Hollister Biosciences Buys Venom Extracts In 'Highly Accretive' Deal

Cannabis company Hollister Biosciences Inc. HOLL HSTRF said Monday it has closed on the previously announced purchase of an Arizona-based cannabis extract brand, Venom Extracts.

Last year, Venom Brands disclosed revenue of CA$16.4 million ($11.58 million), reaching positive EBITDA of over CA$2.4 million from its line of cannabis concentrates and cartridges, according to the press release. The company is projecting record first-quarter revenue. 

The all-stock purchase price of CA$20 million has a transaction multiple of 1.2x 2019 revenue, according to Hollister. 

Seventy perfect of the price will be paid upfront, while the remaining 30% will be released once set milestones are reached or by Dec. 31, 2021. Consideration of CA$20 million is to be paid via the issuance of 70.39 million Hollister common shares to Venom Extracts shareholders, and another 29.61 million shares are set to be paid to certain ex shareholders of Venom Extracts.

"We are extremely pleased to complete this transformational and highly accretive acquisition," Carl Saling, founder and CEO of Hollister Biosciences, said in a statement. 

"Our acquisition of Venom Extracts bolts on substantial revenue and EBITDA to Hollister, while providing Venom Extracts the ability to expand its offering of premium branded product into the California marketplace. Likewise, our acquisition also allows Hollister to introduce its products into the Arizona and Nevada marketplaces through Venom Extracts' existing distribution channels."