Published on : Tuesday, July 23, 2019
Publicly held Vystar has acquired Rotmans Furniture here in a cash and stock deal expected to firm up Vystar’s liquidity and open up growth prospects for both companies.
Under the terms of the agreement, which was consummated over the weekend, Vystar, the developer of a specialized natural rubber latex and other eco-friendly products and technologies, is paying $2.03 million for the retailer. Vystar will pay 25% in cash over four to eight years and the rest in restricted stock. The stock conversion will take place following a planned move by Vystar from the Over the Counter market to a listing on NASDAQ.
Steve Rotman, who remains CEO of both companies, said that up-listing process could take six months to a year.
The purchase is expect to significantly increase revenues for Vystar, which posted a loss of $5.4 million on revenues of $342,049 last year, while also providing needed warehousing and distribution infrastructure. Rotmans, meanwhile, sees the acquisition as the quickest and least expensive way to access the capital markets to fuel its own expansion plans, Rotman said, and it “provides for orderly ownership/management succession.”
Rotman said the retailer plans to grow its business beyond its current geographic base, drawing consumers primarily from a roughly 40-mile radius in central Massachusetts. He sees the retailer becoming a bigger player throughout in New England, then in the Northeast and eventually nationally. Growth plans include brick-and-mortar expansion but more so involves e-commerce expansion into new regions.
In the release, Rotmans billed itself as the largest furniture and flooring store in New England with its 200,000-square-foot Worcester, Mass., location, 150 employees and sales last year of about $30 million. Vystar had already been operating in space at Rotmans and will now be fully headquartered there.
Source: furniture today