(March 4, 10:05 a.m.) Planet Organic Health Corp., Edmonton, Alberta, has signed a letter of intent to buy all shares of Santa Cruz, Calif.-based New Leaf Markets, for $9.75 million.

Rex Stewart, general manager and co-owner of the five-store chain of organic markets, said the letter of intent was signed in January, and the acquisition would be final April 1.

He said three of the five stores, with 225 employees, are included in the acquisition. The two remaining stores are franchises and will continue with similar relationships with Planet Organic.

“We have a lot of expansion in the works and we, as a group of owners, went searching for capital, looking into the equity markets and this came up as the best opportunity,” he said. “We’re opening another store in Half Moon Bay (Calif.) in June, and another big store on the west side of Santa Cruz that just got approved.”

The stores range from 5,000 square feet to 22,000 square feet. He said the intention is to use the infusion of cash to bring all of the stores up to a 15,000 to 20,000 square-foot range.

Stewart said the stores’ formats are similar to Whole Foods markets. They buy much of their fresh organic fruits and vegetables from local growers.

“We’ve got the meat department and the deli,” he said. “Produce is our leading department, representing almost 20% of sales.”

Stewart said the company gives a percentage of its profits to community charities.

He said the nice thing about deciding to go with Planet is that the Canadian company will allow New Leaf to continue with its community giving and employee programs.

“They came to the table with a different way of looking at things versus just loaning us money,” he said. “It felt like a good match.”