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.
