Valens Cannabis Company Raises $46M Via Bought Deal Offering Of Units

The Valens Company Inc. VLNS VLNCF has secured some $46 million in financing through a bought deal public offering of its units.

The British Columbia-based cannabis company said Tuesday it had sold some 13,940,300 of its units at $3.3 per unit, including 1,818,300 units sold pursuant to the exercise of the underwriters’ over-allotment option.

Each Unit is comprised of one common share and one-half of a common share purchase warrant of the Company, with each warrant allowing the purchase of one common share in three years following the offering’s closing at $4.15 per warrant share.

Valens intends to use a chunk of the money it raised - $28 million - to fund future acquisitions, although none of the proceeds will be used for its recently announced deal to purchase Green Roads and its majority-owned manufacturing subsidiary for $40 million in cash and stock, as well as business expansion in both North America and internationally.

The also company plans to spend $5 million on capital expenditures.

The remaining $13 million will be used for working capital requirements and other general operating expenses.

Stifel Nicolaus Canada Inc. was a lead underwriter and sole book-runner for the offering, alongside a syndicate of underwriters including ATB Capital Markets Inc., A.G.P./Alliance Global Partners, Canaccord Genuity Corp., Desjardins Securities Inc., Haywood Securities Inc., M Partners Inc., and Research Capital Corporation.

Stikeman Elliot LLP served as legal advisor to Valens for the offering, while Borden Ladner Gervais LLP acted as legal counsel to the underwriters.

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