On April 22nd, Verano Holdings (CSE: VRNO) announced that they acquired two cultivation licenses in Pennsylvania, one of which is operational with 62,000 square feet of cultivation space, and six dispensary permits for U$175.5 million cash. The transaction is reportedly made up of U$66 million cash, U$49.5 million in shares, and a potential earnout of up to U$31.5 million. U$60.0 million is then to be split at an undisclosed rate between cash and shares.
Verano currently has five analysts covering the company with a weighted 12-month price target of C$39.60. One analyst has a strong buy while the other four analysts have buy ratings. The street high comes from Beacon Securities with a C$47 price target, while Canaccord Genuity has the lowest at C$35.
In Canaccord’s note, Matt Bottomley reiterates their speculative buy rating and C$35 price target. He believes these acquisitions are solidifying the companies ability to compete for one of the leading operators in Pennslyvania. He calls Verano a “Diversified MSO with leading exposure in IL, FL, PA, and NJ.”
Bottomley says “Verano has been extremely active in targeting M&A to grow its exposure in many of its core markets.” They now have 74 dispensaries running, along with Pro-forma locations sitting at 105 stores, with their recent acquisitions of 5 stores in Arizona, 15 stores in Pennsylvania, 2 in Illinois, and 1 in Ohio.
Bottomley makes note that they believe all of Veranos proforma U$200 million cash is now been allocated to their various M&A since coming public. Bottomley also says that management has noted that they are potentially looking to lever up with various debt instruments as they remain one of the most under-levered MSO’s.
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.