Aphria will acquire CC Pharma, a distributor of pharmaceutical products to more than 13,000 pharmacies in Germany for an initial price of €24.5 million.
It is anticipated that the transaction will close in January 2019.
Aphria will pay €24.5 million in cash to CC Pharma at closing, with an earn-out multiple on future EBITDA (earnings before interest, tax, depreciation and amortization) of up to another €23.5 million following closing, if certain performance milestones are met.
According to Aphria, Germany is “a key market” in its international expansion.
Founded in 1999, CC Pharma is an importer and distributor of EU-pharmaceuticals for the German market, with over €200 million in annual revenue.
Aphria, through its subsidiary Aphria International, previously announced a supply agreement with CC Pharma to export approximately 1,200 kilograms of medical cannabis products from Canada to Germany.
The company is taking steps to growing presence in Germany significantly, taking what it refers to as “a three-pronged approach” covering demand, supply and distribution.
Earlier this year, through its wholly-owned subsidiary Aphria Germany, it acquired a 25.1% interest in Berlin-based Schöneberg Hospital, which is says is “the first step in Aphria Germany’s plans to build and operate pain treatment centres throughout Germany”.
“We are focused on leading the way in the medical cannabis market in Germany.”
Hendrik Knopp, Aphria Germany
Aphria is also building GMP certified cannabis vaults in Bad Bramstedt, northern Germany, with a storage capacity of 5,000 kilograms.
There are also plans in place to build a Research and Development indoor growing facility in Neumünster, Germany.
“This acquisition strengthens our foothold in Germany, one of the most highly sought-after medical cannabis markets in the world,” said Vic Neufeld, CEO of Aphria.
“CC Pharma is cash-flow positive and has significant experience with regulatory requirements and international logistics.
“It will be a strong addition to Aphria’s presence in Germany, providing deeper access to the important pharmacist channel and advancing our ambitious global growth strategy.”
“We are pleased to join forces with a premier global cannabis company.”
Dr. Manfred Ziegler, CC Pharma
Dr. Manfred Ziegler, Managing Director of CC Pharma said: “We are pleased to join forces with a premier global cannabis company, whose commitment to quality, safety and patient care closely aligns with our own.
“This is an exciting opportunity to build on our established network and advance our participation in a rapidly growing, emerging industry.”
Hendrik Knopp, Managing Director of Aphria Germany added: “We are focused on leading the way in the medical cannabis market in Germany.
“By combining Aphria’s expertise with CC Pharma’s established local market presence, we are well positioned to continue on that journey.”Cannabis Business Worldwide