- Village Farms (VFF) and Emerald Health Therapeutics (EMH) have entered into a share purchase agreement to sell Pure Sunfarms
- Under the agreement, Village Farms will purchase 36.9 million common shares in PSF, in exchange for C$79.9 million
- The purchase price will consist of at least $60 million in cash, along with two promissory notes from Emerald Health
- Village Farms (VFF) last traded on September 4, for $6.84 per share
- Emerald Health Therapeutics (EMH) also last traded on September 4, for $0.20 per share
Village Farms (EMH) and Emerald Health Therapeutics (EMH) have entered into a share purchase agreement to sell Pure Sunfarms.
Pure Sunfarms (PSF) is a joint venture between the two companies, which was established in 2017. Village Farms currently holds 41.3 per cent interest in the JV, but intends to buy all remaining interest through this agreement.
Under the agreement, Village Farms will purchase 36,985,500 common shares in PSF, which represents all remaining shares not currently held by the company. In exchange, the company will receive an aggregate purchase price of C$79.9 million.
This sum will consist of at least $60 million in cash, to be paid at the closing of this transaction. It will also include $952,237 of Emerald Health Therapeutics’ obligations under a promissory note, which Emerald Health issued to PSD in March 2020.
This promissory note may be settled, or the purchase price may be increased accordingly.
The remaining $18,947,763 of the purchase price will settled through the closing of a second promissory note. This note will mature six months after closing, and will be secured against a number of common PSF shares, held by Village Farms. It will bear interest at a rate of 12 per cent per year.
After the transaction is complete, Pure Sunfarms will become a wholly owned subsidiary of Village Farms.
Emerald Health’s CEO, Riaz Bandali, commented on the joint venture which it will shortly lose all interest in.
“Emerald made a strategic decision three years ago to partner with Village Farms to create one of the most competitive large-scale cannabis growing operations in Canada, and we are very proud of our foundational role in designing and building this business to its current leading stature in the industry,” he said.
Village Farms (VFF) last traded on September 4, for $6.84 per share.
Emerald Health Therapeutics (EMH) also last traded on September 4, for $0.20 per share.
