High Tide Reaches U.K. CBD Market Via Acquisition of Blessed CBD For $12.32M

Cannabis company High Tide Inc. HITI (NASDAQ: HITI) 2LYA reported Thursday it has signed a definitive agreement to acquire 80% of Enigmaa Ltd., operating as Blessed CBD, for £9.06 million ($12.32 million). Under the deal, High Tide obtains a three-year option to acquire the remaining 20% of Blessed at any time.

Scotland-headquartered Blessed was founded in 2019, and quickly became one of the favorite CBD brands in the U.K. In 2020 Blessed had almost 5 million site visits and an average order value of approximately £75.

The Deal Details

The transaction, which is expected to close during October 2021, implies an enterprise valuation of £11.3 Million, representing 4.0x EBITDA generated during the 12 months ended August 2021.

The consideration for the 80% acquired will be comprised of: (i) £4.9 Million in common shares of High Tide; and (ii) £4.2 Million in cash.

Blessed’s founder and CEO, Vithurs Thiru will join the High Tide team as Senior Manager of Search (SEO) of the company.

KPMG LLP conducted financial due diligence on behalf of High Tide for the Transaction. Garfinkle Biderman LLP and Ince Gordon Dadds LLP are acting as legal advisors for High Tide in connection with the transaction and Carlsquare and Addleshaw Goddard LLP acted for Blessed in connection with the transaction.

Strategic Highlights

The addition, Blessed will turn High Tide into a big player in the U.K. CBD market;
Blessed’s direct-to-consumer platform advances High Tide’s existing e-commerce portfolio; Since its founding two years ago Blessed has fulfilled over 120,000 orders to approximately 87,000 customers.
High Tide might soon obtain novel food authorization, as Blessed has submitted their novel food applications to the U.K. government's Food Standards Agency;
Notable global potential.

“This acquisition marks our entry into the highly lucrative and rapidly-growing U.K. CBD space which we expect to serve as a launching pad for High Tide to further penetrate the E.U. market for hemp-derived CBD products, while also taking advantage of cross-selling opportunities related to our in-house product lines,” Raj Grover, president and CEO of High Tide stated. “I have been very impressed with the amazing business that V has been able to build within just two years, and look forward to welcoming him and the rest of the Blessed team into our company."

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