This highly accretive acquisition will strengthen Hollister's brand portfolio and broaden its distribution across multiple states
VANCOUVER , March 6, 2020 /CNW/ - Hollister Biosciences Inc. (CSE: HOLL, FRANKFURT : HOB, OTC: HSTRF) (the "Company" or " Hollister ") – a diversified cannabis branding company with products in 220 dispensaries throughout California , is pleased to announce the Company has entered into a definitive agreement (the "Agreement") on March 6 th, 2020 to acquire Venom Extracts ( "Venom"), one of Arizona's premier extract brands and one of the state's largest producers of award-winning medical cannabis distillate and related products.
On February 25, 2020 , the Company first announced a Letter of Intent to acquire Venom, including the following financial figures and terms.
HIGHLY ACCRETIVE $20,000,000 ACQUISITION
For the year ended December 31, 2019 , Venom Extracts reports having generated CDN$ 16.4 million in revenue and CDN$ 2.48 million in EBIDTA from its product line of Cannabis Concentrates, P.H.O Concentrates and Cartridges. 2019 Revenue and EBITDA for Venom Extracts are as reported by Management. Though Hollister believes the figures to be highly reliable, their audit will be part of the ongoing due diligence before closing.
The all stock purchase price is anticipated to be CDN$ 20,000,000 , with 70% to be paid upfront and 30% to be paid upon milestone achievements related to revenue targets for Venom. The acquisition is expected to close by March 31, 2020 subject to normal course due diligence.
KEY TERMS OF THE AGREEMENT:
- The Company will acquire Venom Extracts for CDN$20,000,000 with such payment to be issued in Hollister common stock (the "Payment Shares")
- The stock price will be determined based on the greater of:
- Once the share price is established, 70% of the Payment Shares will be issued upon closing of the transaction, subject to hold periods
- The remaining 30% of the Payment Shares will be issued when and if the following milestones have been met on or prior to December 31 st, 2021:
"We are very pleased to have entered into a definitive agreement to complete this transformational acquisition", shared Carl Saling , Founder and CEO of Hollister Biosciences, Inc. "Financially, we are bolting on substantial revenue and EBITDA, while strategically, this allows for the opportunity to bring Venom into the California marketplace and help scale Hollister's existing operation. Likewise, it allows for the opportunity to introduce Hollister's products into the Arizona and Nevada marketplaces to start with."
"This is an exciting acquisition and we are happy to be taking this critical step toward closing", shared Jacob Cohen , Founder of Venom Extracts. "This transaction represents the next step in ensuring the future growth of both Hollister and Venom. We are looking forward to increasing the geographic scope of our operation by expanding into the California marketplace through Hollister's existing platform, as well as, exploring expansion of our existing product scope collectively."
In association with the acquisition, Hollister will not be assuming any long-term debt, a new control position will be created and there is no change in Management, or the Board of Directors of Hollister being contemplated at this time.
Finder's fees will be payable in accordance with the policies of the Canadian Securities Exchange.
This press release is available on the Company's CEO Verified Discussion Forum, a moderated social media platform that enables civilized discussion and Q&A between Management and Shareholders.
About Hollister Biosciences Inc.
Hollister Biosciences Inc. is a diversified cannabis company with multiple, high-quality products now carried in 220 of Indus Holdings (CSE: INDS), Hollister's exclusive distribution partner's 600 dispensaries. This level of penetration is expected to grow as the Company accelerates its seed to shelf, high margin business and product development model.
Capitalizing on this success, Hollister's vision is to become the sought-after premium brand portfolio of innovative, high quality cannabis across multiple states and hemp products nationwide.
Our wholly owned California subsidiary, Hollister Cannabis Co, is the 1st state and locally licensed Cannabis Company in the City of Hollister, California , the birthplace of the "American Biker" from which we embrace the outlaw roots of Hollister to drive our Company fearlessly down the road of success.
Products from Hollister Cannabis Co. include HashBone, the brand's premier artisanal hash-infused pre-roll ranked as California's #1 hash infused pre-roll, along with solvent-free bubble hash, pre-packaged flower, pre-rolls, tinctures, vape products, and full-spectrum high CBD pet tinctures.
About Venom Extracts
Venom Extracts is one of Arizona's premier extract brands and one of the state's largest producers of award-winning medical cannabis distillate and related products. With an experienced management team and unparalleled reputation for quality, Venom Extracts prides itself as a differentiated extraction company by producing legal Marijuana products at a price point that allows retailers to generate higher profits. Focused on proprietary efficiencies, the Company is able to produce more product per square foot than its competition, maintaining lower costs and risks than a typical extraction company. The company's expansion strategy is centered on entering new markets/states that are approved for medical cannabis use and/or approved or have a reasonable expectation to be approved for recreational use in the near future.
Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information: This news release includes certain statements that may be deemed "forward-looking statements". The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "would", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this News Release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors discussed in the Company's disclosure documents which can be found under the Company's profile on www.sedar.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/hollister-biosciences-signs-definitive-agreement-to-acquire-venom-extracts-with-16-4-million-in-revenue-and-2-48-million-ebitda-301019220.html
SOURCE Hollister Biosciences Inc.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/March2020/06/c7636.html