On June 1st, The Valens Company (TSX: VLNS) announced that they closed their C$40 million bought deal which consisted of the company selling almost 14 million units at a price of $3.30 per unit. Each unit gives the holder one share and one-half warrant that can be exercised at a price of $4.15 and has an acceleration clause attached to the warrant. The company says that they will be using the proceeds to “pursue opportunistic acquisitions and business expansion opportunities in the North America and international market,” as well as use $5 million from the financing for capital expenditures.
Valens has eight analysts covering the company with a weighted price target of C$4.22, or an ~34% upside. Out of the analysts, one has a strong buy rating, six have buy ratings and a single analyst has a hold rating. The street high comes in from M Partners with a C$5.00 price target while the lowest sits at C$3.50.
Off the back of this news, Haywood reiterated their C$4.50 price target and buy rating on Valens. Their analyst Neal Gilmer says that this bought deal strengthens their balance sheet. Gilmer believes that the company is now well-capitalized and will be looking for acquisitions and expansions in North America as well as internationally.
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The company also recently announced that they closed on their Green Roads acquisition, while six new products are being launched via a partnership with Verse Cannabis. Haywood has now increased their 2021 and 2022 estimates to include this acquisition. They say that this acquisition gives Valens access to more than 7,000 U.S retail locations to sell CBD in, and will allow for the Green Roads brands to come into Canada, opening up additional revenue segments.
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.
