Second Psychedelics Merger Of The Week? Silo Wellness To Buy Jamaica-Based Business For $31.9M

Silo Wellness SILFF has confirmed its intention to acquire all issued and outstanding securities of NUGL Inc./Kaya Group NUGL in an arms-length transaction valued at $31.9 (CA$43.3) million.

The news comes shortly after Cybin's CYBN proposed acquisition of Small Pharma DMTTF, and was somewhat anticipated by Silo NUGL's recent business partnership.

The number reflects the combined market cap of both companies, NUGL shares valued at $0.0344 and Silo’s at $0.0147 currently (they have both entered into a trading halt as of today.)

Silo, founded in 2018 in Oregon by trial lawyer and entrepreneur Mike Arnold, offers psilocybin wellness retreats currently in Jamaica and soon in the U.S. state. The company was recently featured in Anderson Cooper's CNN documentary where correspondent David Culver experiences on-camera psilocybin therapy, 

Jamaica-based Kaya Group owns three Herb House retail locations, a wellness center and the country’s reportedly first legal medical marijuana dispensary where apart from cultivating and processing numerous cannabis genetics, it develops and distributes psilocybin mushrooms within the country’s legal industry.

Meanwhile, NUGL platform offers cannabis companies targeted networking and advertising opportunities to expand their reach by connecting with consumers.

The Acquisition

Silo would acquire 100% of NUGL’s issued and outstanding shares in exchange for 2.01 million treasury shares for a purchase price of $29.6 million.

NUGL stock options, warrants and other convertible securities would be equivalently adjusted to receive Silo common shares. Meanwhile, the latter would issue common shares within a private placement financing toward gross proceeds between $183,975 and $1.47 million at 2 cents per share to validate the purchase price and cover transaction costs plus provide additional capital for strategic growth post-merger.

Finder's fee of 3% of the transaction shall be paid to NUGL board member Benjamin Kaplan and 3% to Silo CEO Mike Arnold for a total of 64,934,437 shares issued each.

Heard of Benzinga’s Cannabis Capital Conference? Whether to close your deals or just get acquainted with the sector’s best, join us this Sept. 27-28 in Chicago for our 17th edition and see for yourself why they say we lead the cannabis events space. Tickets HERE!

Photo: Benzinga edit with photo by Zita and canadastock on Shutterstock.