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Voyager Life PLC - Acquisition, Fundraise, Warrants & PDMR Dealings


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Voyager Life plc · VOY

16/12/2022 07:01

Voyager Life PLC - Acquisition, Fundraise, Warrants & PDMR Dealings
RNS Number : 9205J
Voyager Life PLC
16 December 2022
 

 

16 December 2022

 

 

Voyager Life plc

 

("Voyager" or the "Company") 

 

Acquisition, Fundraise, Issue of Warrants, Director Dealings, Share Options &

Appointment of Broker

 

Voyager, the health and wellness company supplying high-quality Cannabidiol (CBD), hemp seed oil and hemp-related products, is pleased to announce that it has acquired a CBD extraction and manufacturing facility in Poland from Goodbody Health Limited ("Goodbody") (the "Acquisition") for a consideration of £1.5 million, comprising of £0.5 million in cash and £1.0 million of convertible loan notes, subject to regulatory approval being granted by the authorities in Poland.

 

The Acquisition comprises the shares of Sativa Wellness Poland Sp. z.o.o. and Olimax NT Sp. z.o.o., subsidiaries of Goodbody, that combined provide CBD extraction and manufacturing at a facility in Bilcza, Poland

 

The Company has raised a total of approximately £0.55 million from new investors, existing shareholders and from Nicholas ("Nick") Tulloch, Chief Executive Officer, and Eric Boyle, Non-Executive Chairman, who have irrevocably agreed to subscribe for £200,000 (the "Director Subscriptions") of the £0.55 million. The Director Subscriptions, which are on the same terms as the Fundraise (as defined below), are subject to the granting of a Rule 9 waiver under the Takeover Code and shareholder approval at a forthcoming general meeting of the Company. 

 

Voyager intends to publish a shareholder circular in due course, following approval by the Takeover Panel, and the general meeting is expected to be held early in 2023. Accordingly, the Company will issue 2,899,992 new ordinary shares at a price of 12 pence per new ordinary share (the "Fundraise"), raising gross proceeds of approximately £0.35 million to partially fund the Acquisition, with admission of shares to trading on Aquis Stock Exchange Growth Market expected to occur at 8:00 am on or around 3 January 2023.

 

Voyager will assume full operational control of the CBD extraction and manufacturing facility on 1 January 2023.

 

Acquisition of CBD extraction and manufacturing facility

 

The acquisition of the CBD extraction and manufacturing facility in Poland will allow the Company to create a vertically integrated pan-European group which, following the Acquisition will comprise:-

 

·    CBD extraction facility in Poland that is Hazard Analysis and Critical Control Point ("HACCP"), Good Manufacturing Practice ("GMP"), Good Hygiene Practice ("GHP") compliant and ISO 22000 certified;

·    Manufacturing of skincare, topicals and ingestible products;

·    Pan-European white label and private label supply of CBD products;

·    Multi-channel distribution including three own stores and over 100 online and third party outlets.

 

The Directors believe that the Acquisition is an exceptionally good fit with Voyager's existing business with no overlap between the two operations. There are not expected to be any post-transaction redundancy or closure costs but certain cost savings are anticipated, for example as IT platforms and services are consolidated.  More importantly, the Directors expect revenue synergies as the complementary businesses come together.

 

Following completion of the Acquisition, Voyager's operations will span the supply chain of CBD production from extraction through to retail sales.  Specifically, the Company anticipates the following revenue streams:

 

·    sales of CBD isolate and distillate;

·    manufacturing and sales of white label & private label topical, skincare and ingestible CBD products;

·    trade sales of finished products; and

·    direct to retail sales through own stores and online channels.

 

Control of the entire supply chain should materially reduce Voyager's costs for individual product lines.  With no margin conceded to external suppliers of extraction and manufacturing - as is typically the case elsewhere in the UK and European CBD industry - the Directors anticipate that Voyager will become more competitive potentially enabling it, to reduce retail pricing as well as offering its own retail partners higher margins to stock its products.  In the current cost of living crisis, the Directors believe that this ability to control production costs, and, so be more competitive, is a significant advantage in this fast-growing industry.

 

Voyager's operations will be pan-European giving the Company the ability to service customers in both the UK and European Union without the constraints of border controls and customs fees, both of which have been impediments in the past.

 

The Acquisition comprises an extraction and manufacturing facility in Bilcza, Poland.  Located on the outskirts of the city of Kielce, the majority of the facility was built in the last 2-3 years. It was bought in 2019 for approximately £13 million (C$22 million) by Stillcanna Inc. (which subsequently merged with Goodbody), and significant amounts have been invested in the facility since that purchase.  The land on which the facility is built is owned freehold and comprises its own electricity substation for security of energy supply.  There is also extensive unused capacity which will allow for additional manufacturing and testing capabilities to be added on. It is Voyager's plan to manufacture products in Poland that have been formulated at the Company's premises in Scotland.  As well as CBD extraction from hemp, the facility in Bilcza can be used for production of other plant-based products, such as essential oils and cold-pressed hemp seed oil.  Voyager intends to expand the facility's operations to include fulfilment for its European customers.

 

The historic financial performance of the Acquisition assets are set out below (together with Voyager's historic financial results for comparison):

 

Revenue (£'000)

2019

2020

2021

Olimax (Poland)*

271

341

720

Voyager**

-

-

178

Illustrative total

271

341

898

*Year to 31 December

**Year to 31 March 2022

 

The combined assets of the purchased entities exceed £2 million (Voyager's unaudited total assets as at 30 September 2022 were £1.9 million).  The projected operating costs of the enlarged group are not expected to exceed £1.3 million per annum.  Following completion of the Acquisition, the Directors expect to realise some limited cost synergies in areas such as information technology and human resources but the primary benefit of the Acquisition is anticipated by the Directors to be through revenue synergies, specifically cross-selling to white label customers, developing the sales function in Poland which has been limited to date as well as enhancing Voyager's product range in-store and online.

 

The consideration for the Acquisition is £1.5 million comprising £0.5 million cash and £1.0 million convertible loan notes. The Directors believe this compares favourably to what they believe is a rebuild value of the Polish facility of around £5.0 million.  The loan notes are repayable at any time or otherwise convertible into 2.5 million Voyager ordinary shares. They carry an annual coupon of 7.5 per cent. with repayment or conversion by third anniversary of completion. 

 

Voyager will assume full operational control of the CBD extraction and manufacturing facility on 1 January 2023 with legal title passing following the conclusion of certain Polish registration requirements thereafter During negotiations for the Acquisition, Voyager and Goodbody have developed a strong working relationship. Voyager is now stocking Goodbody's blood diagnostic tests in its three stores and the two companies expect to continue to collaborate together on projects in the future.

 

The Fundraise, Use of Proceeds and Issue of Warrants

 

Pursuant to the Fundraise, the Company is issuing 2,899,992 new ordinary shares representing approximately 24 per cent of the enlarged share capital following Admission.  At the issue price of 12 pence, the Fundraise will raise gross proceeds of £347,999 for the Company which will be applied to payment of the £0.5 million cash consideration due to Goodbody in accordance with the terms of the Acquisition.

 

For each new ordinary share issued pursuant to the Fundraise, an investor will receive a warrant allowing the holder to subscribe for an additional share in the Company at an exercise price of 20 pence ("Warrants").  The issue of the Warrants are conditional on shareholder approval at a forthcoming general meeting and, if approved, will therefore be issued over 2,899,992 new ordinary shares and will expire on the second anniversary of the date of the general meeting.

 

The Fundraise, which is not being underwritten, is conditional, inter alia, upon admission of the new ordinary shares.

 

The new ordinary shares will be eligible for Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) purposes providing tax benefits to certain investor groups.  The new ordinary shares will rank pari passu in all respects with the ordinary shares including the right to receive all dividends and other distributions declared, paid or made after the date of issue.

 

Rule 9 Waiver

 

Nick Tulloch, Chief Executive Officer, and Eric Boyle, Non-Executive Chairman, have irrevocably agreed to subscribe, in aggregate, for £200,000 in Voyager ordinary shares at a price of 12 pence per share with attached Warrants subject to the granting of a Rule 9 waiver under the Takeover Code and shareholder approval at a forthcoming general meeting of the Company.  Voyager intends to publish a shareholder circular in due course, following approval by the Takeover Panel, and the general meeting is expected to be held early in 2023.

 

Share Option Scheme

 

At the time of its admission to trading on the AQSE Growth Market in June 2021, Voyager adopted a share option scheme, which includes an EMI scheme, under which all of the Company's employees were eligible for awards.  There are currently 989,884 share options outstanding under this scheme (which in aggregate represent 10.7 per cent of the existing issued share capital). These options have an exercise price of 19 pence per ordinary share and are subject to certain performance conditions which, inter alia, require the Company's share price to exceed 70 pence.  Given the decline of the Company's share price in line with other companies in the CBD sector, the existing share options are considered by the Directors to no longer fulfil the primary objective of incentivising employees.

 

Accordingly, the Directors will grant new awards under the Share Option Scheme and all options previously granted to Directors and employees will be surrendered.  The new awards are simplified in structure thereby reducing ongoing administration costs but are nevertheless designed to incentivise employees whilst prioritising shareholders' returns over employee rewards.

 

The Company will grant 1,622,818 share options ("Options") to certain of its Directors and employees pursuant to the Share Option Scheme (which in aggregate will represent 11.7 per cent of the enlarged share capital following Admission and completion of the Director Subscriptions).  Each Option has a higher exercise price of 20 pence and provides the holder the right to one new ordinary share on its exercise. The exercise price represents a premium of 48 per cent. to the mid-market closing price per Voyager ordinary share of 13.5 pence on 15 December 2022.  The Options vest over two years from the date of grant subject, inter alia, to continued employment.

 

Once vested, the Options expire on the tenth anniversary of the date of grant if not exercised.

 

Pursuant to the Share Option Scheme, Nick Tulloch, Voyager's Chief Executive Officer, will be granted options over 921,304 ordinary shares and Eric Boyle, Chairman, will be granted options over 460,652 ordinary shares.

 

As stated at the time of its admission, the intention of the Company is that the aggregate number of options that may be issued or reserved for issuance pursuant to the Share Option Scheme (or any other share schemes that the Company may in the future operate) may not exceed 15 per cent of the Company's issued share capital.  The Company may in future award additional options to new staff or to award exceptional performance but will keep within the above limit on the aggregate number of options.

 

Appointment of Broker and Issue of Broker Warrant

 

The Company also announces the appointment of Stanford Capital Partners LLP ("Stanford Capital") as broker to the Company with immediate effect. As part of their involvement in the Fundraise, the Company has issued Stanford Capital a warrant over 60,764 new ordinary shares in the Company with an exercise price of 20 pence for a period of two years from date of issue (being 16 December 2022).

 

Admission

 

Application has been made for 2,899,992 new ordinary shares to be admitted to trading on the Aquis Stock Exchange Growth Market ("Admission"). Admission is expected to occur at 8:00 am on or around 3 January 2023. The new ordinary shares will rank pari passu with the existing ordinary shares.

 

Total Voting Rights

 

Following Admission, the Company's enlarged share capital will comprise 12,152,912 ordinary shares ordinary shares of 1p each. Therefore, the total number of voting rights in the Company will be 12,152,912. This figure may be used by shareholders as the denominator for calculations by which they will determine if they are required to notify their interest in the Company, or a change to their interest in the Company, under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

 

Nick Tulloch, Chief Executive Officer and Founder of Voyager, said: "This acquisition simultaneously fulfils two of our objectives, namely to extend our business into Europe and complete our vertical integration.  Voyager will now be in a position to control the CBD supply chain from extraction to manufacturing to product accreditation to retail. 

 

"As our VoyagerCann manufacturing division has grown, we have increasingly dealt with European customers who, as a consequence of Brexit, may find delivery times are elongated due to customs checks and prices are distorted by customs charges.  Going forward, our product range that is already formulated and made in the UK can now be manufactured in Poland and distributed across the European Union's single market.

 

"Not only does the acquisition make us more attractive to our B2B customers, given the breadth of services we can now offer, but it also enables us to make very significant cost savings across our product range.  The retail prices of CBD products are under pressure and we are now not only well placed to protect our own margins but also to offer better deals to our end customers.

 

"Concluding this acquisition marks the end of many months of hard work but, with more work to come as we integrate our new Polish facility with the rest of our business, we believe we have laid the foundations to be one of the most important CBD companies in continental Europe."

 

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

 

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.

 

ENDS

 

Enquiries:

Voyager

Nick Tulloch - nick@voyagerlife.uk / +44 (0) 1738 317 693

http://voyagerlife.uk

 

Cairn Financial Advisers LLP (AQSE Corporate Adviser)

Ludovico Lazzaretti or Liam Murray +44 (0) 20 7213 0880

 

Stanford Capital Partners LLP (Broker)

Patrick Claridge                 +44 (0) 203 3650 3650

Bob Pountney                   +44 (0) 203 3650 3651

John Howes                       +44 (0) 203 3650 3652    

 

Notes to Editors:

 

About Voyager

Voyager was founded in 2020 and is based in Perth, Scotland.  The Company's primary objective is the formulation and supply of high quality CBD and hemp seed oil products although it also produces several other complementary products, the majority of which are manufactured from the hemp plant.  Its product categories include a pet range which has rapidly developed into one of the Company's best sellers.   The Company sells online, through third party stores and in its own stores which are located in St Andrews, Edinburgh and Dundee.  The Company has two principal retail brands: Voyager, focused on health & wellness, and Ascend Skincare, our beauty range.  Voyager products are currently available from Cornwall to Shetland in over 100 online and brick-and-mortar outlets.

 

The Company's philosophy of plant-based health and wellness is embodied in its mission statement and hashtag of "Choose you". With an experienced team and a product line created in line with the UK's regulatory regime, Voyager aims to become the trusted brand in this increasingly popular health and wellness space.

 

Through Voyager's bespoke skincare product creation and development division, voyagerCann, the Company also offers a full turnkey service to other CBD and cosmetics companies assisting them in developing and launching new products.

 

Website and social media links:

Voyager:

https://voyagercbd.com/

https://www.instagram.com/voyagercbd/

https://twitter.com/voyagercbd

https://www.linkedin.com/company/voyager-cbd/

https://www.facebook.com/voyagercbd/

 

voyagerCann:

https://voyagercann.com/

https://www.instagram.com/voyagercann/

https://twitter.com/voyagercann/

https://www.linkedin.com/company/voyagercann/

https://www.facebook.com/voyagercann/

 

 

 

1.

Details of PDMR / person closely associated with them ("PCA")

a)

Name

Nicholas Tulloch

2.

Reason for the notification

a)

Position / status

CEO

b)

Initial notification / amendment

Initial notification

3.

Details of the issuer, UK emission allowance market participant, auction platform or auctioneer

a)

Name

Voyager Life plc

b)

LEI

213800XIUQ3AHRZ6UF89

2.

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument

Options over ordinary shares of 1 pence each

b)

Nature of the transaction

Surrendering of historical options and award of new options over ordinary shares at an exercise price of 20 pence per new ordinary share

c)

Price(s) and volume(s)

Price(s)

Volume(s)

20 pence

921,304












d)

Aggregated information Aggregated volume Price

N/A

 

e)

Date of the transaction

16 December 2022

f)

Place of the transaction

Outside a trading venue

1.

Details of PDMR / person closely associated with them ("PCA")

a)

Name

Eric Boyle

2.

Reason for the notification

a)

Position / status

Chairman

b)

Initial notification / amendment

Initial notification

3.

Details of the issuer, UK emission allowance market participant, auction platform or auctioneer

a)

Name

Voyager Life plc

b)

LEI

213800XIUQ3AHRZ6UF89

2.

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument

Options over ordinary shares of 1 pence each

b)

Nature of the transaction

Surrendering of historical options and award of new options over ordinary shares at an exercise price of 20 pence per new ordinary share

c)

Price(s) and volume(s)

Price(s)

Volume(s)

20 pence

460,652












d)

Aggregated information Aggregated volume Price

N/A

 

e)

Date of the transaction

16 December 2022

f)

Place of the transaction

Outside a trading venue

 

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