Offsetters Climate Solutions (TSXV: COO) on February 5, 2015, announced that it has signed a Letter of Intent that contemplates acquiring certain assets from Forest Finance GmbH of Germany. The results of this acquisition would be a significant addition to Offsetters, creating an international company with strong ties in North America and Europe as well as experience in managing natural assets across the globe.
The results of this acquisition would be a significant addition to Offsetters, creating an international company with strong ties in North America and Europe as well as experience in managing natural assets across the globe; South America, Central America, South East Asia, Africa, and North America. Effective immediately the two companies project development divisions will work together to provide a full suite of services to both existing and new clients. This will bring a new revenue stream to Offsetters by creating investment opportunities in sustainably managed forests around the globe.
Under the terms of the LOI, Offsetters will be vended companies that are owned in whole, or in part by ForestFinance. Including: 99% of the equity in ForestFinest Consulting with provisions to acquire the remaining 1%, 49% of the equity in Forest Finance Switzerland, and 15% of the equity in ForestFinance France.
These three companies work in conjunction to provide the components required to develop, finance and sell the forest services. ForestFinest has developed and managed all of ForestFinance’s projects to date and is the leading consultancy service for sustainable land use projects in the sustainably managed forest and agroforestry sector. Forest Finance Switzerland develops investment funds for institutional investors, and sells their natural asset projects to affluent individuals and family offices. ForestFinance France oversees the sales and services of ForestFinance provided to France.
In addition, Offsetters Climate Solutions will be transferred the CO2OL Natural Carbon Collection (“COOL”) brand, wholly owned by ForestFinance. COOL works with companies to develop and implement practical and sustainable climate protection strategies, including voluntary carbon offsets.
These divisions of ForestFinance offer numerous long-term investments that last up to 25 years. Some of the investments, such as their “Cacaoinvest,” starts to give returns from Cocoa sales as early as Year 5, at a forecasted return of approximately 6.6% and are directed towards individuals. There are a number of different forest investments with different terms, rate of return and starting years for their returns. Other investments, such as funds for larger projects created from Forest Finance Switzerland, are directed towards institutions, with larger investments at higher return rates than the options for individuals. All of these investment products generate income by implementing sustainable harvesting practices to the forests, that allow lumber and in the case of Cocoa, Cocoa beans to be harvested in an ecologically sound way. These practices also insure that the land is able to continue to produce commodities over a longertime span than a one-time extraction, insuring long-term revenue. These products sell for a premium as sustainably harvested products are in increased demand, and are considered a superior product.
Offsetters will issue a total of 16.815 million of its shares to ForestFinance following the completion of this potential acquisition.
Bothcompanies are excited about combining their resources and expertise. Harry Assenmacher, CEO of ForestFinance, stated, “We see great opportunities in combining resources to significantly grow investments into the agro-forestry space, developing forest-based projects that deliver real value environmentally and economically.”
Offsetters’ comments on the proposition are also positive:
“By bringing together ForestFinest’s best in class agro-forestry group, with our leading ecosystem development team we will establish a world class technical group, with a successful track record over multiple sustainable agro-forestry and forestry projects worldwide,” commented Offsetters CEO James Tansey. “We recognize there is a great opportunity to leverage our collective strengths to grow the sustainable forest and agro-forestry space to the benefit of local communities, climate and investors alike.”
Following the completion of the transaction, the new company will continue to be run by current CEO, Dr. James Tansey. Richard Focken the current CEO of Forest Finance France and member of the Forest Finance Group Management Team will be responsible for European operations. Other changes the company expects are to appoint Harry Assenmacher, founder and CEO of ForestFinance, and Dirk Walterspacher, current CEO of ForestFinest, to the Board of Directors of Offsettersand Oliver Hanke from Forest Finance Switzerland will be appointed Chief Financial Officer and Chief Investment Officer of the asset management business.
Both Offsetters and ForestFinance have confirmed that there are no finder’s fees or other similar fees to be paid to any person or party as a result of this transaction, and the completion of the transaction is subject to a number of conditions, including TSX Venture Exchange acceptance. There can be no assurance that the Transaction will be completed at all or as outlined. The combination of these two companies would create the type of international collaboration required to bring this new type of investing to a wider audience, creating larger economic benefits from sustaining the world’s forests and ecosystems. This also creates a new revenue stream for Climate Offsetters Solutions from the sales of commodities produced from these forestry and agroforestry projects in addition to the revenue generated by their carbon offsetting.
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About Offsetters Climate Solutions:
Offsetters is Canada’s largest and most diversified carbon management solutionscompany. Its team of industry leaders specializes in the origination, development and commercialization of high-quality carbon offset projects, and through a comprehensive offering of sustainability consultancy services Offsetters helps organizations understand, reduce and offset their climate impact. A merger of ERA Carbon Offsets and Offsetters, Offsetters is based in Vancouver, Canada and has worked with over 150 of the world’s most prestigious organizations including Aimia, Vancity, lululemonathletica, Catalyst Paper, Harbour Air, HSE – Entega, and Shell Canada Limited. Offsetters is publicly-listed company on the Toronto Venture Exchange (TSXV: COO) and in (FRANKFURT: 9EA). For more information, please visit http://www.offsetters.ca.
Disclosure
Ubika Research has received compensation fromOffsetters Climate Solutionsto provide analyst research coverage.
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