The Hydroponics Company Ltd’s (ASX:THC) proposed acquisition would result in a broader product offering for the group's Canadian cannabis business.
While confidential terms prevent the naming of the company at this stage, should the acquisition go ahead it would strengthen the group’s overseas operations.
The acquisition target is complementary to the existing Crystal Mountain-Dragon Vision business which has only recently added new agencies to its portfolio.
The stars align for both Australia and Canada
Successful conclusion of the acquisition would provide exposure to the rapidly growing licensed producers in the eastern states of Canada.
This comes at a time when industry conditions for the group’s Australia business are in good shape following regulatory changes.
READ: The Hydroponics Company gets a lift following medicinal cannabis export approval
Details confidential pending due diligence
Hydroponics Company hasn’t released details of the entity, and it is currently progressing with due diligence.
However, the company anticipates that it would generate annual revenues of more than C$20 million, making it a material development for the group.
David Radford, chief executive officer, said: “Upon completion of this acquisition, The Hydroponics Company will offer an extensive range of products for the Canadian cannabis market.
“This growth of the Canadian company was identified in October as being a strategic imperative and I am pleased with the progress being made in executing this strategy.”
Acquisition to be completed in April
Should the acquisition proceed, the company expects that it will be completed in late April 2018.
The group continues to look for further opportunities, both acquisitive and organic that will drive the Canadian business.