MERGERS & ACQUISITIONS
Transactional Activity: Week 28 continued to be quite active in M&A. We recorded 3 M&A transactions, vs. 6 in the prior-year period.
Largest M&A Transaction: The week’s largest disclosed M&A deal was the Core One Labs (CSE: COOL) (OTCQB: CLABF) acquisition of all outstanding shares of Rejuva Alternative Medicine Research Centre (“Rejuva”) and one-quarter of the non-voting shares of Shahcor Health Services (“Shah”). Total consideration for both transactions was approximately US$17.1 million. The acquired properties operate walk-in medical clinics in Vancouver and West Vancouver, British Columbia. Core intends to further develop its product offerings through research and development in these clinics, including the integration of intellectual property related to psychedelic treatments and other novel drug therapies. Core’s CannaStrip infused strips allow for more efficient absorption of active ingredients and microdosing. No financial information about the acquired companies was publicly released.
Public vs. Private: All 3 acquisitions were made by public companies as has been the case in 93% of M&A transactions announced in 2020. Public companies, particularly with the recovery in stock prices and fund-raising ability, have been the dominant acquirers in the cannabis industry. Of the acquired companies, all 3 were private. Private companies remain the dominant targets for acquirers.
M&A by Sector: Buyers came from 2 different sectors, 2 from Cultivation & Retail, and 1 from Infused Products and Extracts. M&A activity continues to broaden from its historical basis of MSOs purchasing into new markets through the purchase of other Cultivation & Retail sector companies.
Click on Image to Enlarge