SNDL To Buy Superette Assets Including 6 Retail Stores, Enters Into A Bid Agreement

SNDL Inc. SNDL has entered into an agreement of purchase and sale with Superette Inc., pursuant to which it proposes to acquire substantially all of the business and assets of Superette through a hybrid asset purchase and 'reverse vesting' transaction.

Superette intends to return to court on September 9, 2022 to seek approval of, among other things, an amended and restated initial order and an order approving a sale and investment solicitation process (the "SISP"). Subject to court approval at the comeback hearing, the Stalking Horse agreement will serve as the "stalking horse bid" in the SISP, and is to be supervised by the court and conducted by PricewaterhouseCoopers Inc., the court-appointed monitor of Superette. The Stalking Horse Bid will set the floor, or minimum acceptable bid for potential alternative bids to be submitted in the SISP, which is designed to achieve the highest and best offer for Superette's business and assets.

The assets to be acquired under the Stalking Horse agreement include six Superette retail locations within Toronto and Ottawa. The Stalking Horse Bid also provides for certain intellectual property rights to white-label products under the Superette brand.

"We are excited by the opportunity to bring stability to the Superette retail business during the CCAA Proceedings," stated Zach George, CEO of SNDL. "The Superette team has worked tirelessly to create an immersive and differentiated experience within the cannabis community and the bid seeks to further solidify SNDL's position as a prominent multi-banner cannabis retail operator. Through the CCAA Proceedings, we are committed to supporting Superette through the restructuring and ensuring the continuity and preservation of the Superette experience consumers have come to know and love."

History of the Investment

On February 9, 2022, SNDL entered into a secured promissory note with Superette Inc., and certain subsidiaries, with a principal remaining amount of $4.8 million. The Financing allowed for SNDL to continue its investments into a multi-banner strategy.

In connection with the CCAA proceedings, SNDL has also agreed to provide up to an additional $2.1 million in pre-CCAA and debtor-in-possession financing for Superette for a total amount of $6.9 million. The additional financing will provide Superette with the liquidity required to operate during the CCAA proceedings and undertake the SISP.

The consideration for the Stalking Horse agreement is made up of a credit bid and set-off of debt owing to SNDL through the assumption of certain assumed liabilities and the cash payment of certain statutory priority payments and costs of terminating the CCAA proceeding and winding-down the relevant Superette entities.

Meet SNDL’s CEO Zach George and a slew of other cannabis execs, entrepreneurs, CEOs, investors, etc. at the September Benzinga Cannabis Capital Conference, Sept. 13-14 in Chicago. Get your tickets HERE and reserve your spot at the Palmer House Hotel HERE.

Photo: Benzinga; Sources: courtesy of jarmoluk and lindsayfox via Pixabay

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