Canadian cannabis retailer High Tide Inc. HITI HITI (FSE:2LYA) announced Monday it has wrapped up the previously announced acquisition of an 80% interest in Enigmaa Ltd., operating as Blessed CBD for £9.06 million ($12.32 million), in stock and cash.
Based in Calgary, the company also has a three-year option to acquire the remaining 20% of Blessed at any time.
The Deal Details
Consideration for the transaction includes 1.13 million of High Tide's shares worth £4.9 million and £4.2 million in cash.
In addition, the company said the purchase price is subject to a post-closing working capital adjustment provision.
Blessed's founder and CEO agreed to join the High Tide team as senior manager of search of the company and to help grow its CBD business globally.
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.
What Does It Mean For High Tide?
Being the company's fifth acquisition in the global e-commerce space in 2021, the deal brings High Tide's online portfolio to a total of eight e-commerce platforms across cannabis, hemp-derived CBD, and consumption accessories, servicing customers across the U.K., E.U., and North America, taking e-commerce revenue run-rate from approximately $10.6 million on October 31, 2020, to just under $60 million today.
Founded in 2019 with its headquarters in Scotland, Blessed is one of the most popular direct-to-consumer CBD brands in the U.K, with nearly 5 million site visits in 2020 and a strong financial profile that generated 81% gross margins and 54% EBITDA margins for the 12 months ended August 2021.
The deal is a highly accretive transaction for shareholders, as Blessed generated revenue of £5.1 million and £2.8 million in EBITDA for the 12 months ended August 2021.
What's Next?
Raj Grover, president and CEO of High Tide, explained that the deal will "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."
More recent news from High Tide:
- High Tide Confirms Inclusion In Fourth Cannabis ETF Since Its NASDAQ Debut
- High Tide's Canna Cabana Milestone: Opens 100th Cannabis Dispensary, Big Plans For 2022
- High Tide Q3 2021 Revenue Nearly Doubles, Reports Net Loss Ahead Of Debut In British Columbia
- High Tide's Private Label Cannabis Partnership With Heritage And Loosh Brands, Heritage To Enter Missouri
Price Action
High Tide's shares traded 2.33% at $ 5.94 per share at the time of writing Tuesday morning.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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