A Kelowna-based cannabis manufacturer is being eyed for acquisition by the owner of a chain of pot shops.
Under the deal, SNDL Inc will acquire all of the issued and outstanding common shares of The Valens Company Inc. and combine the businesses in an all-stock transaction valued at $138 million.
Valens shareholders will receive 0.3334 of a common share of SNDL for every Valens share they own.
SNDL says the offer implies a value of $1.26 per Valens share, representing a 10 percent premium on Valens’ trailing 30-day volume-weighted average price.
The companies believe their merger will deliver more than $10 million in annual savings and increase SNDL’s overall cannabis market share to 4.5 per cent.
SNDL, which is behind the Value Buds and Spiritleaf brands, says the transaction is expected to close in January.
Valens’ stock has tumbled significantly in the past year. Shares traded at $12 apiece in May 2021 but were down to $3 last December.
“We are thrilled to bring together the two best-in-class cannabis companies that have extremely complementary assets to create a true market leader,” Tyler Robson, Valen’s chief executive officer, said in a Monday release.
“With SNDL’s balance sheet and largest cannabis retail network in Canada, we look exceptionally forward to taking Valens’ brands to new heights and unlocking 2.0 products for the SNDL platform,” Robson said.
Valens’s shareholder will vote on the offer by the end of November, the release states.
– with files from The Canadian Press
