Purebread Brands Inc. has signed a letter of intent to acquire Caffe Artigiano’s cafe business for approximately $7.7 million. The deal includes corporate and franchise operations in Canada, with Purebread Brands issuing around 61.5 million common shares at $0.125 per share. This represents 49% of Purebread’s outstanding shares post-transaction.
The combined business will operate 16 company-owned bakery and cafe locations, 11 franchised spots, and 7 additional Caffe Artigiano locations in development. Caffe Artigiano currently runs 9 company-owned cafes and an 11-location franchise network.
An intercompany debt of up to $4 million will remain outstanding after closing, with payments addressing this debt through an intellectual property license, rental, and purchase agreement. Existing credit facilities with Royal Bank of Canada totaling approximately $1.7 million are expected to stay in place.
The vendors will retain the right to nominate one director to Purebread’s board as long as they hold at least 10% of outstanding shares. Voting support and standstill agreements for 12 months will limit further share acquisitions without approval from independent directors.
The transaction requires completion of due diligence, definitive agreements, TSX Venture Exchange acceptance, and various approvals. The parties have agreed to negotiate exclusively until execution of definitive agreements, termination of the letter of intent, or December 15, 2026.