Neptune Wellness Solutions Inc. (Quebec, Canada) is expanding its North American hemp supply footprint by acquiring all of the assets of SugarLeaf Labs, LLC and Forest Remedies LLC (collectively, SugarLeaf), a commercial hemp company based in North Carolina. Through the acquisition, Neptune is establishing a substantial U.S. hemp extract supply chain, gaining a 24,000-sq-ft facility and SugarLeaf’s innovative cold ethanol processing technology, with a processing capacity of 1,500,000 kg. The facility uses hemp cultivated by licensed U.S. farmers.
SugarLeaf is being acquired by Neptune on a debt-free basis for $18 million, paid as $12 million in cash and $6 million in common shares. In addition, by earning over $8 million in annual adjusted earnings before interest, tax, depreciation and amortization (EBITDA) and other performance targets, additional consideration of up to $132 million will be paid over each of the next three years as a combination of cash and shares, making the maximum aggregate purchase price $150 million.
"With Neptune’s Canada-based operations ramping up production and the cannabis industry growing exponentially around the world due to an evolving legal global framework, now is the time to establish a state-of- the-art supply chain in the U.S. marketplace,” said Jim Hamilton, president and CEO of Neptune, in a press release. “SugarLeaf’s capacity, efficient production of high-quality extracts, and strong supplier relationships, combined with our existing competencies in customer relationships and science-based formulations, creates a strong value proposition to U.S. brands who want to offer differentiated products to consumers. Neptune’s objective is to be a world leader in extraction, purification, and formulation of value-added cannabis and natural health products.”
The transaction is expected to close on or before July 31, 2019.