Coho Collective Kitchens (TSX-V:COHO) today closed its deal to buy Purebread Bakery Inc., which has seven B.C. locations, for $10.2 million in cash, shares and a vendor-take-back note.
Purebread operates two bakeries in Whistler, as well as ones in Kitsilano, Mount Pleasant, Gastown, Squamish and the Vancouver International Airport (YVR).
"With this strategic move, we are committed to enhancing Purebread's footprint across Canada," Coho's CEO Andrew Barnes said in a news release.
Purebread's two co-founders, Paula and Mark Lamming, will stay with the company in a consulting capacity, according to Coho.
Coho said that Purebread has been profitable for more than 15 years. Its newest location, which opened at YVR in June, increased its monthly revenue by 30 per cent, with annual revenue on a trailing basis being about $11 million, as of July, according to Coho.
"We're pleased that customers in new markets will have the chance to experience Purebread's high-quality baking as the business continues to expand under Coho's stewardship," Mark Lamming said in a release.
The transaction will see Purebread's owners get $8.5 million in cash, while there is also a $1.5 vendor-take-back note and one milliion shares of Coho provided to a vendor of Purebread. Coho's shares closed trading today at $0.20 so that share provision would be valued at $200,000.
Coho's share price was up 11.11 per cent today on what was heavy volume for the thinly traded stock. Only about $6,500 worth of shares were traded today, whereas the average total daily trading volume for the company's shares in the past 65 days would be worth $2,144 at today's share price.
Coho announced its plan to buy Purebread in May, and the final terms of the transaction on Sept. 12.