Khiron Life Sciences Corp. (TSXV:KHRN), one of the Canadian marijuana stocks, said it has agreed to acquire Uruguay-based NettaGrowth International
SmallCapPower | April 12, 2019: Khiron Life Sciences Corp. (TSXV:KHRN), one of the Canadian cannabis stocks focused in Latin America, Tuesday announced that it has signed a definitive agreement to acquire NettaGrowth International Inc., as previously announced on January 25, 2019. As per the agreement, Khiron will issue 8,498,821 common shares to NettaGrowth shareholders at a deemed price of $1.61 per common share. At the time of deal’s closing, NettaGrowth will own all of the outstanding shares of Dormul S.A., a Uruguayan company that has obtained the first license to produce and export medical cannabis with THC for commercialization in Uruguay. This move would increase Khiron’s total production capacity up to 220 tonnes.
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Through the acquisition, Khiron will get a Uruguayan license, which will provide the Company access to a broader consumer demographic in several key markets. Also, the deal would enable the Company to diversify its composition to include adult use and flower cultivation distribution capabilities.
Mr. Michael Beck, an experienced capital markets professional and entrepreneur, would join the board of Khiron, while Mr. Joseph Mimran, an experienced brand builder and entrepreneur, would join the board of Khiron Colombia, contingent upon the TSX Venture Exchange approval for the deal.
Uruguay-based NettaGrowth, through Dormul, is well positioned to serve Brazil and the growing Latin American cannabis market. Dormul has secured a medical cannabis cultivation and commercialization license, with a cultivation capacity of up to 120 tonnes. Moreover, Dormul has an application pending for an extraction license, if approved, this would enable Dormul to produce medical cannabis-based CBD oils for both domestic and export purposes. In addition to this, Dormul has established a strategic partnership with Institut Pasteur de Montevideo, a prestigious foundation formed between the Uruguayan and French governments, focused on R&D of cannabis product.
Khiron Life Sciences CEO Alvaro Torres stated, “This acquisition adds considerable capacity and product diversity potential to the Khiron portfolio of assets. As the first country to legalize cannabis for adult use purposes, these Uruguayan licenses provide us the opportunity to address a broader demographic of consumers and export products to key regions of the world. Compared to the extract-only medical market of Colombia, the Uruguayan regulations permit the domestic and international distribution of flower. This is an excellent complement to our product focus in Colombia. I would like to thank all individuals involved in finalizing this definitive agreement and look forward to moving this transaction to close.”
Then, on Wednesday, Khiron Life Sciences said it has entered into an agreement with the prominent Colombian research hospital, Centro Dermatológico Federico Lleras Acosta, to establish a clinical research partnership focused on the effectiveness of medical cannabis for dermatological conditions.
Khiron Life Sciences is a Latin American cannabis company, having fully licensed operations in the country for the cultivation, production, domestic distribution, and international export of both THC and CBD medical cannabis. Khiron Life Sciences stock currently trades at a market capitalization of C$324.3 million with a price-to-book multiple of 4.5x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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