Aphria Inc. (TSX:APH) will partner with South Africa-based Verve Group to supply high-grade, low-cost cannabis to the African continent
SmallCapPower | May 30, 2018: Aphria Inc. (TSX:APH) Monday announced that it has entered into a series of agreements with South Africa-based Verve Group of Companies (VGC), resulting in the formation of a joint venture named CannInvest Africa Ltd. Verve Group is founded by Richard Davies, a South African with more than 20 years of experience in phytoextraction of African medicinal plants. The joint venture agreement will happen through a combination of a share-for-share swap and cash payment of $4.05 million – Aphria will gain 50% stake in CannInvest, which in turn will acquire VGC’s existing 60% ownership interest in Verve Dynamics Inc., a licensed producer of medical cannabis extracts in Lesotho.
For Our Complete Coverage Of Canadian Marijuana Stocks Click Here
Aphria’s CEO Vic Neufeld remarked, “We are very excited to bring this deal, which was inherited through our acquisition of Nuuvera, to a very successful close. Given the abundant natural resources and our collective expertise and that of our partners, Verve is poised to become one of the lowest-cost producers of medical cannabis extracts in the world. This represents another significant pillar in our strategic international expansion, where our presence extends to more than 10 countries across five continents.”
Read: Canadian Cannabis Stocks That Are Top Takeover Targets
Verve is located in The Kingdom of Lesotho, which is the first African country to introduce licenses for the cultivation, extraction, sale and exportation of cannabis for medical use. CannInvest’s partner in Verve is the Matekane Group of Companies Ltd. (MGC), founded by Sam Matekane, who is involved in various industries including construction, mining, farming, hospitality, property management, and aviation. Through this partnership, Verve will supply high-grade, low-cost cannabis isolates to the African continent and, through Aphria international’s distribution network, to markets across the globe.
Aphria, via Nuuvera, previously entered into an off-take agreement with Verve, which is intended to serve Aphria’s international markets. Aphria’s stock currently trades at market capitalization of $2.51 billion with price-to-book multiple of 2.89x and enterprise value-to-revenue multiple of 79.57x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
To read our full disclosure, please click on the button below:
