Curaleaf Holdings (CSE: CURA) announced this morning that certain terms and conditions have changed related to its acquisition of Cura Partners, who are the owners of the Select brand. The acquisition includes all manufacturing, processing, distribution, and retail operations of the brand throughout the US.
The terms of the original all-stock transaction have changed, with the transaction originally worth approximately C$1.27 billion at the time of announcement. When initially announced, the owners of Cura Partners were to receive 95,555,556 subordinated voting shares (SVS) of Curaleaf upon closing, at a price per share of $13.30. As a result of market conditions, the transaction has changed in favour of current Curaleaf shareholders.
Under the new terms of the arrangement, 55,000,000 SVS shares of Curaleaf will be issued for the initial purchase of Cura Partners and their Select brand. Based on yesterdays closing price of $7.20, this would value the initial acquisition at approximately C$396 million. The remaining 40.6 million shares that were to be issued under the acquisition will now only be issued based on the Select brand achieving revenues of between $130 million and $250 million in retail sales of extract products. While details are murky, its believed that the awarding of additional shares will based upon stages of sales targets.
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An additional $200 million in Curaleaf shares may be issued to the current owners of Cura Partners in the event that $300 million in sales is exceeded during calendar 2020 for Select branded extracts retail sales.
The deal itself, which recently passed the required antitrust waiting period, is said to combine Select’s west coast market dominance with that of Curaleaf’s east coast market positioning.
The acquisition of Cura Partners and the Select brand is anticipated to close on January 1, 2020.
Curaleaf closed yesterdays session at $7.20 on the Canadian Securities Exchange.
Information for this briefing was found via Curaleaf Holdings. The author has no securities or affiliations related to the discussed organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
