Evidently there is still a level of M&A occurring within the Canadian cannabis space. The Valens Company (TSX: VLNS) this morning announced that it will be making an effort to step further into the craft cannabis space via the acquisition of Citizen Stash (TSXV: CSC) via an all share transaction.
Pegged at a valuation of $54.3 million, shareholders of Citizen Stash are to receive 0.162 of a common share of Valens for every share held. Pricing is said to represent a 35.1% premium to shareholders.
The transaction itself is expected to be immediately accretive, before synergies, with the purchase price reflecting a revenue multiple of 4.3x annualized revenue for 2021, while also enabling Valens to enter the flower and pre-roll space within the sector.
The arrangement is subject to the approval by two thirds of the shareholders of Citizen Stash, with a meeting to be held later this year.
The Valens Company last traded at $3.07 on the TSX.
Information for this briefing was found via Sedar and The Valens Company. 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.