High Tide Inc. (TSXV: HITI) announced this morning that it has completed the previously announced acquisition of hemp-derived CBD product retailer Fab Nutrition, whom is operating as FABCBD. The agreement saw High Tide purchase an 80% interest in FABCBD for US$20.64 million, along with a three-year option to acquire the remaining 20%.
The acquisition price is comprised of US$8.08 million paid through High Tide shares and US$12.56 million paid in cash. In addition, the agreement also indicates a potential earn out bonus of US$612,000 to be paid in shares should FABCBD exceeds gross revenues of at least US$13.5 million in 2021.
Finally, the agreement also granted High Tide the option to acquire the remaining 20% equity in FABCBD for a window of three years. Under the terms, High Tide can exercise this option at an enterprise value equal to the last twelve months of EBITDA prior to acquisition multiplied by six.
FABCBD has approximately US$500,000 of working capital and US$550,000 of inventory.
High Tide Inc. last traded at $0.60 on the TSX Venture.
Information for this briefing was found via Sedar and High Tide Inc. 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.