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Vystar Corporation to take over assets of NHS Holdings
Jan '18
Courtesy: Vystar Corp
Courtesy: Vystar Corp
Vystar Corporation has signed a Letter of Intent to take over assets of NHS Holdings, the exclusive US distributor of Vystar’s Vytex virtually allergen-, VOC- and odour-free natural rubber latex (NRL) foam. NHS was founded by Steve Rotman, now CEO of Vystar, and CEO of Rotman’s Furniture and Carpet, one of the US’ largest independent furniture retailers.

NHS, founded in January 2015, identifies and brings to market innovative, sustainably sourced, eco-friendly materials and components for use in the home furnishings, apparel, and other markets. NHS was instrumental to introducing Vytex foam to manufacturers for use in mattresses, and pillows.

NHS is valued at $5 million based on the last round of funding of $750,000 for 15 per cent equity in NHS. Vystar proposes to acquire NHS for $1.2 million in restricted stock, a discount of 85 per cent from the valuation. NHS’s largest shareholders are major investors and registered insiders of Vystar Corp, thus subject to insider trading restrictions.

The proposed acquisition is contingent upon finalisation of definitive transaction agreements and approvals, which are expected to proceed quickly given the makeup of NHS and Vystar’s shareholders. NHS major shareholders include Joseph Alegra, MD, owner of Lincoln Lee Investments; Keith Osborne, MD; Lam Ngoc Minh, CEO of Lien ‘A (one of the world’s largest latex manufacturers); Bryan Stone, MD, Vystar Board member; Steve Rotman; and Greg Rotman, consultant to NHS. The Rotmans are collectively forfeiting 75 per cent of their equity in NHS to facilitate the transaction on favorable terms for Vystar.

“One of our key strategies for Vystar growth that we recently announced was to augment product offerings, profit margins, and revenue through acquisition,” stated Rotman. “NHS is the logical first acquisition, as any NHS revenues will add to Vystar’s bottom line, and it is more cost effective and operationally efficient to have Vystar’s distribution in-house, particularly since the two organisations share many of the same resources.”

Rotman continued, “We anticipate increased revenue in 2018, as Vystar expects to partner with additional manufacturers in sales of multiple products, such as solid latex mattresses, toppersand pillows; gloves; and other products, which we believe will achieve higher margins in comparison to solely licensing Vytex to manufacturers. Consumers are seeking ecofriendly, durable, and biodegradable natural products that provide a healthy experience for their loved ones in place of petroleum-based plastics and memory foams. Vytex is an ideal and cost effective material to use for products to fill this demand.”

Vytex is currently used in multiple mattress lines, including Natura, Gold Bond, King Koil and Spring Air; Jeffco-manufactured components for toppers and mattresses sold to multiple manufacturers, and private label toppers and mattresses sold online. Vytex is also used in industrial adhesives, apparel padding and threads, shoes, sports equipment and electrical gloves. (SV)

Fibre2Fashion News Desk – India

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