U.S. vertically-integrated multi-state cannabis operator Curaleaf Holdings, Inc. (OTC: CURLF) will acquire state-regulated cannabis business of Cura Partners, owners of the Select cannabis wholesale brand.
The acquisition will be conducted through an all-stock transaction valued at $948.8 million. Curaleaf will issue to Cura shareholders around 95.6 million subordinated voting shares. In this way after the acquisition, Cura shareholders will own around 16 percent of Curaleaf on a fully-diluted basis.
Cura shareholders will also be eligible to receive an earn-out of up to $200 million from the issuance of additional shares, subject to Curaleaf exceeding certain 2020 revenue targets.
Following the completion of the deal, Curaleaf will own Select's manufacturing, processing, distribution, marketing and retailing operations and all adult-use cannabis products and all intellectual property.
The deal is expected to close later this year and it subject to closing conditions, regulatory approvals and the approval of Cura's shareholders.
Why It's Important
Select is one of the most popular cannabis wholesale brands in the U.S., being available in more than 900 retailers across the country. It's one of the leading brands in California, Arizona, Oregon and Nevada. The acquisition will allow Curaleaf to significantly expand its footprint and realize cost synergies through operational efficiencies and greater economies of scale.
Moreover, Curaleaf will also strengthen its management team.
Cameron Forni, CEO of Cura and Founder of Select, will join Curaleaf as President of Select and will get a seat on the board of directors. Select's Chief Marketing Officer Jason White will become Curaleaf's Chief Marketing Officer.
Curaleaf's stock traded higher by 12 percent at $11.20 per share at time of publication.
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