Crescita Completes Acquisition of Strategic Assets of Occy Laboratory

Rhea-AI Summary

Crescita Therapeutics has finalized the acquisition of significant business assets from Occy Laboratory, including manufacturing equipment, inventory, customer networks, and intellectual property. The transaction, valued at $0.9 million, was approved by the Québec Superior Court following voluntary proceedings under the Bankruptcy and Insolvency Act. Occy Laboratory's revenue for the most recent fiscal year was approximately $1.5 million. Crescita anticipates that the acquisition will be accretive to EBITDA post-integration, aiming to accelerate growth and enhance profitability by continuing Occy’s commercial activities.

Positive

• Acquisition of Occy Laboratory's assets for $0.9 million.
• Expected accretion to EBITDA post-integration.
• Potential for accelerated growth and enhanced profitability.
• Increased customer network and intellectual property portfolio.

Negative

• Occy Laboratory's recent fiscal revenue of only $1.5 million.
• Potential risks associated with integrating acquired assets.

LAVAL, Quebec--(BUSINESS WIRE)-- Crescita Therapeutics Inc. (TSX: CTX and OTC US: CRRTF) (“Crescita” or the “Company”), a growth-oriented, innovation-driven Canadian commercial dermatology company, today announced that it has concluded the asset purchase agreement (the “Purchase Agreement”) to acquire all of the non-real estate business assets of Occy Laboratory Inc. (“Occy”), a Laval-based manufacturer and distributor of high-quality dermocosmetic products (the “Transaction”). The acquired assets include Occy’s manufacturing equipment, inventory, customer network and intellectual property (the “Assets”).

Pursuant to the terms of the Purchase Agreement, Crescita acquired the Assets for total cash consideration of $0.9 million. Occy’s revenue for fiscal 2023, its most recently completed year-end, was approximately $1.5 million.

“We are very pleased with the financial terms of this acquisition and expect that it will be accretive to EBITDA once the integration is complete,” stated Mr. Verreault. “This acquisition creates an exciting opportunity for us to accelerate growth and enhance our profitability.”

The Transaction, conducted pursuant to the voluntary proceedings undertaken by Occy under the Bankruptcy and Insolvency Act, was approved by the Québec Superior Court at a sale approval hearing on June 19, 2024, as previously announced.

Crescita will continue the commercial activities carried on by Occy prior to closing, while it integrates the Assets into its operations in the coming months.

About Crescita Therapeutics Inc.

Crescita (TSX: CTX and OTC US: CRRTF) is a growth-oriented, innovation-driven Canadian commercial dermatology company with in-house R&D and manufacturing capabilities. The Company offers a portfolio of high-quality, science-based non-prescription skincare products and a commercial stage prescription product. We also own multiple proprietary transdermal delivery platforms that support the development of patented formulations to facilitate the delivery of active ingredients into or through the skin. For more information visit, www.crescitatherapeutics.com.

Forward-looking Information

All information in this press release, other than statements of current and historical fact, represents forward-looking information within the meaning of applicable securities laws and is qualified by this cautionary note. Forward-looking information can be identified by words such as: “believe”, “expect”, “become”, “future”, “will” and similar references to future periods. Forward-looking information in this news release includes, but is not limited to, statements with respect to the acquisition and integration of the Assets, the expected impact of the acquisition on the Company’s business, strategic growth plan, long-term vision, expansion opportunities and market position, the expected closing date of the acquisition and expectations with respect to Occy’s continued commercial activities.

Forward-looking information is neither historical fact nor an assurance of future performance. Instead, it based only on current beliefs, expectations, and assumptions regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions.

Because forward-looking information relates to the future, it is subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Actual results may differ materially from those indicated in forward-looking information.

Therefore, you should not unduly rely on any forward-looking information. Important factors and risks that could cause actual results to differ materially from those indicated in forward-looking information include, among others:

• economic and market conditions, including factors impacting global supply chains such as pandemics and geopolitical conflicts and tensions;
• the failure of the Assets and operations acquired by Crescita to achieve expected financial results;
• the failure of the Company to effectively integrate the Assets into its operations;
• the failure of the Company to execute on anticipated growth and innovation strategies involving the Assets;
• the impact of Occy’s proceedings of the Bankruptcy and Insolvency Act on the Assets, including relationships with customers, suppliers and employees;
• the degree or lack of market acceptance of the acquired products;
• the Company’s ability to retain key personnel following closing of the transaction; and
• manufacturing and supply risks;
• other risk factors described from time to time in the reports and disclosure documents filed by Crescita with Canadian securities regulatory agencies and commissions, including the sections entitled “Risk Factors” in the Company’s most recent annual Management’s Discussion and Analysis and Annual Information Form, which are available on Crescita’s profile on SEDAR+ at www.sedarplus.ca.

As a result of the foregoing and other factors, no assurance can be given that future results, levels of activity or achievements indicated in any forward-looking information will actually be achieved. Any forward-looking information in this press release is based only on information currently available to management and speaks only as of the date on which it is provided. Except as required by applicable securities laws, Crescita undertakes no obligation to publicly update any forward-looking information, whether written or oral, that may be provided from time to time, whether as a result of new information, future developments or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240626660445/en/

FOR MORE INFORMATION, PLEASE CONTACT:

Linda Kisa, CPA, CA

Vice-President, Reporting and Corporate Affairs

Email: lkisa@crescitatx.com

Source: Crescita Therapeutics

FAQ

What assets did Crescita Therapeutics acquire from Occy Laboratory?

Crescita acquired Occy Laboratory’s manufacturing equipment, inventory, customer network, and intellectual property.

How much did Crescita Therapeutics pay for the assets of Occy Laboratory?

Crescita paid $0.9 million for the assets of Occy Laboratory.

When was Crescita Therapeutics' acquisition of Occy Laboratory approved?

The acquisition was approved by the Québec Superior Court on June 19, 2024.

What was Occy Laboratory's revenue for the most recent fiscal year?

Occy Laboratory's revenue for the most recent fiscal year was approximately $1.5 million.

What impact is expected from Crescita Therapeutics' acquisition of Occy Laboratory?

The acquisition is expected to be accretive to EBITDA, accelerate growth, and enhance profitability for Crescita Therapeutics.