Canadian cannabis producer PharmaCielo is in the process of acquiring Australia-based nutraceuticals maker Creso Pharma, the companies have announced.
PharmaCielo, which is listed on Canada’s TSX Venture Exchange with a market capitalization of $675 million, has operations in Canada, South America, Mexico and Italy. Assets include PharmaCielo Colombia Holdings, the largest cannabis producer in Colombia; the company was recently granted approval for commercial export of CBD isolate from the Colombian Government.
The deal is the first takeover of a listed medical cannabis company in Australia, reports have noted.
Deal valued at $82 million
The transaction is being worked out through a “scheme of arrangement” between Creso and its shareholders and a separate concurrent agreement among Creso and the holders of its listed options. A scheme of arrangement, also referred to as a “scheme of reconstruction,” is a court-approved agreement among a company and its shareholders or creditors. An Australian court will need to approve those agreements..
At the time of the deal announcement in early June, the stated value of the transaction was $82 million (AUD$122 million).
Upon approval of the takeover, Creso shareholders will hold around 13 percent of issued shares in PharmaCielo, whose shareholders retain the remaining 87 percent. Creso Pharma’s co-founder and CEO Miri Halperin Wernli would join the board of PharmaCielo as a director.
The deal will add to Creso’s active network currently spanning 13 countries
“The quality and scale of PharmaCielo’s cultivation and oil extraction operations in Colombia complements our focus on meeting global demand . . . through increased access to the necessary quality and volume of oil production,” Wernli said.
Creso is expected to benefit from recent expansion of PharmaCielo oil processing capabilities at its Rionegro, Colombia facility where it has invested $3 million in high-performance, high-volume extraction technology. The company said improvements could boost output by 12-fold to 265 tons annually, and that it has 18 tons of dried flowers in storage.