Ecofibre Limited (ASX:EOF) entered into an asset sale agreement to acquire portfolio of businesses and assets of TexInnovate, Inc. for $42.2 million on July 29, 2020. Out of the total consideration, $21 million will be paid at completion and remaining $21 million will paid as earn out in three equal tranches on third, fourth and fifth anniversaries after completion. Each such payment will consist of 50% cash and 50% Ecofibre shares at the scrip value. Earn out is subject to the acquired businesses delivering $6 million EBIT for two consecutive annual periods. Portfolio of businesses and assets of TexInnovate, Inc. is consists of Triad Polymers, Trident Fibers, Fibex, Knitmasters and business of TexInnovate. To fund the cash component payable at completion, Ecofibre has conducted a placement under its Listing Rule 7.1 capacity to existing institutional shareholders of $29.5 million in aggregate at an issue price of $2.50. Ecofibre intends to employ all of TexInnovate’s staff at completion. Transaction is subject to satisfactory due diligence by Ecofibre over a 30-day period. The due diligence period is completed on August 21, 2020. Transaction is expected to close on September 1, 2020.