Delic Closes $10M Merger With Chain Of Ketamine Clinics

Psychedelic wellness company Delic Holdings Corp. DELC DELCF announced Tuesday that it has wrapped up its previously announced acquisition of Ketamine Wellness Centers Arizona LLC.

Deal Details

The transaction creates the largest chain of wellness centers providing ketamine treatments in the U.S, with a consolidated revenue run rate of $11 million, the Vancouver, British Columbia-based company reported.

Under the terms of the agreement, Delic acquired all of the membership interests of KWC through a reverse triangular merger between KWC and its wholly-owned subsidiary for $10 million in stock and cash.

The purchase price includes the issuance of multiple voting shares in the capital of Delic to the members of KWC having an aggregate value of $5 million, less a holdback equal to $1 million at $0.1658 per share as well as $5 million in cash.

The cash portion of the consideration to be paid by Delic includes $3.29 million paid on the closing date, $296,541 to be paid on forgiveness of a loan to KWC from The Health Resources and Services Administration, $750,000 to be paid on the date that is 12 months following the closing date and the final $750,000 to be paid on the date that is 24 months following the closing date.

Moreover, KWC's members are entitled to receive additional consideration shares upon each new clinic opened by KWC that posts three consecutive months of profitability and minimum revenue of $135,000 during those three months, such additional consideration shares to have an aggregate value of $100,000 per clinic opening.

KWC will operate under the Delic umbrella and the direction and guidance of Kevin Nicholson, CEO of KWC and the new chief operating officer for Delic Corp.

What It Means For Delic

KWC adds to Delic's existing portfolio of two clinics operated by Ketamine Infusion Centers LLC in California and Arizona, as well as a team of over 60 medical professionals and ‎employees bringing a wealth of industry ‎experience and knowledge.

In addition, KWC has been operating profitably and expanding significantly with 2020 revenues of over 3.5 million, on track for $4.5 million in 2021, bringing Delic's pro forma annualized revenue to more than $8 million.

Ketamine Wellness Centers has locations in Arizona, Colorado, Florida, Illinois, Minnesota, Nevada, Texas and Washington State. The company has overseen an aggregate of 60,000 treatments to date.

What's Next?

Delic expects to open 15 additional clinics across the country over the coming 18 months, further expanding access to millions who can benefit from new medicines and treatments for a variety of mental health conditions and adding to the company's position as a central hub of education, media and cultural conversations around these new medicines and treatments.

"With the addition of KWC, we can now reach millions of people suffering from various mental health conditions who have lost hope of finding effective, affordable treatments," Matt Stang, co-founder and CEO of Delic said. "As more treatments, such as MDMA and psilocybin, become FDA-authorized for medical use, we have the potential to help millions more people through the clinics."

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