The Valens Company Inc., a leading manufacturer of cannabis products, has announced that it has closed its previously announced acquisition of all the issued and outstanding shares of Green Roads and its manufacturing subsidiary. The cash and share transaction consideration totaled U.S. $40 million, plus up to an additional U.S. $20 million in contingent consideration payable upon the purchased business achieving certain EBITDA milestones. If all the Milestones are met in 2022, the transaction represents approximately 4.5x fiscal 2022 EBITDA.
Tyler Robson, chief executive officer, co-founder and chair of The Valens Company, said, “With the closing of this Acquisition, Valens now has a significant presence in the largest cannabinoid market in the world, representing a monumental step in our international expansion strategy and furthering our vision of becoming a global manufacturer of cannabis consumer packaged goods. We expect to realize strong synergies and to aggressively pursue various strategic opportunities that are now available to our combined business through this transaction, including expanding the distribution of our ever-growing product offerings overseas and further disrupting the North American market with innovative cannabis products. The combination of Valens and Green Roads makes for an unbeatable team, diversified distribution network, and unparalleled product development and manufacturing platform, which we expect will provide us the footprint to become one of the biggest players in the global cannabis health and wellness market. Stay tuned for updates on anticipated synergies as we move forward as a stronger, combined company.”
Over the next year, Valens expects to invest approximately $10 million into the Green Roads business to capitalize on the anticipated growth of the U.S. CBD market, projected to reach roughly U.S. $15.9 billion by 2026. The investment in Green Roads is expected to contribute to the further development of its highly successful e-commerce platform, support the expansion of its retail distribution network in the U.S., and increase the brand’s sales and marketing resources to drive market leadership in the health and wellness vertical.
Dale Baker, president & chief operating officer of Green Roads, said: “The combination of Green Roads and Valens creates a truly global company with a clear leadership position both within the U.S. CBD market and Canada’s domestic cannabis market. With this larger platform, we look forward to launching Green Roads products in Canada in the second half of 2021 and leveraging our own manufacturing facilities to export CBD products internationally. Valens and Greens Roads have a shared ethos of keeping our customers at the heart of our strategic decision-making and offer complementary products that foster brand loyalty and drive high margins. With our enhanced platform, we look forward to accelerating our global expansion plans and bringing our growing portfolio of products to an even broader customer base.”
For more information, visit www.thevalenscompany.com or www.greenroads.com.
