While some operators complain about the current state of the cannabis market in California, others appear to be embracing it. Planet 13 Holdings (CSE: PLTH) is one such operating running head first into the state, announcing on Monday evening it would be acquiring Next Green Wave Holdings (CSE: NGW).
The definitive agreement entered between the two parties is largely a share-based transaction, with minimal cash outlay being involved. The arrangement will see shareholders of Next Green Wave receive 0.1081 common shares of Planet 13 for each share held, along with cash consideration of $0.0001.
The transaction is based on pricing as of December 17, implying a price of $0.465 per share at the time of signing, or a 52% premium to the closing price on that date. The transaction price is also subject to adjustment, based upon the price of Planet 13 at the time of the transaction closing.
The company has postured the transaction as enabling the expansion of its presence in the Californian market, despite recent market headwinds being experienced in the state. The firm is to benefit from the cultivation assets held by Next Green Wave, enabling Planet 13 to vertically integrate its operations and bring its portfolio of brands to the Californian market.
It’s said that the transaction is immediately accretive to 2021 and 2022 EBITDA, with Next Green Wave to own 9.2% of the resulting company following the acquisition. The transaction is slated to close in the first quarter of 2022.
Planet 13 Holdings last traded at $3.95 on the CSE.
Information for this briefing was found via Sedar and Planet 13 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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.