The Toronto-based company is the Canadian parent of a Colombian cultivator and producer of medicinal-grade cannabis oil.
Shares of PharmaCielo fell on Thursday afternoon, sitting 8.5% lower at C$7.45.
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Creso Pharma is a global medicinal cannabis company specializing in research, development and production of therapeutic, nutraceutical and animal health products.
Under the terms of the acquisition, PharmaCielo will pay A$0.63 per Creso Pharma share, a 50% premium over the closing price on May 31. PharmaCielo will issue shares to Creso Pharma priced at C$7.6166 per share, an exchange ratio of 0.0775 PharmaCielo shares per each Creso Pharma share.
The acquisition creates a combined company that is poised to become a “global powerhouse” in the medicinal cannabis industry, according to David Attard, CEO of PharmaCielo.
"The acquisition affords us the opportunity to bring our high-quality Colombian oil production to market immediately and expand into higher-margin, branded product sales faster by harnessing the expertise of a proven and highly engaged commercialization team possessing both an immediately available product portfolio and active international sales channels," Attard said in a statement.
The combined company will quadruple its global footprint with presence in more than a dozen countries spanning North and Latin America, Switzerland, Europe, the Middle East, Australia and New Zealand, according to PharmaCielo’s Attard.
"The quality and scale of PharmaCielo's cultivation and oil extraction operations in Colombia complements our focus on meeting global demand for the highest quality CBD and THC based therapeutic, nutraceutical and animal health products through increased access to the necessary quality and volume of oil production," said Dr. Miri Halperin Wernli, Co-Founder and CEO of Creso Pharma.
Both boards and shareholders of Creso and PharmaCielo have approved the deal. The companies now await the go-ahead from the TSX Venture Exchange and the Australian Securities and Investment Commission, as well as Australian Court approval.
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