May 1, 2023
Blank-check firm bite to take stake in Canadian food company
Bite Acquisition Corp., a blank-check company led by a former Merrill Lynch executive, plans to merge with Canadian plant-based food company Above Food Corp.
The deal will provide about US$44 million in gross proceeds to Regina, Saskatchewan-based Above Food, according to a statement Monday, confirming an earlier report by Bloomberg News. It expects to use the money to pay to develop facilities and for working capital.
Above Food owns grain terminals and railway infrastructure for moving food commodities and is also a supplier of ingredients, private-label packaged goods and other food products. It has a small lineup of brands including Tuno, a plant-based tuna alternative, and Loma Linda, which sells simple vegetarian meals in packages.
Specialty ingredients and packaged goods have significant room for growth, President and Co-Founder Martin Williams said in an interview. Those two categories could rise to 60 per cent of revenue this year, from about 40 per cent last year, he said. “We focus on staples — things that go into the grocery cart every day.”
Bite, which focuses on the food and restaurant sectors, closed a $200 million initial public offering in early 2021 during a boom in blank-check offerings. The popularity of such investment vehicles has since soured amid tighter credit and greater scrutiny from regulators, and Bite transferred its listing from the New York Stock Exchange to the NYSE American board earlier this year.
The special-purpose acquisition company is led by Alberto Ardura Gonzalez, a former investment banker with Merrill and Deutsche Bank in Latin America.
Above Food was established in 2019 and announced a merger a year later with Purely Canada Foods, a producer of plant-based proteins. Its shareholders will maintain about a 70 per cent stake after the deal, according to the statement.
The companies said the transaction implies an enterprise value of more than $300 million. Bank of Montreal’s capital markets division and EarlyBirdCapital are the financial advisers to Bite.
Bite Acquisition rose 0.4 per cent to $10.35 at 1:38 p.m. in New York.