Irwin Naturals Inc. IWIN IWINF (FRA:97X) has taken the first step in the execution of its ketamine clinic rollup strategy – a move the company says is motivated by an intention to become the world’s largest chain of psychedelic mental health clinics.
This first acquisition target is Midwest Ketafusion in Iowa City, Iowa. The company's wholly-owned subsidiary
Irwin Naturals Emergence and the shareholders of Midwest Ketafusion, LLC have entered into a definitive agreement dated February 7, 2022, pursuant to which Irwin Emergence will acquire all of the issued and outstanding securities of Ketafusion.
Irwin’s CEO, Klee Irwin, said, “The leadership showed by Ketafusion in this space, and the access to care they are providing their fellow Iowans make this first upcoming acquisition in our national roll-up all the more exciting. Additionally, with a large proportion of the consideration being back-end loaded and earn-out based, the sellers, who will remain with the business, are aligned with our shareholders’ interests. With each acquired clinic to be renamed Irwin Naturals Emergence, we are the world’s first household name to enter the space and are executing towards becoming the largest clinic chain in the world.”
Founder and CEO of Ketafusion, Charlie Hong commented, “What impressed us about Irwin’s’ approach to America’s mental health crisis is their philosophy of using their existing national scale to drive down patient costs, while being profitable at all stages of the expansion. That’s unusual. Many of the publicly traded players in the space have business models that justify losing money and charge non-accessible prices to patients. Furthermore, the team at Irwin has proven itself in being capable of building a national brand with an exceptionally faithful customer base. We are looking forward to working with Irwin and the team and being part of taking this great brand nationwide, making mental healthcare accessible to all.”
The agreement is subject to certain customary closing conditions and regulatory approvals. As consideration under this agreement, Irwin will issue subordinate voting shares and proportionate voting shares in the capital of Irwin, equivalent to 750,000 SVS on an as-converted to SVS basis, at a deemed price of C$3.80 (US$3.00) per SVS and assume approximately US$116,000 of debt at closing.
The shareholder of Ketafusion will be eligible to receive additional consideration based on certain conditions. If in the first 5 years after closing, Ketafusion earns an adjusted EBITDA of USD $1 million during a calendar year in the allotted period, Ketafusion would receive Irwin shares having an aggregate value of USD $5 million.
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