Previously Published to Benzinga: The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.
Last week, ParcelPal Logistics Inc. (OTCQB: PTNYF), a US and Canadian-based organization specializing in last-mile delivery services and logistics-related solutions, announced that it would acquire another well-known and currently unnamed U.S. delivery service, citing a “letter of intent” between both parties after almost 8 months of successful, rapidly-growing co-operations at the company’s west coast facility.
In October, ParcelPal announced an LOI for its second acquisition. The company believes they should see traction heading into 2022, as the acquisition could close by the end of the month or early January.
The Fine Details of Acquisition
Through this acquisition, ParcelPal projects a gross revenue of about $1.4 million during the first 12 months of operation, and the total purchase price is expected to match all revenue during this period of time. As part of the deal, ParcelPal plans to acquire 100% of all outstanding assets and all future revenues generated from this specific delivery service location.
As part of this acquisition, the company will also acquire its customer base, including the accounts of another unnamed, major global delivery service provider not currently served by ParcelPal or its other subsidiaries. This deal opens the company up to further expansion in the United States as the company recently closed its first acquisition, diversification of its existing client portfolio and other opportunities deemed to drive immediate growth to its topline gross revenue.
The letter of intent dictates that a definitive agreement has been made based on an earn-out schedule with 60% of the entire purchase payable in cash, with 40% of common stock going to former owners based on the market price at the time of acquisition. The closing price of common stock will follow once the acquisition has been made official.
ParcelPal currently anticipates that the cash portion of the purchase price will be paid in “2 to 3 tranches beginning on the closing date” and will come from either existing cash or the combination of cash and equity. It could also come from a non-brokered private placement financing.
The actual terms will be negotiated closer to the date of acquisition, and shareholders will be updated following the actual buy and upon closing of any interim financing that should occur.
Who Is ParcelPal?
ParcelPal is a customer-driven courier and logistics company, connecting people and businesses through a larger network of couriers in the United States and major Canadian cities, including Vancouver, Calgary and Toronto. This acquisition would further expand its footprint across the western U.S. and grow its presence in health, pharmacy, meal-kit deliveries, retail, and grocery verticals, putting it in direct competition with services like Amazon.com Inc. (NASDAQ: AMZN), Walmart Inc. (NYSE: WMT), Instacart, Grubhub, DoorDash Inc (NYSE: DASH) and Blue Apron Holdings Inc (NYSE: APRN).
“This is another significant milestone for the company,” stated Rich Wheeless, CEO of ParcelPal Logistics, “As you may recall, we completed our first U.S. acquisition about a month ago. This proposed new U.S. acquisition is very important because the would-be customer involves a global service provider that is non-Amazon related, involves a rapidly growing site and the would-be customer is among the gold standard for delivery providers in the logistics space.”
He continued, “This second acquisition will not only add additional significant revenue but is also expected to serve as a stepping-stone for further U.S. expansion and increased client diversification opportunities for us. We are thrilled to be working with the acquiree’s team and are pleased that they share our vision for the strategic direction of ParcelPal and the streamlined delivery services path, based upon our plan that was initially developed in 2020.”
But That’s Not All
In addition to its recently announced LOI for its second West Coast acquisition, ParcelPal also announced a service agreement with another one of Canada’s leading delivery services companies, again unnamed, which will accelerate all short-term objectives for the company in the specialty pharmaceutical services space.
This deal includes the delivery of same-day and next-day prescription drugs to different facilities, including care homes in the cities of Calgary and Edmonton to start, with other major cities to follow suit in the near future.
By accepting the terms of this agreement, ParcelPal will now provide delivery-related services on behalf of a client who serves more than 1,300 retail stores across Canada every year.
The company expects to see gross revenues of $300K to $400K from this agreement over the course of 12 months, and all future prospects are exciting to corporate executives, who deeply empathize with the health and well-being of the consumer as Covid continues to plague the world.
ParcelPal has reported record Q3 revenue and a large increase in gross margins. This improvement is coming after Wheeless began as CEO in early 2020.
For information about ParcelPal, its services, or how to invest, visit ParcelPal.com to learn more. As active as this company has been in the last year, investors could expect to see a lot more of ParcelPal in the months to come.
The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.
