Prime Drink Group has struck a deal to buy a majority stake in the company behind Relax Downlow, a Quebec-based ‘functional’ drinks brand.
In a statement, the group said it signed “a binding letter of intent” to acquire a 70% interest in Relax Downlow owner, 9375-4208 Quebec.
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Prime plans to carry out the transaction through a combination of shares and a cash payment to the shareholders of 9375-4208 Quebec.
According to the terms outlined in the letter, Prime Drink Group plans to issue common shares valued at C$255,000 ($179,111), at a price equal to the ten-day volume-weighted average trading price, in line with Canadian Securities Exchange (CSE) pricing policies.
Additionally, the company will make a “lump sum” cash payment of C$95,000 to the shareholders of 9375-4208 Quebec upon the closing of the deal.
The Relax Downlow founders will retain a minority stake in the company.
Relax Downlow founder and president Steven Levac – who is also a Prime Drink Group employee – said he is looking forward to working with Prime Drink Group “to take Relax Downlow to the next level”.
“This brand, which I have wholeheartedly built with my partner Dario, is now well on its way to becoming a must-have in Quebec and beyond”, Levac added.
A “recovery functional beverages” brand, Relax Downlow is developed in Quebec and approved as a “natural health product” by Health Canada.
The beverage line designed for athletes is “caffeine-free, sugar-free, and gluten-free”.
The drinks feature more than 20 active ingredients, including BCAAs, amino acids, electrolytes, antioxidants, vitamins, and minerals, and contain two calories per serving, the group said in a statement.
The brand has launched its Citrus Iced Tea and Tropical Punch flavours in an unnamed Quebec convenience store chain and the “upscale” hotel sector. Just Drinks has asked for more details.
NHL player Lane Hutson is the official ambassador of the brand.
In its 2024 investor presentation, Prime Drink Group outlined its goal of achieving C$100m in revenue within two years, driven by expansion efforts in Canada and the US.
Prime Drink Group sees the acquisition as a strategic step into a “fast-growing relaxation beverage market”, which is projected to reach C$1.3bn by 2030 with a CAGR of more than 15%, the statement added.
The group said the transaction does not qualify as a “major acquisition” under CSE regulations and consequently, shareholder approval is not anticipated as a requirement for the deal completion.
Meanwhile, the proposed acquisition is subject to the “completion of due diligence by Prime, signing of a definitive agreement, the approval of the CSE and the satisfaction of conditions customary”, Prime Drink Group added.
Given that Levac is both an employee of Prime Drink Group and an officer of 9375-4208 Quebec, the transaction is expected to qualify as a “related party transaction” under Multilateral Instrument 61-101, the statement said.
Primeau said: “This acquisition marks a new chapter for Prime, as we carry on our mission to innovate in the functional beverage sector by adding a revolutionary local brand with strong potential to our portfolio.”
In February, Prime Drink Group announced the restructuring of its bottling subsidiary Triani Canada, which operates under the name Prime Bottling.
Yesterday, the company said Roynat, Financement Agricole Canada and Banque Canadienne Impériale de Commerce have filed an application to have a receiver appointed with respect to the assets of Triani Canada.
The applicants are Triani creditors. In a statement, Prime Drink Group said: “Triani intends to oppose the application from the creditors to pursue its restructuring plan and will continue to seek alternative solutions to the appointment of a receiver.”
Prime Drink Group CEO Alexandre Côté added: “As we do not expect the hearing to be scheduled, we are currently engaged in discussions and negotiations with Triani’s creditors as we work toward a solution that supports the long-term stability and growth of Prime and Triani. We remain committed to reaching an outcome that is in the best interests of all our stakeholders and resolve the legacy issues inherited from prior management.”
