Levitee Labs (CSE:LVT) Inc announced it has signed a letter of intent (LOI) to acquire 100% of the issued and outstanding shares in a company owning and operating a chain of specialty addiction pharmacies located throughout the lower mainland of British Columbia.
The Vancouver-based company said the chain of pharmacies presently operates in three locations throughout the lower mainland, which will be brought under the Levitee Pharmacies umbrella once the acquisition closes.
“This acquisition is our first move into our home province of British Columbia, a province where the opioid epidemic and addiction has been a major visible problem for decades,” said Ken Osborne, head of mergers and acquisitions at Levitee Labs (CSE:LVT).
“Our team is excited to make a positive impact by combating this problem so close to home.”
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Levitee said it will pay $4 million for the acquisition based upon approximately 4.7x trailing six months annualized underlying earnings (EBITDA). Half will be paid in cash using current cash reserves and $1.2 million will be paid in Levitee Labs (CSE:LVT) stock at the closing of the transaction. The shares have selling restrictions with 25% being released at four, six, eight and 10 months following closing.
The remaining $800,000 will be paid 12 months after the closing and is structured to incentivize a smooth transition in ownership, it added.
The company noted that the LOI is non-binding and remains subject to the drafting of definitive agreements, approval from its board of directors, and regulatory body approvals, and confirmatory due diligence.
"We have grown tremendously since closing multiple acquisitions in July that positioned us with a formidable footprint of clinics and pharmacies in Alberta,” Levitee CEO Pouya Farmand said.
“This is our second-largest acquisition to date and provides us a solid foundation to build upon in British Columbia, as we establish the Levitee Labs name as a dominant player in treating patients suffering from addiction and substance use disorder throughout Western Canada.
“Our M&A team remains active in identifying other opportunities as we continue building momentum and value into the new year.”
Levitee is establishing itself as a leader in the integrative wellness space through leveraging an M&A regimen. The company is aiming to transform mental health and addiction treatments through the integration of psychedelic medicines and therapies.
Contact the author at stephen.gunnion@proactiveinvestors.com