What's Happening?
Cizzle Brands Corporation has finalized the acquisition of Flow Water Inc.'s co-manufacturing business, a transaction valued at approximately $83.75 million. This strategic move allows Cizzle to focus
on scaling Flow's profitable co-manufacturing operations. The acquisition was completed through a definitive share purchase agreement, with funding sourced from a senior secured credit facility provided by Orion Infrastructure Capital, a vendor take-back loan, and two non-brokered private placements. The acquisition is expected to significantly enhance Cizzle's revenue base, with projections indicating a contribution of approximately $21.5 million in revenue for the second half of fiscal 2026 and $46.5 million for fiscal 2027. The transaction also includes the transfer of certain brand-related assets to a company owned by the vendor, allowing Cizzle to concentrate on the manufacturing business.
Why It's Important?
This acquisition is a pivotal development for Cizzle Brands Corporation, as it accelerates the company's path to profitability and strengthens its operational platform. By acquiring Flow's manufacturing business, Cizzle gains control over a critical part of its value chain, which is expected to improve margins and accelerate cash flow. The acquisition also secures in-house manufacturing capacity, reducing costs and enhancing production reliability. This move positions Cizzle as a leader in sustainable and eco-friendly packaging, particularly in the Tetra Pak format, which is scarce in North America. The acquisition is anticipated to create operational and commercial synergies, including procurement efficiencies and expanded manufacturing flexibility, further driving profitability.
What's Next?
Following the acquisition, Cizzle Brands Corporation plans to rename the acquired entity to Cizzle Brands Manufacturing Inc., with its facility in Aurora, Ontario, becoming the CWENCH Hydration Factory. The company aims to leverage the acquisition to support the growth of its existing brands, such as CWENCH Hydration, SPOKEN Nutrition, and HappiEats, with greater efficiency. The financing package, including the senior secured credit facility and private placements, will provide the necessary capital to fund the acquisition and support post-closing working capital needs. Cizzle's management anticipates that the acquisition will enable the company to become EBITDA-positive and cash-flow positive on an accelerated timeline.
