After failing to close its previously announced transaction to sell itself to Abba Medix (CSE:ABA), RedeCan Pharm, which is licensed by Health Canada under MMPR to sell cannabis grown from its 15K s.f. greenhouse and describes itself as a “family owned and operated business in the heart of the beautiful Niagara escarpment,” has struck a deal to sell itself to another publicly-traded company, Alta Vista Ventures (CSE:AVV). The deal was announced on 11/27 in a press release.
The Letter of Intent calls for a total payment of $9.5mm, including $7mm in cash and $2.5mm in shares values at $0.33 each. The closing of the purchase is staggered over time and expected to be completed by early 2017. There is a royalty of 10% of sales as well payable to to the current owners.
Alta Vista intends to invest in extraction equipment to manufacture CBD oils, to expand the production space and to work to increase the patient base while leaving current management in place. The press release suggests that RedeCan is currently profitable.
Alta Vista recently received an option to take over the Burlington, Ontario project formerly owned by Enertopia and Lexaria Energy, now known as Thor Pharma, a deal that was announced this summer. That transaction would require payment of $1mm and the issuance of 10mm shares.
RedeCan Pharm had previously agreed to sell itself, but Abba Medix was unable to close the deal, as it reported in October:
As previously announced by Abba in a press release dated August 18th, 2015, the Abba
Medix Share Purchase Agreement for the acquisition of RedeCan Pharm lapsed on
August 7, 2015. The companies maintained and continued the discussion of a new
agreement for Abba Medix to acquire RedeCan Pharm. As of this week, the two
companies could not agree to new terms and have decided to not extend and to
terminate the Share Purchase Agreement for the acquisition.
It had issued a Letter of Intent in early April (when the company was known by its predecessor name, Saratoga Electronics) and followed up with a Definitive Agreement in May. That deal had an $11mm transaction value, consisting of $8mm in cash ($3mm up front and the balance in the form of a promissory note) and $3mm in shares (6mm at $0.50 each).
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