The Valens Company Inc (TSE:VLNS) (OTCQX:VLNCF) (FRA:7LV) has had its price target raised to $4.50 from $3.50 and earned a repeated 'Buy' rating from analysts at Research Capital in a note published April 29.
The bump comes two days after Valens announced a definitive agreement to acquire CBD product producer Green Roads and its majority-owned manufacturing subsidiary in a $40 million cash and share transaction, plus a potential $20 million in milestone payments
“With the acquisition of Green Roads, Valens strengthens its capabilities to supply US domestic and global markets with an expanded product offering,” the Research Capital analysts wrote. “The acquisition gives Valens access to the largest cannabinoid market in the world, with immediate entry into the US CBD market which is currently estimated at nearly C$6 billion.”
READ: Valens applies for Nasdaq listing in the US
“The Green Roads acquisition is expected to be immediately accretive to the company in 2021,” they added. “Green Roads will also strengthen Valens’ leadership with the addition of an on-the-ground highly experienced US management team with proven track records in pharmaceuticals, consumer packaged goods, eCommerce and marketing.”
Additionally, the deal expands Valens’ product portfolio with a range of high-margin products, including oils, ingestibles, topicals, pet products, capsules and soft gels, the analysts noted. Valens will also realize an enhanced distribution network with established brand loyalty, and a strong retail presence and robust direct-to-consumer eCommerce platform averaging 9,000 orders per month.
On April 28, Valens also announced that it had submitted an application to list on the Nasdaq, and a decision from the exchange is expected by the end of June.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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