Village Farms Drops US$75 Million Stepping Into US CBD Space
Evidently Village Farms (NASDAQ: VFF) (TSX: VFF) has shifted its focus to the US market. The firm this morning announced that it has stepped into the US CBD marketspace with the acquisition of a Colorado-based cannabinoid focused firm.
The transaction, valued at a total figure of US$75 million, has seen Village Farms acquire Balanced Health Botanicals effective today. The transaction is stated to be immediately accretive, with Balanced Health having one of the larger hemp-based CBD brands in the US market, while also owning the online retailer known as CBDistillery.
The company is expected to provide US$30 million in annualized revenue, while operating at an adjusted EBITDA margin of 15%. The acquisition will also provide Village with established retail channels and a customer base within the US market ahead of the potential legalization of US THC-markets.
Under the terms of the transaction, Village Farms is to pay $30 million in cash for the firm, as well as US$45 million in the form of common shares, resulting in the issuance of 4.7 million shares. Shares issued in connection with the acquisition are subject to lock-up arrangements for a period of twelve months.
Village Farms last traded at $11.17 on the TSX.
Information for this briefing was found via Sedar and Village Farms International. 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.
