Canadian Zeolite Corp. (TSXV:CNZ) (OTCQB:CNZCF) (FSE:ZEON), an environmentally friendly Green Tech business involved in the exploration, development, and production of the natural mineral zeolite, announced on Monday after market close that a binding LOI has been signed to acquire a 100% interest in Earth Innovations Inc. from a privately held Canadian Company.
Earth Innovations is the leading provider of retail, industrial, and commercial zeolite products in North America with aggregate sales in excess of $3.5 million since 2014. Flagship brands include ecoTraction and Smell Grabber, available nationally in Canada and the United States. In 2008, Earth Innovations was a successful contestant on CBC Dragon’s Den on it’s mission to produce, market, and distribute truly environmentally beneficial products to address identified needs in winter traction control, odour management, and water quality.
Earth Innovations has successfully established distribution throughout Canada including retailers such as: Home Hardware, The Home Depot, Acklands Grainger Inc., Ace Hardware, True Value, Federated Co-Op, Overwaitea Foods, and others. The products are also available nationally in the United States through Do It Best Stores, Grainger Limited, amazon.com, and other online retailers. Earth Innovations also brings a long-standing supply relationship with a USA based premium zeolite supplier.
Mr. Ray Paquette, CEO of Canadian Zeolite stated, “Bringing together the retail and industrial/commercial focus of Canadian Zeolite is an obvious and complimentary mix. The acquisition will allow the company to leverage Earth Innovations’ platform by adding our products and to better serve our increasing commercial and municipal client base. We will continue to develop new innovated products with access to immediate distribution channels through the relationships developed by Earth Innovations.”
Pursuant to the terms of the LOI, the Company will issue the Seller 3,000,000 common shares of Canadian Zeolite and the shares shall be subject to an 18 month escrow schedule. In addition, Canadian Zeolite will pay $100,000 in cash payable in two instalments.
There was some key wording buried in the press release that gives a hint of what may be coming, “Canadian Zeolite continues to pursue value-add acquisitions in the growing zeolite industry.” What may they be looking to acquire is anyone’s guess, but it shows that management is looking to build an actual company with recurring and increasing revenue. Executing on that plan is another thing, but they seem to be making good strides.
On September 5th, Canadian Zeolite announced that they had retained Renmark Financial Communications Inc. for a 6 month term to, “…reinforce Canadian Zeolite Corp.’s profile in the financial community and enhance the visibility of our Company. We chose Renmark because its standards and methodologies fit best with the message we wish to communicate to the investing public.” Renmark’s clients include companies with market caps into the billions, some into the tens of billions, so they definitely bring a good pedigree in getting the Canadian Zeolite story out to the investing world. Renmark has developed an impressive database of over 800 financial advisors across North America which they are in contact with regularly so once things really get rolling with CNZ, there will be lots of eyes on the company.
In its first day of trading since the acquisition was announced, CNZ traded a little over 780,000 shares. For a company with a low float of just over 30,000,000 shares, volume days like this can move a stock and it showed with the stock price jumping 14.29% on Tuesday’s trading. Canadian Zeolite stock is also a past mover, around this time last year the stock went from $0.42 to a high of $1.95 over a one month period. With many more pieces in place now including repeat customers, acquisitions bringing revenue, retail exposure in some big name stores, Renmark raising awareness, and whatever else the company has in store for us, Canadian Zeolite is most certainly building a company.
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The Author of this article owns share of Canadian Zeolite Corp.
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