VICTORIA, BC and PORTLAND, OR, Nov. 7, 2013 /PRNewswire/ - CRAiLAR Technologies Inc. ("CL" or the "Company") (TSXV: CL) (OTCBB: CRLRF), which produces and markets CRAiLAR® Flax fiber The Friendliest Fiber On The Planet™, announced today it has finalized the purchase of a European based fiber processing company with more than 40 years of experience in the industry. The acquisition, announced in early-September, allows the Company complete operational control of the processing of its proprietary CRAiLAR Flax fiber. The facility is fully operational and will have the capacity to produce in excess of 250,000 pounds of CRAiLAR Flax fiber per week, with room to expand to one million pounds per week. The facility is located in one of most prolific flax growing and producing regions in the world.This acquisition accelerates the timeline to own and operate a wet processing facility by six to nine months and mitigates risks and potential problems associated with commissioning a new plant. Given this strategic shift for the company, the following should be noted:
- This acquisition is strategically significant for the Company, as it accelerates the timeline to cash flow break even and positive gross margin.
- The facility is operated by very experienced personnel with considerable knowledge of fiber and while in due diligence, produced the highest quality CRAiLAR Flax fiber to date.
- The Company will postpone the completion of a fully integrated facility in South Carolina until it exceeds the capacity of its European facility or a strategic partner desires a dedicated facility and supports the $14 million build-out in South Carolina.
- CRAiLAR is acquiring the facility with no capital by retiring approximately U.S. $1.2 million of the vendor's debt over a three-year period. Additionally, CRAiLAR entered into a ten-year lease and option to purchase agreement on the building housing the facility with a renewal option for an additional ten years.