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Avant Brands bids on failing Flowr’s Okanagan assets

Published on November 1, 2022 by David Wylie

Photo: The Flowr Corporation/Investor deck

Avant Brands has made a ‘stalking-horse’ bid to buy Flowr Okanagan, which has recently gone into creditor protection.

Avant announced Tuesday it’s made a binding-offer to purchase the troubled Kelowna-based Flowr. The $3.88 million purchase price would include Flowr’s Kelowna (K1) growing facility.

Were the bid to be accepted, Avant says the deal would increase its production capability by 60%, bumping its capability up to 185,000 square feet.

“If no other offer superior to ours is placed then we are the winning bid and will acquire them,” says Norton Singhavon, founder and CEO of Avant.

“We may or may not continue bidding. Stay tuned…”

Avant has BLK MKT and Tenzo among its brands, and has production facilities in the Okanagan, Alberta, and Ontario.

  RELATED: Wilting Flowr files for creditor protection, seeks $2M loan

The deal would be made through an Avant-controlled numbered company, 1000343100 Ontario Inc. It would acquire all of the issued and outstanding shares in the capital of The Flowr Group (Okanagan) Inc., a subsidiary of The Flowr Corporation.

The sale is subject to approval by the Ontario Superior Court of Justice.

It’s anticipated that the numbered company will change its name to Avant Brands K1 Inc. prior to closing.

Avant looking for more growing capacity

“Continuing on from a strong record third quarter, we anticipate that the overall global demand for Avant’s products exceeds our current output,” says Singhavon in a news release.

“As a result, Avant has entered into the Stalking Horse Purchase Agreement in order to satisfy this demand. Flowr has developed an 85,000 square foot facility built to GMP standards, which is conveniently located in Kelowna, British Columbia, making this a natural fit for the Avant portfolio.”

Last month, Flowr filed for creditor protection. The cannabis producer has been suffering for some time, with deep staff cuts, sale of assets, and resignations from its leadership team, including the C-suite and board of directors.

Flowr took a $2-million debtor-in-possession (DIP) loan from Avant’s numbered company.

What is a ‘stalking-horse’ bid?

A stalking horse offer, agreement, or bid is a bid for a bankrupt firm or its assets that is arranged in advance of an auction to act as an effective reserve bid; the intent is to maximize the value of its assets or avoid low bids, as part of a court auction, according to Wikipedia.