Nepean, Ont.-based Natunola Health Biosciences Inc. and Quebec City, Que.-based Advitech Inc. are in talks to discuss merging their businesses.
Natunola produces, among other things, flaxseed and specialty natural products for the retail and food manufacturing industry. Advitech produces primarily personal care and natural health food ingredients.
According to the companies, the new entity, which would continue under the Advitech name, would focus on naturally derived specialty ingredients and health food products.
The two companies are discussing a share-swap deal, with Advitech shareholders holding 58.5 per cent of the combined business. Natunola shareholders would hold 41.5 per cent of the company, and would receive 4.75 Advitech share for each Natunola share.
The two companies say that the merger would create synergies and cost savings, while creating a more visible, competitive business.
The transaction is expected to go through within the second quarter of 2011.