the tribes on developing new brands.
- Downside protection for 18 months (or 24 months if elected by Better World’s sponsor) for Better World public stockholders who do not redeem their shares in connection with the transaction:
- Approximately
$20 million in estimated asset value derived from aged barrels of spirits and minority interest. - Contingent Value Right (“CVR”) to be issued to Better World stockholders who do not redeem their shares will provide downside protection ranging from approximately
$4.00 to$6.00 per share, depending on the level of redemptions and the duration of the CVR period.
- Approximately
Summary of Transaction
Pursuant to the Agreement, each of Heritage and Better World will merge with newly-formed subsidiaries of
As merger consideration, each Better World public stockholder who participates in the business combination will receive:
- One share of
Pubco common stock. - One CVR, which provides the holder with a 10% per annum preferred simple return including downside protection ranging from approximately
$4.00 to$6.00 per share (depending on the level of redemptions and the duration of the CVR period) during the 18-month period following the closing, which may be extended by six months at the option of Better World’s sponsor.
As merger consideration, each Heritage stockholder who participates in the business combination will receive:
- Approximately 4.15 shares of
Pubco common stock for each share of Heritage common stock held by a stockholder based on Heritage’s current capitalization and net debt adjustments. - In addition, Heritage stockholders have the contingent right to receive up to 3,000,000 earnout shares from
Pubco as additional consideration if the applicable earnout milestones (based on net revenues and stock price) as set forth in the Agreement are achieved byPubco .
Assuming no redemptions by Better World’s public stockholders, it is estimated that the current security holders of Heritage will own approximately 47% of the issued and outstanding shares in the Combined Company at closing of the transaction.
The transaction has been unanimously approved by the boards of directors of both Better World and Heritage. Completion of the transaction is subject to approval by equity holders of each company and certain other conditions specified in the Agreement. The transaction is currently expected to close in the second quarter of 2023.
The description of the transactions contemplated by the Agreement (collectively, the “Transaction”) contained herein is only a summary and is qualified in its entirety by reference to the Agreement, a copy of which will be filed by Better World with the
About
Better World is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. While Better World may pursue an acquisition in any business industry or sector, it intends to concentrate its efforts on identifying businesses that benefit from strong Environmental, Social and Governance (“ESG”) profiles.
About
Forward-Looking Statements
Certain statements included in this press release are not historical facts, but are forward-looking statements. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of other performance metrics and projections of market opportunity. These statements are based on various assumptions, whether or not identified in this press release and on the current expectations of Better World’s and Heritage’s respective management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Better World and Heritage. Some important factors that could cause actual results to differ materially from those in any forward-looking statements could include, without limitation, changes in business, market, financial, political and legal conditions.
These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, the inability of the parties to successfully or timely consummate the Transaction; the failure to realize the anticipated benefits of the Transaction; the ability of Better World prior to the Transaction, and the Combined Company following completion of the Transaction, to maintain (in the case of Better World) and to obtain and maintain (in the case of the Combined Company) the listing of Better World’s shares prior to the Transaction, and, following the Transaction, the Combined Company’s shares, on Nasdaq; costs related to the Transaction; the failure to satisfy the conditions to the consummation of the Transaction, including the approval of the Business Combination Agreement by the stockholders of Better World, the risk that the Transaction may not be completed by the stated deadline and the potential failure to obtain an extension of the stated deadline; the inability to complete a transaction financing; the outcome of any legal proceedings that may be instituted against Better World or Heritage related to the Transaction; the attraction and retention of qualified directors, officers, employees and key personnel of Better World and Heritage prior to the Transaction, and the Combined Company following the Transaction; the ability of the Combined Company to compete effectively in a highly competitive market; the ability to protect and enhance Heritage’s corporate reputation and brand; the impact from future regulatory, judicial, and legislative changes in Heritage’s industry; the uncertain effects of the COVID-19 pandemic or other public health matters; competition from larger companies that have greater resources, technology, relationships and/or expertise; the future financial performance of the Combined Company following the Transaction, including the ability of future revenues to meet projected annual projections; the ability of the Combined Company to forecast and maintain an adequate rate of revenue growth and appropriately plan its expenses; the Combined Company’s ability to manage a complex set of marketing relationships and realize projected revenues from subscriptions, advertisements, product sales and/or services; ; Heritage’s ability to execute its business plans and strategy; the Combined Company’s ability to secure the attention and focus of its distributor and retailer buyers to support the level of growth anticipated in the Combined Company’s business plans; the Combined Company’s ability to negotiate terms with Native American tribes in accordance with the Combined Company’s business plans; the potential difficulty of enforcing certain provisions in agreements with Native American tribes due to their sovereign status; the ability to ensure product consistency, quality control and presentation of the Heritage brand and products in locations owned by third parties; the length of time required to receive approval from Native American tribes, various related entities and Federal regulators with regulatory oversight of the Federal-tribal relationship; and those factors set forth in documents of Better World or
Participants in the Solicitation
Better World and Heritage and their respective directors and executive officers may be considered participants in the solicitation of proxies with respect to the proposed transaction described in this press release under the rules of the
Important Information About the Transaction and Where to Find It
This press release relates to a proposed Transaction between Better World and Heritage. This press release does not constitute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the Transaction described herein, Better World and Heritage intend to file relevant materials with the
Non-Solicitation
This press release does not constitute, and should not be construed to be, a proxy statement or the solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed business combination described herein and shall not constitute an offer to sell or a solicitation of an offer to buy any securities nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of the
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