Laval, Quebec, Canada—Neptune Wellness Solutions Inc. announced in a press release that it has signed a definitive agreement to acquire substantially all of the assets of SugarLeaf Labs, LLC and Forest Remedies LLC, a registered commercial hemp company that provides extraction services and formulated products.
SugarLeaf, the release notes, is based in North Carolina, which gives Neptune a U.S.-based hemp extract supply chain and a 24,000 square foot, cutting edge cold ethanol processing facility.
Neptune will acquire SugarLeaf on a debt-free basis for initial consideration at closing of $18 million, paid as $12 million in cash and $6 million in common shares, the release says. Should the business achieve certain annual performance targets, an additional payment of $132 million would be paid over the next three years in cash and shares for a maximum aggregate purchase price of $150 million.
The transaction is expected to close on or before July 31, 2019, the press release says, upon completion of standard closing requirements.
Jim Hamilton, president and CEO of Neptune, said in the release: “With Neptune’s Canada-based operations ramping up production and the cannabis industry growing exponentially around the world due to an evolving legal global framework, now is the time to establish a state-of-the-art supply chain in the U.S. marketplace. SugarLeaf’s capacity, efficient production of high-quality extracts, and strong supplier relationships, combined with our existing competencies in customer relationships and science-based formulations, creates a strong value proposition to U.S. brands who want to offer differentiated products to consumers. We warmly welcome the SugarLeaf team to Neptune.”
Peter Galloway, CEO of SugarLeaf, echoed the sentiment: “We are thrilled to be joining forces with Neptune. The SugarLeaf team looks forward to combining our strengths with that of the Neptune team, thereby accelerating our combined growth and development.”