Curaleaf To Enter European Market With US$286 Million Acquisition

Curaleaf Holdings (CSE: CURA) this evening announced that it is making a move into European markets. The US-focused cannabis operator has agreed to acquire that of EMMAC Life Sciences, whom is reportedly the largest vertically integrated independent cannabis firm in Europe.

The acquisition will see Curaleaf pay base consideration of US$286 million, which will see 15% paid in cash, or $42.9 million, while the remainder is to be paid via subordinate voting shares. Contingent consideration of up to $57 million will also be paid in subordinate voting shares and cash at the same ratio.

EMMAC currently has operations across the UK, Germany, Italy, Spain and Portugal, where it currently has cultivation, processing, distribution, and R&D operations. An operational presence is also reportedly in place in several EU nations currently enacting new medical cannabis programs.

The current management team of EMMAC is expected to continue to run the day to day operations of the firm. Plans to expand operations are already underway, with a goal of exceeding ten tons per year of cultivation by 2022 to facilitate further growth in the region.

Notably, the transaction consists of a related party transaction due to Executive Chairman Boris Jordan having a profit interest in the transaction, as well as convertible debentures that represent an 8% interest in the European firm via Measure 8 Ventures.

A total of 16.8 million shares are to be issued in connection with the transaction, representing post-transaction ownership of 3% of Curaleaf. Shares issued will be subject to a lock-up arrangement as well.

The transaction is currently slated to close in the second quarter of 2021, subject to customary conditions and regulatory approval.

Curaleaf Holdings last traded at $20.70 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.