Flora Growth Corp (NASDAQ: FLGC) has signed a definitive agreement to acquire Franchise Global Health Inc (FGH), a multi-national operator in the medical cannabis and pharmaceutical industry. The transaction values Franchise Global Health at about CA$40.0 million.
The combination of Flora and FGH is expected to deliver at least $3.0 million of annualized cost synergies within the first year following the completion of the acquisition.
The acquisition would further allow Flora to expand its CBD business in Europe by utilizing FGH's distribution and logistics capabilities.
FGH's German businesses operate primarily in the export pharmaceutical and medical cannabis import and distribution markets, servicing 1,200 pharmacies in Germany.
Flora will issue between 36 million and 43 million of its common shares in exchange for the issued and outstanding shares of FGH.
The company held $10.3 million in cash and equivalents as of June 30, 2022.
"We plan to work hard to gain market share in the growing German cannabis market as global policy turns the corner," said CEO Clifford Starke.
Price Action: FLGC shares are trading lower by 1.69% at $0.53 on the last check Monday.
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