Innovation Beverage enters LOI for potential merger with BlockFuel Energy

Innovation Beverage (IBG) Group announced it has entered into a non-binding letter of intent for a merger transaction with BlockFuel Energy.The letter of intent outlines IBG’s acquisition of BlockFuel through a transaction structured as a reverse triangular merger, with a newly formed subsidiary of IBG merging with and into BFE, with BFE as the surviving entity, but with the owners of BFE receiving a number of IBG common stock equal to 90% of the total number of issued and outstanding shares of IBG common stock on a post-transaction basis. Upon closing of the contemplated transaction, it is expected that Daniel Joseph Lanskey, currently President and CEO of BlockFuel and a Director of IBG, would be appointed Chairman of the Board and CEO of IBG, and Sahil Beri, currently Chairman of the Board and CEO of IBG, be appointed as President of a newly formed Australian beverage subsidiary. Sahil Beri would also continue to serve on the board of IBG for a period of 6 months after closing of the contemplated transaction. Based on the independent fairness analysis and report conducted by Marshall & Stevens Transaction Advisory Services, the post-transaction combined company resulting from the merger of IBG and BFE is expected to have an equity valuation range of approximately $220M-$343M. As shareholders of IBG will own 10% of the combined entity upon closing, this equates to an implied post-transaction equity value for IBG in the range of $22M-$34.3M, compared to a pre-transaction valuation of $3.9M-$6.3M. BFE has signed an exclusive Letter of Engagement with Needham & Company to act as its investment banking partner. The letter of intent is non-binding and the parties intend to enter into good faith negotiations towards a definitive agreement governing the transaction, subject to due diligence review.