Waterloo Region-based meat subscription service truLOCAL has been acquired by EMERGE Commerce Ltd. (TSXV: ECOM) for a total purchase price of up to CDN$16.8 million.

Founded in 2016 and based in the Communitech Hub, truLOCAL sources locally produced meat and sells it to consumers through a subscription model. The company has branched out from its Ontario base and has offices and facilities in Kitchener, Vancouver, Calgary and Chicago, according to a news release.

The company generated revenue of CDN$19.8 million (unaudited) in the 12 months ended Dec. 31, 2020, representing year-over-year growth of 130 per cent, according to the news release. Last fall, truLOCAL was ranked as Canada's 14th Top Growing Company by the Globe and Mail based on a growth rate of 3,695 per cent over the period 2017-19. 

"In EMERGE, we identified a truly founder-friendly strategic partner that deeply appreciates our culture and is supportive of our ambitious growth plans,” said Marc Lafleur, founder and CEO of truLOCAL. “We're excited to leverage EMERGE's acquisition engine and gain access to their full suite of shared services, data insights, and cross-selling with their extensive member database.” 

EMERGE acquires and operates niche e-commerce brands. It was founded in 2016 and first listed on the TSX Venture Exchange last month.

“In truLOCAL, we have acquired a profitable market leader in the lucrative food tech space that happens to be one of the fastest growing companies in Canada," said EMERGE founder and CEO Ghassan Halazon. "Throughout the pandemic, online shopping for groceries, and meats in particular, has been a bestselling vertical across both EMERGE and the e-commerce sector at large, sparking our strategic interest in the category, and eventually leading us to the formidable business that is truLOCAL under Marc's leadership."

The acquisition closed Dec. 31, 2020. According to the EMERGE news release, the total purchase price for truLOCAL “is up to $16.8 million.” The initial consideration consisted of CDN$6.5 million in cash and 4,666,667 common shares of EMERGE. Two years from the date of the transaction, EMERGE will pay deferred cash consideration of CDN$1.5 million so long as key employees, including Lafleur, remain with truLOCAL. In addition, a contingent earn-out of up to CDN$4.5 million may be payable based on overall operating performance of truLOCAL over a two-year period following closing, according to the news release.

Shares in EMERGE Commerce closed Jan. 4 at CDN$1.15, up 0.887 per cent on the TSXV.