Flowr Corp Closes On Terrace Acquisition, Share Structure Balloons

The Flower Corporation (TSXV: FLWR) has completed its acquisition of Terrace Global (TSXV: TRCE). The firm was acquired via a plan of arrangement that saw 0.4973 Flowr shares issued for each Terrace Global share, resulting in significant dilution to the firms share structure with a total of 144.6 million shares being issued under the transaction.

The acquisition effectively results in the European joint venture owned by the two firms coming under whole ownership by that of Flowr. The acquisition also strengthens the firms financial position as a result of Terrace’s cash position, with the firm now having a combined $23.2 million in cash, while annual synergies are expected to amount to $2.0 million.

Further strengthening the firms balance sheet is the subsequent announcement that the company has seen a total of $16.4 million in convertible debentures converted ahead of maturity. A further 47.8 million common shares were issued in connection with the conversion, while the company has a total $5.1 million in debentures remaining outstanding, along with total debt of $31.7 million.

However, the firms shares outstanding has more than doubled, with the company having 139.8 million shares out as of September 30. Shares issued to acquire Terrace will bring that total to roughly 284.4 million, while the 47.8 million issued in connection with the conversion of debentures pushes that figure even higher to roughly 332.2 million.

As part of the transaction, the firms CEO Vinay Tolia has stepped down from his role with the company, effective at the end of February. Tolia will however remain on the firms board of directors. Lance Emanuel, currently President of the company, will assume the role of interim CEO until a sutiable replacement is found.

The Flowr Corporation last traded at $0.47 on the TSX Venture.

Information for this briefing was found via Sedar and the Flowr Corp. 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.

Leave a Reply