Mr. Paul Kania reports
SOL GLOBAL INVESTMENTS CORE PORTFOLIO COMPANY VERANO HOLDINGS ANNOUNCES ACQUISITION AND COMBINATION
SOL Global Investments Corp.'s largest core investing holding, Verano Holdings LLC, has signed a definitive merger agreement to acquire and combine operations with Alternative Medical Enterprises LLC, Plants of Ruskin LLC and affiliated companies, vertically integrated medical cannabis companies that apply pharmaceutical industry standards to developing, cultivating, producing and dispensing medical cannabis and medical cannabis products in Florida and Arizona. The transaction is expected to result in a highly accretive combination of Verano and AltMed with the resulting company operating under the Verano name.
The transaction will have a significant positive impact on the company's recently announced net asset value and the company will update the market regularly as information is available.
The company owns approximately 12.6 per cent of Verano as of the date of signing of the merger agreement.
Verano is a leading multistate owner, developer, operator and manager of cannabis cultivation, manufacturing and dispensing licences offering innovative products to the discerning, high-end customer market. Verano produces a full suite of premium, artisanal cannabis products sold under its consumer brands, including Encore edibles, Avexia and Verano. Verano's unique Zen Leaf-branded dispensary environments deliver an elevated cannabis shopping experience in both medical and adult-use markets. Active in 12 states of the United States, with 17 active retail locations and approximately 440,000 square feet of cultivation facilities, Verano has been profitable each year since its founding.
AltMed, founded in 2014 and profitable in recent years, is a fully integrated medical cannabis company known for its robust research and development pipeline exemplified by its award-winning MUV products and dispensaries. AltMed offers a full range of premium cannabis options developed in its vertically integrated operations in Arizona and Florida. With 27 active retail locations, AltMed has 220,000 square feet of cultivation facilities in Florida and 30,000 square feet in Arizona, which is rapidly expanding by an additional 50,000 square feet to meet increased demand.
This transformative transaction is expected to create a market leader in the United States by combining two profitable, fully integrated platforms with the ability to scale by entering new markets and expanding deeper into existing key markets. The combination will accelerate Verano's expansion into Florida and Arizona, currently among the largest and fastest-growing cannabis markets in the United States. Following the consummation of the transaction, the combined group of companies will operate under the Verano name and will have the ability to operate in 14 states, with eight cultivation facilities and 44 active retail locations. Approximately 32 additional retail locations are planned.
The combination is expected to result in substantial benefits to AltMed and Verano, including the following reasons for the transaction:
Establishes Verano as one of the three largest multistate operators (MSO) in the United States based on 2021 internal projections compared with current FactSet 2021 consensus estimates for revenue and earnings before interest, taxes, depreciation and amortization (EBITDA);
Creates a scale market leader well positioned for growth and accelerates expansion in limited-licence, high-growth markets -- specifically Florida and Arizona;
Includes a premium, comprehensive product offering encompassing both medically focused and lifestyle (four product brands -- Verano, Avexia, Encore and MUV -- and two retail brands -- Zen Leaf and MUV);
Joins companies with aligned cultures, industry-leading management teams, and best-in-class core competencies of people, processes, research and products;
Increases Verano's reputation as a manufacturer of high-quality products on a large scale by adding similar capabilities in new states;
Enhances the abilities of both companies to provide a superior, patient and customer-focused cannabis experience;
Combines experienced management teams with significant and diverse industry expertise, including pharmaceutical, real estate, manufacturing, agriculture and hospitality, with a proven record as disciplined cannabis industry operators and good stewards of capital;
Increases the combined company's financial profile with industry-leading margins and profitability.
"We are very excited to see Verano Holdings enter into a highly accretive business combination," said SOL Global chief financial officer Paul Kania. "The transaction will allow for two profitable entities to continue their successes together as a leading multistate operator in high-growth U.S. markets. As our largest core holding, the announced transaction is a positive development for SOL Global shareholders."
For further information on the transaction, please refer to the press release of Verano Holdings dated Nov. 11, 2020. There can be no assurances that the proposed transaction between Verano and AltMed will be completed as proposed or at all.
About SOL Global Investments Corp.
SOL Global is a diversified investment and private equity holding company engaged in the small-cap and mid-cap sectors. Its investment partnerships range from minority positions to large strategic holdings with active advisory mandates.
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