Forbidden Spirits Distilling Corp. (TSX.V: VDKA) entered into a non-binding letter of intent to acquire Niagara Falls Craft Distillers Ltd for CAD 5.7 million on March 4, 2022. The purchase price includes CAD 4 million payable in cash and the issuance of 1.12 million common shares in the capital of Forbidden Spirits.

Forbidden Spirits intends to use the net proceeds from the Private Placement to fund the acquisition. If the transaction is completed, Forbidden Spirits anticipates acquiring approximately CAD 1.55 million in long term debt held by Niagara Falls Craft Distillers. Niagara Falls Craft Distillers reported revenues of CAD 9 million and EBITDA of CAD 0.9 million in 2021.

Completion of the transaction is subject to a number of conditions, including, but not limited to the entering into of a definitive agreement by April 15, 2022, the completion of satisfactory due diligence by each of the parties, the approval by the directors and shareholders of Forbidden Spirits and Niagara, receipt of all requisite regulatory approvals, including the approval of the TSX Venture Exchange and/or governmental authorizations and consents and Forbidden Spirits obtaining requisite financing on terms and conditions satisfactory to it. As of May 16, 2022, the transaction is subject to entering into definitive agreement by June 30, 2022. The transaction is expected to close in the summer of 2022.

The transaction is expected to be immediately accretive to revenues for Forbidden Spirits.