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Greenlane Completes Acquisition of DaVinci, Strengthening Portfolio of Higher-Margin Proprietary Owned Brands
- Company’s Owned Brands Portfolio Expands to Nine Higher-Margin Ancillary Brands
- Company Reiterates Targets of $70 Million and $100 Million for Greenlane Brands Revenue for 2022 and 2023, Respectively, with Expected Gross Margins in Excess of 45%
BOCA RATON, FL / ACCESSWIRE / November 30, 2021 / Greenlane Holdings, Inc. (“Greenlane” or “the Company”) (NASDAQ:GNLN), a global house of brands and one of the largest sellers of premium cannabis accessories, child-resistant packaging, and specialty vaporization products, today announced it has completed its previously announced acquisition of DaVinci, a leading developer and manufacturer of premium portable vaporizers.
DaVinci is expected to generate approximately $12 million in sales with gross margins of 60% in 2021. The acquisition is expected to be immediately accretive to Greenlane’s revenue and earnings. Total consideration for the acquisition will be up to $20 million, comprised of both cash and stock, depending on the achievement of certain performance-based earnouts.
“We are thrilled to complete yet another acquisition of a high-margin, fast-growing, and innovative ancillary brand that significantly enhances our proprietary brands portfolio,” said Nick Kovacevich, CEO of Greenlane. “DaVinci has been an outstanding partner for us over the years, and we are excited to now have them officially join Greenlane as our proprietary vaporizer brand. Even more exciting is the fact that we acquired the business at less than two times sales on the high end, which we believe is a fair multiple for a high-margin business that will be immediately accretive to our top and bottom line. This acquisition is part of our broader strategy to expand our product offerings, market share, revenue, margins, and profitability by scaling our portfolio of proprietary owned brands.”
Not only do we expect this strategy to help us enhance margins and profitability, but we believe it also expands our strategic defensive moat and positions us for rapid global expansion without any major catalysts, such as federal legalization.
Nick Kovacevich, CEO of Greenlane
This strategy becomes even more attractive when considering that virtually no other company is building a house of brands on the ancillary non-plant-touching side. Overall, we are pleased to have completed this acquisition for a leading brand, and even more so, to continue to make incremental progress on our Greenlane Brands revenue targets for 2022 and 2023.
Morrison & Foerster LLP acted as legal counsel to Greenlane. Hyperion Capital Inc. acted as the exclusive financial advisor to DaVinci. Alliance Legal Partners, Inc. and Ballard Spahr LLP acted as legal counsel to DaVinci.
About Greenlane Holdings, Inc.
Greenlane is the premier global platform for the development and distribution of premium cannabis accessories, packaging, vape solutions, and lifestyle products. We operate as a powerful house of brands, third-party brand accelerator, and omni-channel distribution platform, providing unparalleled product quality, customer service, compliance knowledge, and operations and logistics to accelerate our customers’ growth.
Founded in 2005, Greenlane serves a diverse and expansive customer base with more than 8,000 retail locations, including licensed cannabis dispensaries, smoke shops, and specialty retailers. As a pioneer in the cannabis space, Greenlane is the partner of choice for many of the industry’s leading multi-state operators, licensed producers, and brands, including PAX Labs, Storz & Bickel (Canopy-owned), Cookies, Grenco Science, and CCELL.
We proudly own and operate a diverse brand portfolio including DaVinci vaporizers, Pollen Gear™, the K.Haring Glass Collection by Higher Standards, Marley Natural™, and VIBES™ rolling papers. Higher Standards, Greenlane’s flagship brand, offers both a high-end product line and immersive retail experience with ground-breaking stores in New York City’s Chelsea Market and Malibu, California. Greenlane also owns and operates Vapor.com and VapoShop.com, two industry-leading, direct-to-consumer e-commerce platforms in North America and Europe respectively.
For additional information, please visit: https://gnln.com/.
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