InterCure To Acquire Israel-Based Medical Cannabis Producer Better For $35M

InterCure Ltd. INCR INCR INCR, which is doing business as Canndoc, has signed a definitive agreement to acquire Cann Pharmaceutical Ltd., also known as Better.

Under the terms of the agreement, InterCure will acquire 100% of Better’s shares, which includes “Better’s” unique strains, cultivation site, intellectual property, and commercial operations in Israel as well it’s international activities.

Purchase price of $35 million will be paid with InterCure shares at the valuation of $10 per share, which is the same share valuation that was used in connection with the SPAC and PIPE transaction in April 2021. The shares issued will be subject to a three-year lock-up plan.

Why It Matters?

InterCure’s acquisition of Better is expected to strengthen its position as the largest, fastest growing, and profitable cannabis company outside North America.

The deal would also expand InterCure’s global reach and accelerate international expansion strategy to major markets worldwide.

In addition, Better’s unique and high demanded products is expected to complement InterCure’s large portfolio of pharmaceutical grade, high quality branded products with a leading market share position.

Moreover, Better has consistent track record of delivering significant gross profit and positive EBITDA, and together with anticipated synergies, the acquisition is expected to be accretive immediately.

Better is a pharmaceutical grade medical cannabis company, with leading expertise in cannabis cultivation, marketing, commercialization, and research of medical cannabis products for a variety of medical indications.

The acquisition is expected to create an immediate value creation opportunity with revenue synergies estimated at ILS 50 million ($15.4 million) for the upcoming year.

"InterCure and Better's combined business operations are expected to create a new force in the international cannabis industry that will further accelerate our global expansion plans and opportunities and the consolidation process,”Alex Rabinovitch, InterCure CEO, said.

What’s Next?

The acquisition is expected to close in beginning of the third quarter of 2022, subject to customary closing conditions as well as specific approvals of the Israel Medical Cannabis Agency (IMCA), the Toronto Stock Exchange (TSX), as well as the approval of the court in Israel.

“Once we complete this acquisition, InterCure's portfolio will include additional leading brands, distribution network, and unique partnerships, positioning us to deliver sustainable value for all stakeholders," Rabinovitch added.

Photo: Courtesy of Ryoji Iwata on Unsplash