Investors approve as eSense signs new JV agreement to develop advanced sanitiser products
Health & Biotech
Health & Biotech
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Special Report: The deal will see eSense join forces with the parent company of WA-based winemaker and distiller Wise Wines.
eSense (ASX:ESE) continued its strong run of recent deal flow this morning, announcing a joint venture to develop sales opportunities for its plant-based extraction technology.
The latest partnership is with Wise Winery, a family-owned business located near WA’s Margaret River region. Since the outbreak of COVID-19, the company has been using its facilities to develop and sell ethanol-based sanitiser products in response to a national shortage.
The two sides will now look to build out the product offering, with a range of ethanol-based sanitisers infused with eSense’s unique terpenes (nutrients extracted from plants).
The incorporated joint venture will be 50 per cent owned by eSense and Wise, subject to mutual due diligence and the completion of a shareholders’ agreement.
The JV will then place an initial order for 2 million units of terpenes, equal to around $US600k (~$900k) in value.
eSense CEO Itzik Mizrahi said the JV agreement “validates eSense’s updated commercialisation model as well as the growing recognition of terpenes and their unique and varied qualities”.
“This binding agreement will see eSense’s terpenes used in a premium product to be delivered straight to consumers.”
The deal follows a separate binding joint venture eSense announced earlier this week with ANC Enterprises — a manufacturer and wholesaler of high-quality, Australian-made cosmeceutical products.
To advance production, Wise has already shipped 1.1 litres of ethanol produced from its distillery to the eSense laboratory in Israel. The terpene-infused formulation is now expected to be completed within 90 days, at which point the JV company will be incorporated and manufacturing will commence.
In addition, it is “not anticipated that the terpenes infused sanitiser products will require TGA approval because they will be classified as cosmetics (and therefore exempt)”, eSense said.
The recent run of deal flow didn’t go unnoticed by investors, as increased demand saw ESE shares climb by more than 14 per cent at the opening bell.
Under the terms of the deal, eSense will provide a cash contribution of $200,000 for operational expenses, while Wise will provide up to $200k worth of sanitiser ingredients.
The order will be partially funded up front up to the value of $US200k (~$290k), while “the balance of the order will be paid for from the proceeds of product sales”, eSense said.
The completed products will be sold using the recognisable Wise Winery brand name, leveraging Wise’s well-developed distribution channels across the Australian market.