Distributor Stran & Company, Inc. (PPAI 161542, D10) in Quincy, Massachusetts, has announced, along with Long Blockchain Corp (LBCC), that they have entered into a non-binding letter of intent to merge their businesses. Long Blockchain Corp. is the holding company for the wholly-owned subsidiaries Stran Loyalty Group—a collaboration with Stran that began in 2018 and is focused on providing loyalty, incentive, reward and gift card programs to corporate and consumer brands—and Long Island Brand Beverages.
Andy Shape is the CEO and a director of LBCC as well as the president of Stran. Accordingly, LBCC has formed a special committee comprised solely of disinterested directors to negotiate the terms of the merger, and this special committee has engaged an independent third-party to provide a fairness opinion on the transaction. If the proposed transaction is completed, LBCC would be renamed to reflect the new primary focus of the business and its board of directors would be restructured to include individuals with experience in the promotional solutions industry. Andy Shape would remain CEO and a director of the combined group.
“We’re excited to expand Stran’s visibility through this proposed transaction,” says Shape. “We bring more than 25 years of experience building strong partnerships, cutting-edge technology solutions and innovative, custom branding programs that help our customers extend the loyalty of their brands. We see this transaction as an ideal platform for further growth opportunities for the Stran family—including our partners, customers, employees, and current and future shareholders.”
William Hayde, independent director of LBCC and a member of the special committee, adds, “Stran has been a fantastic partner over the past year in establishing our loyalty program business operated through Stran Loyalty Group, which has grown nicely. Through this venture, we developed a stronger appreciation for the opportunities within this industry, which led us to this proposed transaction. We believe this was a natural next step for both companies, as well as our partners and shareholders.”
The letter of intent contemplates an all-stock transaction pursuant to which LBCC would form a wholly-owned subsidiary which would merge with and into Stran, with Stran surviving as a subsidiary of LBCC and as the primary operating business. Stran Loyalty Group would remain as a separate subsidiary focused on loyalty programs. Completion of the transaction is subject to, among other things, the completion of a definitive merger agreement between the parties and the satisfaction or waiver of the closing conditions to be included in such agreement, which are expected to include the conclusion of the sale of LBCC’s beverage subsidiary. LBCC entered into an agreement for the sale of the beverage subsidiary to ECC Ventures 2 Corp.
