Curaleaf Wields M&A To Tap European Market, Agrees To Buy EMMAC For $286M

Cannabis company Curaleaf Holdings Inc. CURLF is looking to expand to Europe via M&A.

The Wakefield, Massachusetts-based company announced Tuesday that it will acquire one of Europe’s largest cannabis companies, EMMAC Life Sciences, for approximately $286 million in cash and stock.

The transaction, which is expected to close during the second quarter of 2021, will mark Curaleaf’s entry into Europe — making it one of the first U.S. multi-state operators to do so.

Deal Details: Under the terms of the agreement, Curaleaf will pay £0.50 ($0.69) per share of EMMAC. Out of the total, £35 million ($50 million) will be paid in cash.

The remainder of the payment will be completed in Curaleaf subordinate voting shares, of which EMMAC shareholders will receive almost 16.8 million — representing roughly 3% of Curaleaf’s float.

The share amount was calculated using Curaleaf’s Monday closing price on the CSE: $14.12. The contract also includes an additional consideration of $57 million, which is subject to performance.

Why It Matters: Curaleaf Executive Chairman Boris Jordan says the acquisition will transform Curaleaf into an "international cannabis consumer packaged goods company."

“The consumer and political liberalization trends around cannabis that are sweeping the U.S. are also increasingly taking hold in Europe,” he said. “The European cannabis market has the potential to exceed the U.S. cannabis market over the long-term and will help fuel our growth for years to come."

Curaleaf CEO Joseph Bayern has estimated that the European market could prove to be worth $120 billion over the long term.

Eight Capital advised Curaleaf on the deal, while Stikeman Elliott LLP and Memery Crystal handled legal matters.

Canaccord Genuity Group advised EMMAC throughout the sale process, while Norton Rose Fulbright acted as legal advisor.  

Check out the recent interview Benzinga's Jason Raznick conducted with Boris Jordan.

Lead image by Ilona Szentivanyi. Copyright: Benzinga.