The Valens Company (TSX:VLNS, OTCQX:VLNCF) Inc said it has agreed to acquire Citizen Stash Cannabis Corp, a Canadian premium craft cannabis company, in an all-stock transaction valued at about C$54.3 million on an enterprise value basis.
Valens expects the acquisition to be accretive in 2021 and 2022 before synergies, with a revenue multiple of about 4.3 times first-half fiscal 2021 annualized revenue, while providing the company with a strategic, asset-light expansion into the Canadian cannabis flower and pre-rolls market.
“We are excited to join forces with Citizen Stash's experienced team and broaden our offerings in the flower and pre-roll verticals with a best-in-class brand,” Valens CEO Tyler Robson said in a statement.
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“In short, this strategic acquisition will allow Valens to significantly expand its presence in the recreational market and capture a share of the largest categories of the Canadian cannabis space without the burden of a high-cost growing infrastructure,” Robson added.
Citizen Stash Cannabis shareholders are expected to receive 0.1620 of a Valens common share for each Citizen Stash common share held.
Valens said Citizen Stash was the highest ranked premium brand by market share in the flower category with an average selling price greater than $13 per gram in Ontario, Alberta, and British Columbia during March to May 2021, according to Hifyre data.
Citizen Stash will be the third acquisition for Valens in 2021, which the company expects will accelerate its strategic initiative to create a leading global manufacturing platform and expand on its existing domestic and international distribution network.
The Valens Company (TSX:VLNS, OTCQX:VLNCF) is a profitable British Columbia-based producer of cannabis products, medical and recreational, and it is scaling up operations. The company can process over 425,000 kilograms of biomass per year and its services include numerous types of proprietary extraction, analytical testing, formulation, cultivation, and research, as well as white label product development.
Valens’ products include tinctures, two-piece caps, soft gels, oral sprays, and vape pens as well as beverages, edibles, injectables, and natural health products and it has a strong pipeline of next-generation products in development.
Contact Sean at sean@proactiveinvestors.com