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EVE Investments (ASX: EVE) has dipped into the honeypot buy a 50 per cent stake in tea tree and honey farmer Jenbrook for a total consideration of $1.49 million.
The technology investment company entered into the agreement to acquire Jenbrook for its large asset base in organic essential oils, extracts and carrier oils, as well as its research and development into melaleuca and medical cannabis honey.
Working with Southern Cross University, the New South Wales Northern Rivers-based Jenbrook is currently exploring the health benefits of hemp honey, which is produced by bees pollinating on the nectar of medicinal cannabis plants.
Eve Investments has kickstarted its new partnership with Jenbrook by successfully completing an oversubscribed capital raising for $1.265 million, offering new shareholders a placement at 0.6 cents.
Subject to the transaction, Jenbrook's assets include therapeutic goods business EcoBotanicals, 1,000-acre tea tree facility Robyndale Farm and wholesale distribution business Naturally Aust Product Inc.
The transaction also includes the 1,147 acre Jendale Farm plantation, which has been identified as the 'birth place of the tea tree' and owns a patented extraction technique to produce high potency oils.
Eve said in a statement to the ASX that these assets will generate a strong revenue stream in the foreseeable future.
"Unaudited revenue forecasts indicate that Naturally Aus Product Inc will deliver strong revenue growth from its US customer base this financial year," said the company.
"It is expected to double its annualised monthly revenue to reach $1.6 million in June 2017, a 100 per cent increase from June 2016."
Eve says Jenbrook's leading edge in the honey market and its unique work in the medical cannabis space will also present significant growth opportunities.
"Jenbrook is currently validating the production process for a Melaleuca (Meluka) honey," says the company.
"In addition, Jenbrook is exploring the opportunity to develop a medicinal cannabis honey. Scientific validation of any active compounds in the medicinal cannabis honey with potential health benefits will be explored in the coming months."
The acquisition will be facilitated through the creation of a new company that will be a 50/50 joint venture between the two parties.
Business News Australia
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