EDMONTON, ALBERTA, Aug 4, 2004 (CCNMatthews via COMTEX) -- PLANET ORGANIC HEALTH CORP. ("Planet Organic" or the "Corporation") (TSX Venture Exchange - "POH"), which owns large natural food supermarkets in Edmonton, Victoria, Calgary and Port Coquitlam and a chain of supplement and market stores across Canada, announced today that it has signed a binding letter of intent to acquire all of the issued and outstanding common shares of Trophic Canada Inc. ("Trophic").
Trophic, founded in 1967, is a profitable leading manufacturer and distributor of vitamins, minerals and herbal supplements with a sales force across Canada and distribution through most of the country's natural food and supplement stores. Trophic, located in Penticton B.C, will operate as a separate division headed by their existing management team.
This acquisition is part of Planet Organic's plan of vertical integration within the natural products industry, allowing it to further streamline systems and take advantage of economies of scale. Planet Organic plans to use its combined resources at the retail and manufacturing levels to better compete against large mainstream stores.
"The Trophic acquisition represents another strategic move for Planet as part of its ongoing growth strategy," said Darren Krissie, VP Corporate Development and CFO of Planet Organic. "Planet and Trophic are focused strictly on supporting the natural products industry, and this move enhances that vision."
Ron Francisco, chairman and director of Planet Organic, said the move strengthens both Trophic and the Canadian natural products industry: "It's a logical fit for both Trophic and for Planet Organic."
Planet Organic recently acquired Sangster's Health Centres, a 35-store chain with franchised and privately held outlets across Canada. Sangster's has a profitable private label brand of vitamins and supplements.
Planet Organic, Trophic and Sangster's will operate as separate divisions within the company.
Pursuant to the terms of the proposed acquisition the Corporation will pay to the shareholders of Trophic $5.5 million (Cdn.) via the issuance of 6,875,000 shares. In addition the Corporation has agreed to assume approximately $552,000 of Trophic's liabilities.
The proposed acquisition is subject to a number of conditions, including further due diligence, TSX Venture Exchange approval and shareholder approval. The transaction is non-arm's length in that a related party of Planet Organic controls directly and indirectly the majority of the outstanding common shares of Trophic.
Planet Organic operates natural food supermarkets in Edmonton, Victoria, Calgary and Port Coquitlam with current revenues for the nine months ended March 31, 2004 of $8,691,071. Planet Organic provides its customers with the convenience of one-stop shopping by offering a broad product selection in all merchandise categories. Planet Organic's objectives are to consolidate the fragmented natural and organic foods industry in Canada and the U.S. via acquisitions, mergers and new retail operations.
This news release contains forward-looking information. Actual results may vary significantly from estimates.