The Valens Company (TSX: VLNS) has entered the US market. The company this morning announced that it has closed on the previously announced acquisition of Green Roads, a US-based CBD health and wellness brand.
The transaction marks the first foray into the US market for cannabinoids for Valens, with Green Roads reportedly being a leading brand within the space. The acquisition is expected to further open international markets as well, with the company in “late-stage discussions” to bring the new brand to Latin America, Asia-Pacific, and Europe, in addition to the expected Canadian entrance of the brand.
Under the terms of the transaction, Valens paid a total figure of US$40 million for Green Roads, before a $20 million earn-out arrangement is taken into account. The upfront figure is said to represent 1.8x 2020 revenue, while the earnout, which is based on EBITDA milestones for 2022, is based on 4.5x 2022 estimated EBITDA.
The purchase price, under the original terms, was to consist of US$14.6 million payable in cash, along with $25.4 million payable in common shares of the issuer. The earn-out provision may occur in either cash or shares.
The Valens Company last traded at $3.19 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.
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