- AgraFlora (AGRA) and other co-owners have agreed to sell an edibles business for C$35 million to OrganiGram (OGI)
- The shareholders agreed to sell The Edibles & Infusions Corporation for $22 million plus up to $13 million upon achieving certain earn-out milestones
- The shareholders received the $22 million payment through the issuance of 5,045,872 OGI common shares priced at $4.36 per share
- OrganiGram is a licensed producer of cannabis and cannabis-derived products in Canada
- AgraFlora Organics International grows and distributes cannabis in Europe and Canada
- OrganiGram (OGI) is up 0.46 per cent and is currently trading at $4.38 per share
- AgraFlora (AGRA) is trading flat at $0.04 per share
AgraFlora (AGRA) and other co-owners have agreed to sell an edibles business for C$35 million to OrganiGram (OGI).
The shareholders agreed to sell The Edibles & Infusions Corporation, of which AgraFlora owns 43 per cent, to OrganiGram Holdings for $22 million in OGI shares plus up to $13 million in additional OGI shares upon achieving certain earn-out milestones.
The shareholders received the $22 million payment through the issuance of 5,045,872 OGI common shares priced at $4.36 per share.
Earn-out milestones are as follows:
- The shareholders will receive $3.5 million on first listing of OrganiGram or Edibles & Infusion product prior to December 31, 2021 in either the Ontario or Alberta recreational market
- They will receive $7 million on the successful completion of $15 million in net revenue during the 12 months ended December 31, 2022
- They will receive $2.5 million on the generation of $7 million in adjusted EBITDA for the 12 months ended December 31, 2022
Milestone payments shall be priced at OGI’s closing price on the Toronto Stock Exchange on the day prior to settlement.
Elise Coppens, Director and CEO of AgraFlora, commented,
“AgraFlora and OrganiGram have enjoyed working towards the closing of the EIC transaction. The EIC facility was designed to handle both smaller-batch artisanal manufacturing and, more importantly, large-scale nutraceutical-grade and high-efficiency production with a view to gaining EU GMP certification.
OrganiGram found the facility’s design and flexibility attractive, while AgraFlora is now better positioned with its net share of the transaction proceeds to explore new opportunities, potentially in the United States. As such, we view this transaction as truly mutually beneficial.”
OrganiGram is a licensed producer of cannabis and cannabis-derived products in Canada.
AgraFlora Organics International is focused primarily on the Canadian cannabis industry. It owns Propagation Services Canada, a large-scale commercial greenhouse in Delta, British Columbia, and Farmako GmbH, a European distributor of medical cannabis.
OrganiGram (OGI) is up 0.46 per cent and is currently trading at $4.38 per share as of 9:31 am ET.
AgraFlora (AGRA) is trading flat at $0.04 per share as of 9:30 am ET.