Infusionz owner, the Florida-based Upexi (Nasdaq: UPXI), provided “significant” financing to Infusionz for an undisclosed portion of the deal.
“This acquisition is highly accretive, and we believe that it will position Bloomios to uplist to Nasdaq,” said Barrett Evans, president and chief strategy officer of Bloomios. “Further, it will allow the company to acquire additional complementary manufacturing operations and brands.”
The acquisition includes Infusionz’s CBD portfolio along with its associated order flow, product formulations, manufacturing operations, equipment, and sales team.
The $23.5 million price tag included $5.5 million in cash, as well as $18 million worth of noncash consideration that consisted of a $4.5 million senior secured convertible debenture by Bloomios to Upexi plus a $5 million secured subordinated promissory note and shares of a newly created Series D Convertible Preferred Stock with a value of $8.5 million.
The added operations are expected to more than double Bloomios’ current production capacity while shaving down redundant costs, the company said. Bloomios said that the acquisition will contribute in excess of $22 million in annualized gross revenue.
“This acquisition enables us to better address unmet demand and significantly improve our operational capabilities,” stated Bloomios CEO Michael Hill. “In addition to the new brands and expanded manufacturing capacity, it brings with it a substantial amount of new order flow, positive cash flow, valuable customer relationships, and a highly-capable sales team to drive further growth.”
Bloomios said that it believes the Infusionz brand will launch the company’s expansion into the direct-to-consumer market and other new distribution channels.
The acquisition was funded in part through a senior secured convertible debenture offering with an aggregate principal amount of approximately $13,893,059 (including a 15% original issue discount) led by institutional investors.
The total new investment received in connection with the senior secured convertible debenture offering was $6.25 million with the balance of the principal amount consisting of issuances to Upexi and the refinancing of previous loans.
Revere Securities and Spartan Capital helped facilitate the deal.