High Tide Inc. (NASDAQ:HITI) (TSXV:HITI) (FSE:2LYA) has completed its acquisition of 100% of the equity interest of Livonit Foods Inc. operating as Bud Heaven which operates two retail cannabis stores in Ontario for CA$2.8 million. The stores are located at 77 Manitoba Street, and 125 Muskoka Road Highway 118 West, in Bracebridge. The Stores are the only retail cannabis stores that are currently operational in the Town of Bracebridge. For the three months ended October 31, 2021, Bud Heaven generated annualized revenue of CA$4.7 million and annualized Adjusted EBITDA of CA$0.8 million. The purchase price represents 3.5x annualized Adjusted EBITDA for the three months ended October 31, 2021.
The acquisition was completed pursuant to the terms of a share purchase agreement dated March 29, 2022. High Tide acquired 100% of Bud Heaven for CA$2.8 million, by issuing 564,092 common shares of High Tide and will pay CA$1 million, in cash, upon settlement of the post-closing working capital adjustment. Pursuant to the acquisition agreement, High Tide had the option to pay an amount equal to the difference between the volume weighted average price per High Tide share on the TSX Venture Exchange for the ten consecutive trading days preceding closing of the acquisition, and the discounted market price, as of the date the acquisition was initially announced, which allowed High Tide to pay the cash portion of the purchase price instead of issuing additional High Tide shares.
Pursuant to the acquisition agreement, the purchase price is subject to a post-closing working capital adjustment provision. Under this provision, the parties will adjust the purchase price to offset any increase or decrease of the net working capital as of the closing date. The closing of the acquisition remains subject to final approval from the TSXV.
Photo: Courtesy of CNW Group/High Tide Inc.
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