TORONTO–(BUSINESS WIRE)–STEER Technologies Inc. (“STEER” or the “Company”) (TSXV: STER) (OTCQX: STEEF), an integrated ESG technology platform, is pleased to announce that on January 16, 2023 it entered into a non-binding term sheet (the “Term Sheet”) contemplating the sale (the “Proposed Transaction”) of approximately 37.5% of its digital restaurant supply business (the “Restaurant Supply Business”), which is currently indirectly held through STEER’s wholly-owned subsidiary Food Hwy Canada Inc. (“Food Hwy”), to a syndicate of strategic investors (the “Investor Group”) at a post-money valuation of approximately $48 million.
The Proposed Transaction will be structured by rolling out the Restaurant Supply Business, currently a division of Food Hwy, into a separate newly-formed company (“Newco”) valued at approximately $48 million post-transaction. The Term Sheet contemplates that STEER, Food Hwy and the Investor Group will negotiate and enter into definitive agreements in respect of the Proposed Transaction, pursuant to which it is anticipated that the Investor Group will invest a total of $18 million in cash as part of the Proposed Transaction, with $6 million expected to be received by Food Hwy and $12 million expected to be injected directly into Newco to assist with scaling up operations and growth in regards to the Restaurant Supply Business. Following the completion of the Proposed Transaction, STEER is expected to indirectly retain approximately 62.5% ownership of Newco. It is intended that the $6 million in proceeds that is expected to be received by Food Hwy in connection with the Proposed Transaction will be applied by STEER and Food Hwy to further grow and develop their Subscription-Based and On-Demand service offerings.
It is anticipated that a portion of the financing will come from certain members of the Restaurant Supply