WORCESTER, Mass.—Vystar Corp.'s letter of intent to acquire NHS Holdings L.L.C. is the first step in Vystar's plans for growth, according to Steve Rotman, founder of NHS and new CEO of Vystar.
Vystar's plans, according to Rotman, are to greatly expand the markets for the company's Vytex natural rubber latex, which is virtually allergen-, VOC- and odor-free.
"Our object is to bring in companies that have worked with us," Rotman said of the company's expansion plans. "We feel strongly they are companies that will work very well as part of Vystar."
Rotman did not say anything about further acquisition plans, mostly because the LOI for the purchase of assets of NHS, the exclusive distributor of Vytex in the U.S., had not yet been completed.
Vystar is working with major shareholders in completing the LOI, Rotman said in an interview. He said he expected the process to be completed by mid-February, he said.
Vystar announced the LOI on Jan. 9, about three weeks after the company revealed that Rotman had been appointed CEO and the company headquarters had moved from Atlanta to Worcester.
Besides founding NHS in 2015, Rotman also served more than 40 years as president and CEO of Rotmans, a major furniture and carpet retailer in New England. This gives him a strong background in marketing and product development, he said.
"What I did with NHS was create a synergy with Vystar," Rotman said. "I felt NHS would be an asset.
"NHS has tremendous connections in the world of foam and latex, and the board agrees," he said. "The push for the acquisition didn't come from my side so much as from the Vystar side."
NHS is valued at $5 million based on the last round of funding of $750,000 for 15 percent equity in NHS, according to a news release.
Vystar proposed to acquire NHS for $1.2 million in restricted stock, a discount of 85 percent from the valuation, the company said.
NHS's largest shareholders are major investors and registered insiders of Vystar, thus subject to insider trading restrictions, according to the news release.
"The proposed acquisition is contingent upon finalization of definitive transaction agreements and approvals, which are expected to proceed quickly given the makeup of NHS and Vystar's shareholders," the company said.