VANCOUVER, BC, Nov. 2, 2020 /CNW/ - Village Farms
International, Inc. ("Village Farms" or the "Company") (NASDAQ:
VFF) (TSX: VFF) today announced it has completed the
acquisition from Emerald Health Therapeutics, Inc. ("Emerald") of
36,958,500 common shares of Pure Sunfarms Corp. ("Pure Sunfarms")
owned by Emerald, representing approximately 41.3% of the issued
and outstanding common shares of Pure Sunfarms (the "Pure Sunfarms
Transaction"). With the completion of the Pure Sunfarms
Transaction, Village Farms now owns 100% of the common shares of
Pure Sunfarms. The acquisition of the Pure Sunfarms shares will be
immediately accretive to Village Farms' net income.
"Village Farms conceived of a joint venture to launch its
Canadian cannabis business, and the result, Pure Sunfarms, is now
one of the leading Canadian cannabis companies. With this
transaction our shareholders will now fully benefit from our
initiative," said Michael DeGiglio,
CEO, Village Farms. "Pure Sunfarms is well positioned for long-term
growth as one of what we believe will be just a small number of
major suppliers to the Canadian cannabis market. Importantly, as
part of the Village Farms organization Pure Sunfarms can now pursue
additional opportunities to further leverage its success to date
and increase its earnings potential. I am pleased to welcome the
outstanding management team and employees of Pure Sunfarms to our
organization, and welcome back so many Village Farms' personnel who
transitioned to our cannabis venture in the early days to ensure
that Pure Sunfarms would benefit fully from Village Farms' decades
of experience and site-specific operational expertise. Pure
Sunfarms' CEO, Mandesh Dosanjh, and his entire team have done
exceptional work in bringing Village Farms' vision to reality, and
we look forward to their continued contribution to its success as
part of Village Farms going forward."
"The acquisition of the entirety of Pure Sunfarms is a defining
moment for Village Farms, furthering our transformation to a
vertically integrated, plant-based consumer packaged goods company.
It allows us to fully leverage the invaluable cannabis expertise
Village Farms has gained in combination with the organizational
strength underlying the Village Farms produce business to pursue
high-growth opportunities in emerging legal cannabis and
CBD markets in the United States and targeted
markets internationally. We will do so with the same
thoughtfulness, prudence, strategic decision making and focus on
near-term profitability and long-term return on invested capital
that has been fundamental to the success of our investment in Pure
Sunfarms."
"We especially look forward to the potential for U.S. regulatory
changes that would permit us to pursue our U.S. cannabis
aspirations. With one of the largest greenhouse footprints in the
U.S., located in one of the best regions for growing in the
country, alongside our cannabis success in Canada, we believe there is no company better
positioned for long-term success in the U.S. cannabis industry. We
are ready to move quickly and aggressively as soon as the
regulatory environment permits."
Upon closing of the Pure Sunfarms Transaction, Pure Sunfarms
will be fully consolidated in Village Farms' financial results.
Village Farms will report its third quarter financial results and
the third quarter financial results of Pure Sunfarms on
November 13, 2020. Village Farms'
financial results for the three and nine months ended September 30, 2020 will continue to reflect
Village Farms' 58.7% ownership of Pure Sunfarms as an investment in
a joint venture.
Within 75 days of the close, the Company is required to file
with the U.S. Securities and Exchange Commission, on Form 8-K/A,
historical financial statements for Pure Sunfarms, together with
unaudited pro forma combined financial statements of the Company as
if the Pure Sunfarms Transaction had occurred on January 1, 2020.
The total purchase price for the Emerald shares of C$79.9 million (US$60.0
million) was satisfied through a C$60.0 million (US$45.0
million) cash payment and a C$19.9
million (US$14.9 million)
promissory note due six months from the closing date of the Pure
Sunfarms Transaction.
Concurrent with the close of the Pure Sunfarms Transaction, the
existing Pure Sunfarms Shareholders Agreement between Village Farms
and Emerald has terminated, as has the Delta 1 – Option to Lease
Agreement.
Origin Merchant Partners acted as advisors to Village Farms for
the Pure Sunfarms Transaction.
About Village Farms International, Inc.
Village Farms is one of the largest and longest-operating
greenhouse growers in North
America, and is leveraging its decades of experience as a
large-scale, low-cost intensive agriculture and vertically
integrated produce supplier to pursue high-value, high-growth
plant- Consumer Packaged Goods opportunities in cannabis and
CBD in North America and selected
markets internationally.
In Canada, Village Farms'
wholly owned subsidiary, British-Columbia-based Pure Sunfarms, is based
one of the single largest cannabis operations in the world, the
lowest-cost greenhouse producer, one of the best-selling brands,
and has generated profitability for six consecutive quarters.
In the U.S., subject to compliance with all applicable U.S.
federal and state laws, Village Farms is pursuing a strategy to
become a leading developer and supplier of branded and
white-labeled CBD products targeting "big box" and other major
retailers and consumer packaged goods companies, and with one the
largest greenhouse operations in country, is well positioned for
the potential federal legalization of high-THC cannabis.
Internationally, Village Farms is strategically targeting
selected, nascent, legal cannabis and CBD opportunities with
significant long-term potential, with an initial focus on the
Asia-Pacific region through its
investment in Australia-based
Altum International.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains forward-looking statements within
the meaning of the United States Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and is
subject to the safe harbor created by those sections. This press
release also contains "forward-looking information" within the
meaning of applicable Canadian securities law. We refer to such
forward-looking statements and forward-looking information
collectively as "forward-looking statements". Forward-looking
statements may relate to the Company's future outlook or financial
position and anticipated events or results and may include
statements regarding the financial position, business strategy,
budgets, expansion plans, litigation, projected production,
projected costs, capital expenditures, financial results, taxes,
plans and objectives of or involving the Company. Particularly,
statements regarding future results, performance, achievements,
prospects or opportunities for the Company, the greenhouse
vegetable industry or the cannabis industry are forward-looking
statements. In some cases, forward-looking information can be
identified by such terms as "outlook", "may", "might", "will",
"could", "should", "would", "occur", "expect", "plan",
"anticipate", "believe", "intend", "try", "estimate", "predict",
"potential", "continue", "likely", "schedule", "objectives", or the
negative or grammatical variation thereof or other similar
expressions concerning matters that are not historical facts. The
forward-looking statements in this press release are subject to
risks that may include, but are not limited to: our limited
operating history, including that of Pure Sunfarms and our
start-up operations of growing hemp in the United States; the legal status of the
Pure Sunfarms cannabis business; risks relating to obtaining
additional financing, including our dependence upon credit
facilities; potential difficulties in achieving and/or maintaining
profitability; variability of product pricing; risks inherent in
the cannabis, hemp and agricultural businesses; the ability of Pure
Sunfarms to cultivate and distribute cannabis in Canada; existing and new governmental
regulations, including risks related to regulatory compliance and
licenses (e.g., Pure Sunfarms' ability to obtain licenses for its
Delta 2 greenhouse facility as well as additional licenses under
the Canadian Act Respecting Cannabis To Amend to the Controlled
Drugs and Substances Act, the Criminal Code and other Acts, S.C.
2018, c. 16 (Canada) for its Delta
3 greenhouse facility), and changes in our regulatory requirements;
risks relating to conversion of our greenhouses to cannabis
production for Pure Sunfarms; risks related to rules and
regulations at the U.S. federal (Food and Drug Administration
and United States Department of Agriculture), state and municipal
levels with respect to produce and hemp; retail consolidation,
technological advances and other forms of competition;
transportation disruptions; product liability and other potential
litigation; retention of key executives; labor issues; uninsured
and underinsured losses; vulnerability to rising energy costs;
environmental, health and safety risks, foreign exchange exposure,
risks associated with cross-border trade; difficulties in managing
our growth; restrictive covenants under our credit facilities;
natural catastrophes; the ongoing and developing COVID-19 pandemic;
and tax risks.
The Company has based these forward-looking statements on
factors and assumptions about future events and financial trends
that it believes may affect its financial condition, results of
operations, business strategy and financial needs. Although the
forward-looking statements contained in this press release are
based upon assumptions that management believes are reasonable
based on information currently available to management, there can
be no assurance that actual results will be consistent with these
forward-looking statements. Forward-looking statements necessarily
involve known and unknown risks and uncertainties, many of which
are beyond the Company's control, that may cause the Company's or
the industry's actual results, performance, achievements, prospects
and opportunities in future periods to differ materially from those
expressed or implied by such forward-looking statements. These
risks and uncertainties include, among other things, the factors
contained in the Company's filings with securities regulators,
including our most recent Annual Report on Form 10-K, our
subsequent Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K, each of which is available at www.sec.gov, as well as our
filings on SEDAR, available at www.sedar.com. In particular, we
caution you that our forward-looking statements are subject to the
ongoing and developing circumstances related to the COVID-19
pandemic, which may have a material adverse effect on our business,
operations and future financial results.
When relying on forward-looking statements to make decisions,
the Company cautions readers not to place undue reliance on these
statements, as forward-looking statements involve significant risks
and uncertainties and should not be read as guarantees of future
results, performance, achievements, prospects and opportunities.
The forward-looking statements made in this press release relate
only to events or information as of the date on which the
statements are made in this press release. Except as required by
law, the Company undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise, after the date on which
the statements are made or to reflect the occurrence of
unanticipated events.
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SOURCE Village Farms International, Inc.