VANCOUVER, BC, Aug. 16, 2021 /CNW/ – Village Farms Global, Inc. (“Village Farms” or the “Company”) (NASDAQ: VFF) (TSX: VFF) today declared that it has obtained 100% desire of privately-held, Colorado-based CBD-platform Well balanced Well being Botanicals (“Balanced Health and fitness”) in a transaction valued at US$75 million, helpful currently (“Closing Date”). Balanced Wellness owns and operates just one of the major brands in the hemp-derived cannabidiol (CBD) industry in the United States, providing Village Farms with quick entry into the U.S. CBD market place in a buyer goods category adjacent to the higher-THC hashish current market, as well as the broader consumer packaged goods (CPG) wellness arena. Balanced Wellness is a profitable business enterprise and the acquisition is predicted to be immediately accretive to net income.
Well balanced Wellness develops and sells superior-top quality, CBD-primarily based health and fitness and wellness merchandise. With an overriding target on excellent and compliance, Well balanced Health has established a assorted portfolio of CBD and other cannabinoid merchandise, together with ingestible, edible and topical purposes that are distributed by using e-commerce and brick and mortar retail channels. Its e-commerce platform, CBDistillery™ is a best-five US CBD brand1 and leading-ranked world-wide-web web site inside the CBD category, with additional than 30,000 orders regular and a sizeable repeat buyer base. Through its very long-expression partnerships, Balanced Wellbeing has manage of the entire source chain from seed-to-shelf, seamless sourcing, manufacturing, and sale of large-quality conclusion products and solutions across a wide variety of sorts and makes use of.
Highlights of the Acquisition
- Offers fast accessibility to the U.S. retail CBD market, estimated to improve to US$16 billion by 20252 (from US$4.7 billion in 20202) via a very well-established, rewarding small business, with top brand consciousness, an established e-commerce system (CBDistillery™), proven retail channels and a developing purchaser base
- Provides an knowledgeable workforce and solution groups in the U.S. adjacent to Village Farms’ client items portfolio with enlargement prospective throughout all cannabinoid solutions as permissible below at the moment evolving laws, together with an supplemental likely pathway to the U.S. high-THC cannabis market
- Straight away accretive to web revenue with a buy cost of US$75 million satisfied by way of US$30 million in money and prevalent shares of the Company equivalent to US$45 million to the sellers of Balanced Well being
- Predicted to contribute annualized income of much more than US$30 million at an annualized altered EBITDA margin of in surplus of 15% in 2022 and,
- Possibility for Village Farms (and its wholly owned subsidiary, Pure Sunfarms, Canada’s premiere provider and manufacturer) to include significant knowledge through Balanced Health’s offer chain, like the likely to leverage Village Farms’ extended-standing relationships as a produce provider to its grocery and big-structure vendors in the U.S., as nicely as as a result of further expense in Balanced Health’s brand name and enlargement of its foremost e-commerce system.
Village Farms Management Commentary
“Given that US federal legalization in late 2018, hemp-derived CBD items, as nicely as other cannabidiol-centered solutions, have been section of our in depth method focused on significant-value, significant-development plant-primarily based customer packaged products alternatives in hashish,” reported Michael DeGiglio, CEO, Village Farms International. “As a nicely-recognized, worthwhile chief in the U.S. retail CBD market, Balanced Well being is the appropriate possibility, at the appropriate time, to consider our following key step forward in anticipation of regulatory clarity that will propel the expansion of this nascent sector. Balanced Well being supplies a prudent usually means by which to make investments in our hashish system, offering quick accretion to profitability, significant upside prospective inside of the current Well balanced Wellbeing company and many supplemental strategic possibilities to push significant extra shareholder value in excess of the medium and very long phrase.”
“Importantly, the addition of the Well balanced Health and fitness platform gives us with one more prospective pathway to participate in the U.S. high-THC cannabis current market, when permitted to do so, that could help us to extra rapidly accessibility the industry, in progress of our programs to transform our a lot more than 5.5 million square ft of high-tech greenhouse amenities in West Texas – just one of the most favourable environments for hashish cultivation in the continental U.S. – for massive-scale, minimal-expense output of hashish.”
Mr. DeGiglio concluded, “We are thrilled to welcome the remarkable management and operational groups at Balanced Health and fitness to the Village Farms family. They insert complementary abilities and cannabis know-how that will drastically bolster our skill to achieve our strategic goals. We appear forward to leveraging their unparalleled know-how and exclusive skill sets as we keep on to improve our Organization and pursue our very long-phrase eyesight to be a formidable, vertically built-in consumer packaged products firm concentrated on plant-based well being and wellness.”
Balanced Overall health Administration Commentary
“We are ecstatic to join forces with Village Farms, a chief in the worldwide hashish and CBD industries,” said Chase Terwilliger, CEO, Balanced Health Botanicals. “Due to the fact 2016, our nimble staff has worked tirelessly to generate not only a primary manufacturer of which we are extremely very pleased but also 1 that is really generating an effects in the lives of shoppers by supplying every day premium items. We have been in a position to realize and retain a major-five sector share1 in the CBD current market, although producing positive money movement. As component of the Village Farms organization, we will be able to get the future ways in our growth tactic, with the opportunity for prudent, return-concentrated investments, to more grow our industry share and drive efficiencies, with a emphasis on ongoing profitability.”
“Village Farms is a highly complementary match for Well balanced Well being, with a solid alignment of vision and values, giving the option for unparalleled collaboration, and a shared aim to be the chief in each and every market place in which we participate. We continue to be steadfast in our dedication to our retail companions and buyers, and are confident this acquisition will further more bolster our means to meet their desires.”
Acquisition Arrangement and Buy Rate
Below the terms of the Acquisition Arrangement, the consideration to the sellers of Balanced Health and fitness is composed of US$30 million paid in dollars, internet of all credit card debt of Well balanced Overall health and transaction fees, and 4,707,113 prevalent shares of the Company, which are equal to US$45 million as calculated based on the volume weighted regular buying and selling rate on Nasdaq for the 10 (10) investing times ending the day prior to the Closing Day. The typical shares issued pursuant to the Acquisition Agreement will be subject to lock-up agreements which let for quick buying and selling, issue to compliance with applicable securities rules, of 25% of shares received and the stability to be introduced for investing in 3 (3) equivalent installments of 25% each 4 (4) months. Balanced Well being will have no debt on completion of the transaction.
Within just 75 times of the Closing Day, the Corporation is essential to file with the U.S. Securities and Trade Fee, on Variety 8-K/A, historic fiscal statements for Well balanced Well being, together with unaudited pro forma blended fiscal statements of the Corporation as if the acquisition of Well balanced Overall health had transpired on January 1, 2021.
Vicente Sederberg LLP and Torys LLP acted as legal counsel to Village Farms and Orient Issue Companions LLC acted as economical advisor to Village Farms for this transaction.
1. Brightfield Group: 2021 Mid-Calendar year US CBD Report.
2. Brightfield Team.