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Be the first with the news that moves the market- Hollister Biosciences (CSE:HOLL) has signed a letter of intent to acquire cannabis distillate producer Venom Extracts
- Hollister Biosciences will pay a total of C$20 million in common shares for the acquisition
- Arizona-based Venom Extracts generated $16.4 million in revenue during 2019.
- The acquisition is expected to be finalised by March 31, 2020
- Hollister Biosciences (HOLL) was down 13.79 per cent, with shares currently trading for 12.5 cents
Hollister Biosciences (CSE:HOLL) has signed a letter of intent to acquire Arizona-based Venom Extracts.
Venom is one of the state’s largest producers of high-grade medical cannabis distillates.
Venom reported C$16.4 million in revenue and C$2.48 million in EBIDTA during 2019.
While these figures have not yet been audited, Hollister expects to see similar results when it conducts its own audit prior to finalising the deal.
Hollister CEO, Carl Saling, believes the two companies will work well together.
“We feel this acquisition will present a great deal of opportunity for synergy between Hollister and Venom, providing avenues for both companies into the Arizona, California and additional marketplaces for cannabis products.
“Venom Extracts has a highly skilled and experienced management team with a track record for operational excellence,” he said.
Hollister will pay a total of $20 million in common stock for the acquisition.
70 per cent of the amount will be paid on closing, with the remaining 30 per cent payable on the achievement of specific milestones.
Of the 30 per cent, 20 per cent will be payable when Venom reaches $30 million in revenue.
The other 10 per cent will be paid when the company reaches $40 million in revenue.
Mason Cave, CEO of Venom Extracts, said that this is a significant opportunity for the two companies to combine their shared resources and capabilities.
“We feel that our contribution on the extraction side will help diversify Hollister’s product offering and continue to build out the brand equity of both companies across multiple state and eventually global marketplaces,” he said.
Hollister stated that it will not assume any long-term debt as part of the acquisition, which is expected to be finalised by March 31, 2020.
Hollister Biosciences (HOLL) was down 13.79 per cent, with shares currently trading for $0.12 at 1:30pm EST.
