Mr. Johann Tergesen reports
BURCON JV COMPANY, MERIT FUNCTIONAL FOODS, PARTNERS WITH BUNGE TO BRING PEA AND CANOLA PROTEIN TO MARKET
Burcon NutraScience Corp.'s joint venture company, Merit Functional Foods Corp., has received a $30-million investment from a new equity partner, Bunge Ltd., a leading international agribusiness and food company. The partnership will expedite Merit's construction of its state-of-the-art plant-based protein production facility in Manitoba, Canada, where it will produce, under licence, Burcon's novel pea and canola protein ingredients. It will be the only commercial-scale facility capable of producing food-grade canola protein in the world. Construction is well under way, and the plant is on track to be fully operational by December, 2020.
In addition to purchasing equity directly from Merit, Bunge purchased additional shares and debt from existing Merit shareholders who are Burcon's joint venture partners. As a result of these transactions, Bunge is a 25-per-cent shareholder in Merit, and Burcon is now Merit Foods' largest shareholder, owning 33.3 per cent of the plant-based protein producer.
"Burcon is thrilled to have Bunge as an equity partner in Merit Foods," said Johann F. Tergesen, Burcon's president and chief executive officer, adding: "This secures the future for Merit, which will benefit greatly from Bunge's large canola origination footprint and multinational platform. With this transaction, Burcon is aligned with a leader in the global food ingredients industry, expanding Merit's reach to new customers and consumers in Canada, North America and worldwide."
The demand for plant-based foods and beverages, including dairy and meat alternatives, is rapidly increasing. Merit's product portfolio of pea and canola protein ingredients supports the growing need for highly functional and taste-forward plant-based applications. As one of the leading processors of canola in Canada, Bunge has strong origination expertise and will supply Merit with certain critical inputs. Bunge's experience in selling canola-based products will complement Merit's patented processing technology.
"We're excited to have a global partner like Bunge recognize our mission and assist us in accelerating our plans and path to launch," said Merit's co-chief executive officer Ryan Bracken. "Bunge also holds a deep knowledge of international commodity markets, which will help reinforce our canola business globally."
As part of the transactions announced today, Bunge, Burcon and Merit's other shareholders have agreed to certain contractual rights, including a right, but not an obligation, of Burcon, in certain circumstances, to participate in a sale of all but not less than all of its shares in Merit, and that in certain circumstances, Merit will have the right to buy out from Burcon the May, 2019, licence and production agreement for an amount representing the discounted future royalties over the life of the licence agreement.
About Burcon NutraScience Corp.
Burcon is a global technology leader in the development of plant-based proteins. With over 285 issued patents and more than 250 additional patent applications that have been developed over a span of more than 20 years, Burcon has grown an extensive portfolio of composition, application and process patents covering novel plant-based proteins derived from pea, canola, soy, hemp, sunflower seed and more. In 2019, Merit Functional Foods was established in a joint venture by Burcon and three veteran food industry executives. Merit Foods is building a state-of-the-art protein production facility in Manitoba, Canada, where it will produce, under licence, Burcon's novel pea and canola protein ingredients.
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