Cannabis Giant SNDL Grows Bigger: Finalizes Valens Acquisition Becoming 'A Leader And Trusted Partner' In Canadian Marijuana Space

SNDL Inc. SNDL completed the previously disclosed acquisition of all of the issued and outstanding common shares of The Valens Company Inc. VLNS VLNS, other than those held by SNDL and its subsidiaries, pursuant to a plan of arrangement under the Canada Business Corporations Act, for total consideration of approximately CA$138 million ($103 million) consisting of common shares of SNDL and assumption of Valens' CA$60 million non-revolving term loan facility.

With approximately CA$262.5 million in net cash and no debt, SNDL will continue to have one of the strongest balance sheets in the North American cannabis industry. The combined company will operate as SNDL Inc., headquartered in Calgary, Alberta.

Key Transaction Highlights

  • As a result of Valens' low-cost platform, SNDL will enhance its product line while offering pricing flexibility to retail partners.

  • Combining SNDL's cannabis cultivation operations with Valens' low-cost biomass procurement capabilities will enhance SNDL's ability to offer a wide range of customized products to meet customer and consumer desires.

  • The combination of SNDL and Valens is expected to deliver more than CA$10 million of annual cost synergies. Together with incremental revenue from greater distribution of Valens products, it is estimated that the transaction will deliver upwards of CA$15 million of additional EBITDA on an annual run-rate basis through synergies and other strategic initiatives.

"This is an exciting day for SNDL as we become stronger and more adaptable, with capabilities that provide us an opportunity to become a leader and trusted partner within the Canadian cannabis industry," stated Zach George, CEO of SNDL. "SNDL's existing consumer packaged cannabis business will be transformed by Valens' high-quality extraction, processing, and manufacturing capabilities. Broad capabilities in all relevant product categories will further our goals of bringing people together through exceptional products and experiences. With the close of this transaction, we will focus on integrating our assets and teams while delivering both cost synergies and incremental revenue from greater distribution of Valens products."

Governance and Leadership

The company is announced that Frank Krasovec has been appointed to the board of directors, effective January 17, 2023. The board now consists of six directors. Zach George will continue to serve as CEO of SNDL and Tyler Robson, the former CEO of Valens, will join the leadership team as president of cannabis, effective January 17, 2023. Andrew Stordeur, SNDL's former president and COO has left the company effective January 13, 2023.

Transaction Details

Pursuant to the transaction, former holders of Valens shares, received from SNDL, in exchange for each Valens share held, 0.3334 of a common share of SNDL . In connection with the transaction, SNDL issued an aggregate of 27.6 million SNDL shares to Valens shareholders as the consideration.

Following the closing of the transaction, there are 260.7 million SNDL shares outstanding, with existing SNDL shareholders holding approximately 89.4% of such outstanding SNDL shares and former Valens shareholders holding approximately 10.6% of such outstanding SNDL shares.

Price Action

SNDL shares were trading 4.19% higher at $2.365 per share at the time of writing Tuesday morning.

Get your daily dose of cannabis news on Benzinga Cannabis. Don’t miss out on any important developments in the industry.

Photo by Tim Foster on Unsplash

Related News

Valens Obtains Final Court Order Approving Merger With SNDL

SNDL And Nova Cannabis Team Up To Transform The Cannabis Retail Market In Canada

Posted In: CannabisM&ANewsPenny StocksSmall CapMarketsAndrew StordeurFrank KrasovecpremiumTyler RobsonZach George
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

The Benzinga Cannabis Capital Conference is coming to Florida

The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.

Get your tickets now on bzcannabis.com – Prices will increase very soon!


Loading...