Executives from two Canada-based specialist ingredients provider, Advitech and Natunola Health Biosciences, have entered official talks to form a new ingredients company.
Focused on the personal care and health good ingredients markets, the aim is to build up a leading company to serve both the domestic market as well as seeking out new opportunities in markets worldwide.
The focus for the company would be to develop, manufacture and market naturally derived, value added specialty ingredients and health food products based on existing technology programs shared by the two companies.
In turn, the companies believe that the joint venture will allow for increased synergies, as well as creating a business with an enhanced market position and greater visibility in the market place.
Pooling expertise to create a stronger company
“This combination represent a pooling of the expertise of two emerging personal care and health food specialty-ingredient firms to capitalize on the operational strengths of collective management, sales and marketing, R&D and manufacturing teams,” said Michael Stangel, CEO of Advitech.
Advitech was formed at the end of 2009 as a health sciences and technology business, manufacturing and marketing natural ingredients and formulations for oral and topical formulations targeted at the skin care category.
Dr. Nam Fong Han, who is CEO of Natunola Health, a company focused on flex seed derived extracts for the supplements category, added his belief that a joint venture company would particularly benefit from both complementary technologies and increased global product distribution channels.
Wholly-owned subsidiary of Advitech
The discussions, which have been formalized by a letter of intent, aim to forge a newly created wholly-owned subsidiary of Advitech, which would result in Natunola shareholders receiving common shares of Advitech, giving Advitech shareholders a 58.5 percent majority stake in the business.
The proposed board of directors would consist of seven appointees, which would include five current directors from Advitech and two nominees from Natunola.
The companies are both currently conducting due diligence tests with the aim of preparing a definitive transaction document that is expected to be sealed during the second financial quarter of 2011.