PHOENIX–(BUSINESS WIRE)–Harvest Health & Recreation, Inc., a vertically integrated and highly diversified cannabis company with a strong financial and growth profile, would become the largest multi-state operator (MSO) in the U.S. following closing of a definitive agreement signed on April 22, 2019 to acquire Verano Holdings, LLC. [the_ad id=”32940″]Verano is one of the largest privately held multi-state, vertically integrated licensed operators of cannabis facilities with an extensive portfolio of premium branded products.
Pursuant to the terms of the Business Combination Agreement, securityholders of Harvest and Verano will become securityholders in the combined company which will carry on the business of Harvest and Verano.
The Transaction will be carried out by way of a plan of arrangement under the Business Corporations Act (British Columbia) whereby, among other things: (i) Harvest shareholders will exchange their shares in Harvest for equivalent securities in the Resulting Issuer on a 1:1 basis, and (ii) Verano securityholders will be issued a combination of subordinate voting shares and multiple voting shares in the capital of the Resulting Issuer in connection with the indirect exchange of their securities in Verano.
The all-stock Transaction has an implied total acquisition cost of approximately USD $850 million, based on a Harvest share price of CND $8.79. In addition, the Transaction will include completion of various Verano pipeline acquisitions, with a combined value of approximately USD $36 million, additional pipeline acquisitions that are in negotiations and may include certain entities that are ancillary to Harvest’s business, payable in shares of the Resulting Issue.
“Expanding our national footprint is paramount at Harvest and allows us to continue on the path to profitable growth for shareholders,” said Jason Vedadi, Executive Chairman of Harvest. “This accretive transaction will improve our position by strategically expanding our operating base to realize the benefits of scale. From day one, both companies focused on consistent revenue and profit growth. We are excited to bring Verano’s premium brands, depth of management and sound operations into Harvest.”
Steve White, CEO of Harvest, added, “We have long viewed the acquisition of Verano as a strategically, financially and operationally compelling opportunity that brings immediate value to shareholders of both companies. The acquisition provides us with the combined skills and capacity to bring the promise of cannabis’ future value to the masses. The talent we’ve assembled with significant, relevant real-world experience provides Harvest a deep bench from which to scale responsibly. And to ensure we meet the expectations of a seamless, value-creating integration, we’ve engaged one of the leading global management consulting firms in the world to assist us.”