The Toronto-based cannabis cultivator said the firm previously announced its intention to acquire 19.8% of Holigen. Upon closing, the firm will own 100% of the issued and outstanding shares of Holigen. The acquisition has been approved by each board of directors and is strongly supported by both management teams
"The full acquisition of Holigen is a natural evolution of our global cannabis strategy. The combination of Flowr's leading cultivation know-how and facility design with Holigen's global footprint, expertise in GMP and deep pharmaceutical experience is an excellent fit. The opportunities in the European and Australian-Asian medical cannabis markets are enormous and Holigen brings unmatched scale to service these regions," said CEO Vinay Tolia.
Holigen Holdings Ltd is a European-based cannabis company developing large-scale GMP-compliant grow facilities in Portugal and Australia. Flowr's strategic investment in Holigen provides the firm the ability to dramatically increase global scale.
"Over the course of this year, we have worked closely with Holigen's management to help develop their incredible assets, notably Aljustrel, their Portuguese outdoor cultivation facility. Aljustrel, which is expected to be operational in the second half of 2019, is a planned seven-million-square-foot outdoor cultivation footprint with an expected ability to produce over 500,000 kilos annually and was deemed a project of national interest by the Portuguese government. This acquisition positions us to be successful with two distinct and economically sustainable strategies, the premium dried flower market in Canada and the low-cost, large-scale extract medical market globally," added Tolia in a statement.
The company said the purchase price for the acquisition is expected to be satisfied by the issuance to DFT Trading Ltd. and Pleiades Trading Ltd, the vendors under the agrreement through 32 million series 1 voting convertible redeemable preferred shares of the company, cash values at 4.27 million euros. Flowr has agreed to pay the aggregate amount of 1.4 million euros to a numberr of Holigen's creditors, subject to closing. The company said the purchase price is subject to adjustment based on the working capital of Holigen at closing.
Shares of Flowr were at C$7.10 on Monday.
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