- This closing represents High Tide’s 5th global e-commerce
related acquisition in 2021, taking e-commerce revenue run-rate
from approximately $10.6 million on October 31, 2020 to just under
$60 million today.
- With almost 5 million site visits in 2020, Blessed CBD is
one of the most popular direct-to-consumer CBD brands in the
U.K.1
- Blessed has a strong financial profile which generated 81%
gross margins and 54% EBITDA margins for the 12 months ended August
2021.2
- Highly accretive transaction for shareholders, as Blessed
generated revenue of £5.1 Million and £2.8 Million in EBITDA for
the 12 months ended August 2021.3
High Tide Inc. (“High Tide” or the “Company”)
(TSXV: HITI) (NASDAQ: HITI) (FSE: 2LYA), a leading retail-focused
cannabis company with bricks and mortar as well as global
e-commerce assets, is pleased to announce, that further to its
press release dated October 7, 2021, the Company has completed its
acquisition (the “Acquisition”) of an 80% interest in
Enigmaa Ltd., operating as Blessed CBD, (“Blessed”) for
£9,064,000 (the “Transaction”), and will have a three-year
option to acquire the remaining 20% of Blessed at any time.
Founded in 2019 with its headquarters in Scotland, Blessed has
quickly grown to become one of the most popular brands for
hemp-derived CBD products across the U.K., including CBD oils,
creams, gummies, and capsules. In 2020 Blessed had almost 5 million
site visits and an average order value of approximately £75.
This is High Tide’s fifth acquisition in the global e-commerce
space in 2021, which brings High Tide’s online portfolio to a total
of eight e-commerce platforms across cannabis, hemp-derived CBD,
and consumption accessories, servicing customers across the U.K.,
E.U., and North America. These transactions have collectively
contributed to increasing the Company’s annual run-rate e-commerce
revenue from approximately $10.6 million at the end of October 31,
2020, to just under $60 million today.
The Acquisition was completed pursuant to the terms of a share
purchase agreement (the “Acquisition Agreement”), a copy of
which is available on the Company’s SEDAR profile. High Tide
acquired 80% of Blessed for consideration comprised of: (i)
1,136,551 common shares of High Tide (each a “High Tide
Share”) valued at £4,864,000 (the “Share
Consideration”), on the basis of a deemed price of $7.2856 per
High Tide Share, being equal to the volume weighted average price
per High Tide Share on the TSX Venture Exchange (“TSXV”) for
the ten consecutive trading days preceding the closing of the
Acquisition; and (ii) £4,200,000 in cash. In addition, 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 High Tide Shares issued pursuant to the Share Consideration
are subject to a statutory hold period of four months and one
day.
In addition to the foregoing, Blessed’s founder has agreed to
grant High Tide an option to acquire all the remaining shares in
Blessed not held by High Tide, and become the sole shareholder of
Blessed (the “Call Option”), at an enterprise value equal to
the trailing twelve (12) months of revenue at that time multiplied
by 2.2. The Call Option will be exercisable at any time for a
period of three (3) years following the Acquisition. In addition,
High Tide has agreed to grant Blessed’s founder an option to put to
High Tide the remaining shares in Blessed not held by High Tide
(the “Put Option”), at the same enterprise value of the Call
Option. The Put Option will be exercisable by Blessed’s founder for
a period of two (2) years following the first anniversary of the
Acquisition. The consideration under the Call Option or Put Option,
if exercised, will be satisfied in High Tide Shares, on the basis
of a deemed price per High Tide Share equal to the volume weighted
average price per High Tide Share on the TSXV for the ten (10)
consecutive trading days preceding closing of the Call Option or
Put Option, as the case may be.
KPMG LLP conducted financial due diligence on behalf of High
Tide for the Transaction. Garfinkle Biderman LLP and Ince Gordon
Dadds LLP are acting as legal advisors for High Tide in connection
with the Transaction and Carlsquare and Addleshaw Goddard LLP acted
for Blessed in connection with the Transaction.
In connection with the closing of the Transaction, Blessed’s
founder and Chief Executive Officer, Vithurs Thiru (known more
commonly as “V”), will join the High Tide team as Senior
Manager of Search (SEO) of the Company, and will help grow High
Tide's CBD business globally. In connection with V’s appointment,
High Tide granted 25,000 stock options (the “Options”) to V,
exercisable at CAD$7.17 per High Tide Share for a period of 3
years.
ABOUT BLESSED CBD
Enigmaa Ltd., operating as Blessed CBD is one of the leading
online retailers of hemp-derived CBD products in the U.K. The
company provides a marketplace with a wide variety of high-quality
products and formulas, affordable pricing, rapid dependable
shipping, and surprisingly personable customer service. Blessed CBD
has been featured as the best UK CBD Oil in several publications
including The Mirror, Reader’s Digest, and Maxim Magazine.
ABOUT HIGH TIDE
High Tide is a leading retail-focused cannabis company with
bricks and mortar as well as global e-commerce assets. The Company
is the largest Canadian retailer of recreational cannabis as
measured by revenue, with 101 current locations spanning Ontario,
Alberta, Manitoba and Saskatchewan, and was featured in the third
annual Report on Business Magazine’s ranking of Canada’s Top
Growing Companies in 2021. High Tide’s retail segment features the
Canna Cabana, Meta Cannabis Co., Meta Cannabis Supply Co. and
NewLeaf Cannabis banners, with additional locations under
development across the country. High Tide has been serving
consumers for over a decade through its established ecommerce
platforms including Grasscity.com, Smokecartel.com,
Dailyhighclub.com, and Dankstop.com and more recently in the
hemp-derived CBD space through CBDcity.com, FABCBD.com, and
BlessedCBD.co.uk, as well as its wholesale distribution division
under Valiant Distribution, including the licensed entertainment
product manufacturer Famous Brandz. High Tide’s strategy as a
parent company is to extend and strengthen its integrated value
chain, while providing a complete customer experience and
maximizing shareholder value. Key industry investors in High Tide
include Tilray Inc. (TSX: TLRY) (Nasdaq: TLRY) and Aurora Cannabis
Inc. (TSX: ACB) (Nasdaq: ACB).
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this release.
For more information about High Tide Inc., please visit
www.hightideinc.com, its profile page on SEDAR at www.sedar.com,
and its profile page on EDGAR at www.sec.gov.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This news release contains “forward-looking statements” within
the meaning of applicable securities laws. All statements contained
herein that are not clearly historical in nature may constitute
forward-looking statements.
Generally, such forward-looking information or forward-looking
statements can be identified by the use of forward-looking
terminology such as “plans”, “expects” or “does not expect”, “is
expected”, “budget”, “scheduled”, “estimates”, “forecasts”,
“intends”, “anticipates” or “does not anticipate”, or “believes”,
or variations of such words and phrases or may contain statements
that certain actions, events or results “may”, “could”, “would”,
“might” or “will be taken”, “will continue”, “will occur” or “will
be achieved”. The forward-looking information and forward- looking
statements contained herein include, but are not limited to,
statements regarding: the creation of synergies and cross-selling
across High-Tide’s e-commerce platforms; High Tide’s ability to
become a global leader in the e-commerce marketplace for
hemp-derived CBD products; the ability of V to grow High Tide’s CBD
business globally; the ability of the Acquisition to serve as an
entry point into the EU marketplace for the Company; V joining the
Company as General Manager of Digital Marketing and SEO; the
growth-rate of the global CBD market; High Tide’s e-commerce
revenue increasing to an annual run-rate of just under $60,000,000;
and the expected working capital of Blessed on Closing.
Forward-looking information in this news release are based on
certain assumptions and expected future events, namely: that upon
completion of the Transaction, High Tide will be able to increase
its annual run-rate; the Transaction will serve as an entry point
into the EU marketplace; High Tide’s financial condition and
development plans do not change as a result of unforeseen events;
there will continue to be a demand, and market opportunity, for
High Tide’s product offerings; the Transaction will create
synergies across its e-commerce platforms; V will join the Company
as General Manager of Digital Marketing and SEO; Blessed will have
the stated working capital upon closing of the Transaction; either
the Call or Put Option will be exercise; High Tide’s annual
run-rate will increase to $60,000,000 and current and future
economic conditions will neither affect the business and operations
of High Tide nor High Tide’s ability to capitalize on anticipated
business opportunities). Although considered reasonable by
management of High Tide at the time of preparation, these
assumptions may prove to be imprecise and result in actual results
differing materially from those anticipated, and as such, undue
reliance should not be placed on forward-looking statements.
These statements involve known and unknown risks, uncertainties
and other factors, which may cause actual results, performance or
achievements to differ materially from those expressed or implied
by such statements, including but not limited to: the potential
inability of the Company to continue as a going concern; the risks
associated with the cannabis and CBD industries in general; the
inability of High Tide to create synergies across it’s e-commerce
platforms; High Tide’s inability to become a global leader in the
e-commerce marketplace for hemp-derived CBD products; the inability
of V to grow High Tide’s CBD business globally; the inability of
the Transaction to serve as an entry point into the EU marketplace;
risks that the global CBD market will not grow at the anticipated
growth-rate; risks associated with potential legislative and/or
regulatory changes by the relevant governmental and/or regulatory
bodies; risk that V will not join the Company; risk that Blessed
will not have the requisite working capital upon closing of the
Transaction; risk that the Company’s annual run-rate will not
increase to $60,000,000; and risk that neither the Company nor V
will exercise the Call or Put Option.
Readers are cautioned that the foregoing list is not exhaustive.
Readers are further cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the
plans, intentions or expectations upon which they are placed will
occur. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those
anticipated.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in the United
States of America. The securities have not been and will not be
registered under the United States Securities Act of 1933 (the
“1933 Act”) or any state securities laws and may not be offered or
sold within the United States or to U.S. Persons (as defined in the
1933 Act) unless registered under the 1933 Act and applicable state
securities laws, or an exemption from such registration is
available.
1 Data according to Google Analytics. 2 Unaudited. 3
Unaudited.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211019005339/en/
Media Inquiries Omar Khan Senior Vice President - Corporate and
Public Affairs High Tide Inc. omar@hightideinc.com
Investor Inquiries Vahan Ajamian Capital Markets Advisor High
Tide Inc. vahan@hightideinc.com
High Tide (NASDAQ:HITI)
Historical Stock Chart
From Aug 2024 to Sep 2024
High Tide (NASDAQ:HITI)
Historical Stock Chart
From Sep 2023 to Sep 2024