SNDL: Canaccord Reiterates Ratings Following Superette Transaction

On August 31, SNDL Inc (NASDAQ: SNDL) announced that they agreed to acquire all of the business and assets of Superette substantially through a “hybrid asset purchase and ‘reverse vesting’ transaction.” The assets acquired consist of six Superette retail locations in Toronto and Ottawa.

SNDL noted that Superette would be returning to the court on September 9 to seek approval of the sale of the assets. SNDL’s CEO, Zach George, says, “The Superette team has worked tirelessly to create an immersive and differentiated experience within the cannabis community. The bid seeks to further solidify SNDL’s position as a prominent multi-banner cannabis retail operator.”

SNDL has agreed to provide Superette with $2.1 million in pre-CCAA and debtor-in-possession financing, which will be used to allow Superette to continue its day-to-day activities during the CCAA Proceedings.

SNDL currently has four analysts covering the stock with an average 12-month price target of US$4.51, or an upside of 66%. Out of the four analysts, one has a strong buy rating, one analyst has a buy rating, and the last two analysts have hold ratings. The street high price target sits at US$6, representing an upside of 120%.

In Canaccord Genuity Capital Markets’ note on the news, they reiterate both their speculative buy rating and US$4.25 12-month price target, saying that this will help Sundial deepen its Canadian retail strategy.

Canaccord says that Suprette stores are focused “on providing high-quality customer experience through implementing concept-based designs in its retail stores.” They add that the stores carry a variety of offerings, which include its own non-cannabis branded merchandise.

Canaccord believes that this transaction showcases SNDL’s importance and focus on the retail dispensary business in Canada. They write, “Superette will further support SNDL’s multi-banner cannabis retail strategy.” They believe this will be one of many announcements SNDL will make over the next few months.

Information for this briefing was found via Sedar and Refinitiv. 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.

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