The Valens Company Inc. (TSX:VLNS) said it has entered into an agreement with a syndicate of underwriters led by ATB Capital Markets Inc. for a bought-deal offering to raise gross proceeds of C$35,014,000.
The company, a leading manufacturer of cannabis derivative products said the underwriters will purchase from the company and sell to the public 17,080,000 units at a price of C$2.05 each.
In addition, Valens has granted the underwriters an option, exercisable at the offering price for a period of 30 days following closing, to purchase up to an additional 2,562,000 units to cover over-allotments, if any, and for market stabilization purposes.
READ: Valens to acquire edibles manufacturer LYF Food Technologies in a C$24.9M cash-and-stock deal
Each unit is comprised of one Valens common share and one-half of a common share purchase warrant of the company. Each warrant will be exercisable to acquire one common share for a period of three years following the closing date at an exercise price of C$2.55 per warrant share, subject to adjustment in certain events.
The company said it plans to use net proceeds of the offering for a portion of the cash component of the recently announced acquisition of LYF Food Technologies Inc., to pursue other strategic M&A and business expansion opportunities in Canada and international markets, working capital requirements and other general corporate purposes.
The offering is subject to certain conditions, including the receipt of all necessary regulatory approvals, including approval from Toronto Stock Exchange, and is expected to close on or about January 29, 2021.
Contact the author at jon.hopkins@proactiveinvestors.com