Tilray has agreed a deal to buy all issued and outstanding securities of FHF Holdings Ltd – better known as Canadian cannabis food company Manitoba Harvest – in transaction worth up to C$419m.
The deal has been reached with Compass Group Diversified Holdings, LLC and other shareholders of Manitoba Harvest.
Under the terms of the agreement, Tilray will acquire Manitoba Harvest on a cash and debt-free basis. Of the aggregate maximum C$419 million purchase price, Tilray will pay C$277.5 million at closing, comprised of C$150 million in cash and C$127.5 million in Tilray shares. Six months after closing, Tilray will pay C$92.5 million, comprised of C$50 million in cash and C$42.5 million in Tilray shares. Tilray will issue an additional C$49 million in Tilray shares based on Manitoba Harvest achieving certain performance milestones in 2019
Headquartered in Winnipeg – located near its supply base in Canada – Manitoba, founded in 1998, is a well-known producer of branded, hemp-based foods such as hemp hearts, hemp protein powder and hemp snacks. Its products are currently carried in about 16,000 retail locations across the U.S. and Canada. It has plans to launch a line of CBD containing Broad Spectrum Hemp Extracts as well as a line-up of Hemp Yeah! wellness bars this summer.
The acquisition will expand Tilray’s product portfolio into the natural foods category and bring Manitoba Harvest expertise in working with cannabinoids, including cannabidiol (CBD).
By leveraging Manitoba Harvest’s established distribution network, Tilray plans to accelerate its expansion into the U.S. and Canadian markets, where legal, for CBD products.
Manitoba Harvest also brings to Tilray an experienced team and manufacturing capabilities, including the addition of two high quality BRC AA+ certified manufacturing facilities as well as significant sales and distribution capabilities.
“Tilray’s acquisition of Manitoba Harvest is a milestone for the cannabis industry. It builds on the strategic partnerships we have formed with consumer brand industry leaders and demonstrates our track record of disrupting the global pharmaceutical, alcohol, CPG, and functional food and beverage categories,” said Brendan Kennedy, Tilray President and CEO.
“We’re excited to work with Manitoba Harvest to develop and distribute a diverse portfolio of branded hemp-derived CBD food and wellness products in the U.S. and Canada.”
“We are excited about being an important part of the growth strategy for Tilray,” said Bill Chiasson, Manitoba Harvest CEO. “By leveraging our combined strengths and capabilities, we will be able to accelerate our mission of transforming consumer health through the power of hemp.”
Upon completion of the acquisition, Manitoba Harvest will operate as a wholly-owned subsidiary of Tilray
The transaction is expected to close within the next 30 days.Cannabis Business Worldwide