Atlas To Acquire An Additional Pharmacy And Provides Update On Expanding Its Global Cannabis Footprint

Atlas Global Brands Inc. AGBIF ATL has entered into a definitive agreement, signed May 17, 2023, for the acquisition of 51% of the outstanding securities of an Israeli private limited liability company operating a medical cannabis pharmacy. The proposed transaction is one of two proposed acquisitions previously announced on March 7, 2023 upon the company entering into binding letters of intent for the acquisition of a 51% and 70% interest in two medical cannabis pharmacies in Israel.

The pharmacy was granted a license to sell medical cannabis in October 2022 and annualized sales have since grown to approximately NIS 6.0 million (approximately $1.6 million).

Terms of the Proposed Acquisitions

Under the proposed transaction, Atlas will acquire a 51% interest in the pharmacy for 1.1 million common shares of Atlas Global and NIS 650,000 payable at closing. The cash consideration may be increased by up to NIS 2 million upon the pharmacy’s revenue and profitability exceeding certain prescribed amounts for the financial years completed December 31, 2023 to 2025.

The proposed transaction includes a call option whereby Atlas Global can acquire, and the vendor has a put option to sell, the remaining 49% interest in the pharmacy at a price equal to the revenue of the twelve-month period ended September 30, 2026, multiplied by 0.7. The put option is subject to satisfaction of conditions of profitability and good corporate standing.

The consideration shares will be subject to a lock-up period of 36 months during which 15% shall be released every six months, commencing on the six-month anniversary of the closing.

The proposed transaction is expected to close in calendar Q4 2023.

Update on Previously Announced Acquisitions

In addition, as previously announced on February 7, 2023, the company entered into a definitive agreement to acquire one trading house and majority interests in two additional purpose-built cannabis pharmacies in Israel (“previously announced acquisition 1”) and as announced on March 7, 2023, entered into two binding letters of intent to acquire 51% and 70% of the outstanding securities of two additional cannabis pharmacies in Israel (the “previously announced transaction 2” and with previously announced transaction 1, together the “previously announced transactions”).

The company is awaiting regulatory approval for previously announced acquisition 1 and expects the previously announced transaction 1 will complete in calendar Q3 2023. The company and the other party to previously announced acquisition 2, continue to settle the terms of the definitive agreement for the acquisition of a 70% interest in the remaining pharmacy.

Photo: Benzinga edit with photos by jarmoluk and lindsayfox on Pixabay