It may have been delayed by two years, but it appears that Tryke Companies, whom operates as Reef Dispensaries, is finally going to be acquired after all. Originally set to be acquired by Cresco Labs (CSE: CL) in 2019 for US$282.5 million, the company will now instead be acquired by Curaleaf Holdings (CSE: CURA) for US$286 million.
Deemed a multi-state operator, Reef Dispensaries currently has operations across the states of Nevada, Utah, and Arizona. The firm currently operates six locations in total, two of which are in Arizona, while four are in Nevada. Its products meanwhile are said to be sold at fifty separate locations as well.
The transaction will see Curaleaf pay US$40 million in the form of cash at the time of closing, while a further $75 million in cash is to be paid out in equal installments on the first three anniversaries of the transaction closing. The transaction will also see the issuance of 17 million shares, which will be doled out equally on the first three anniversaries of the transaction as well. Finally, a small earn-out of 1.0 million shares is eligible to be paid out in 2023 based on certain EBITDA targets being met.
The transaction is reportedly expected to improve margins and free cash flow, with Tryke currently posting EBITDA margins of 35%, while expected revenue for 2021 is $110 million.
The acquisition is currently slated to close in the second half of 2022.
Curaleaf Holdings last traded at $12.50 on the CSE.
Information for this briefing was found via Sedar and Curaleaf Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
