SAINT JOHN – The deal Millennia Tea struck with a Dragons’ Den judge on the most recent episode of the show has fallen through because of Jim Treliving’s investment with another Canadian tea company, Steeped Tea.
Treliving, best known as the owner of the Boston Pizza chain, pitched his ownership stake in Steeped Tea as an asset to Tracy and Rory Bell when he offered them $100,000 for a 20 per cent stake of Millennia Tea on Thursday night’s episode of Dragons’ Den.
“I’m in the tea business as you know from this show, and it’s done extremely well,” he told the Bells after they made their pitch. “I think that you’ve got something here, and I’m going to make you an offer because I think I can do something with you with the distribution we have.”
After the episode was taped in April, Treliving was very optimistic about the new partnership as they began the due diligence process. People from the Treliving Management Services reviewed Millennia Tea’s books and business plan and got to know the Bells better as people.
“That all went really well and all indications were that everyone was excited and they even talked about trying to expedite our formal partnership and try and get everything solidified by the start of fall,” said Tracy in a phone interview Friday afternoon.
The Bells, pioneers of a flash-frozen tea line that best preserves its antioxidant qualities, then went to the Las Vegas world tea expo after the show taping and impressed renowned tea experts and writers from around the world. They also won best new product in the innovation category.
“It’s the show to attend for high-end teas in the world, there are more than 50 countries represented [there],” said Tracy. “Treliving Management Services was really excited about that.”
Then near the end of the summer, they got what Tracy said was a “heart-breaking” call. Treliving told the Bells they had a non-compete agreement with Steeped Tea it had to honour.
“So if there’s any indication any that [Millennia] could be a direct competitor to [Steeped Tea] then they have the right to call this deal off,” said Tracy. “Unfortunately the non-compete [agreement], in the end, made it so that our deal did not go through.”
The Bells talked with the owners of Steeped Tea about a potential partnership between the companies, but ultimately neither one of them was interested in joining forces.
Even though it didn’t work out, they still have a good relationship with Treliving and Steeped Tea. They’ve also begun building the distribution networks they were hoping Treliving would bring to the table. They also have access to the capital they need to build the company at this stage of its development.
It also worked out better in the long run, says Tracy, because they were giving Treliving a 20 per cent stake in the company for only $100,000. If things work out as planned, it could be worth considerably more than that.
“In the end, we feel as though it works out for the best,” said Tracy. “We are still 100 per cent owners of our company and they say equity is cheap early and it’s expensive later on. So we’re happy to be able to keep the keep our entire company for as long as we can.”
Rory agreed the valuation of the company would continue to rise. He said a 20 per cent stake would cost more now that it did when Treliving made his offer in April. In any case, he says they don’t need the investment capital now, but they may sometime in the future.
“It’s not something that we’re seeking right now,” said Rory. “I think we’re just going to take it to the next level. Obviously, it takes money to run a business, so when we need that investment we will seek it out.”
They have no regrets about appearing on Dragons’ Den only to see the deal fall through. They know it was great exposure for Millennia Tea, and it also educated people about their innovative new product.
“The publicity is terrific,” said Tracy, “but the chance to get in front of a national audience and really provide a bit of education about what we do and why we do it, there is immense value in that.”