SAMA - Clever Leaves Joins NASDAQ Cannabis Club
As announced in early June, Clever Leaves International is expected to be one of a few cannabis companies listed on the NASDAQ making this investment available to a substantially broader base of investors. The company has one of the largest cultivation and extraction operations in Latin America and is among the largest in the world, including Canada’s licensed producers and top extractors.
It is making its way onto the NASDAQ through the Schultze Special Purpose Acquisition Corp. (NASDAQ: SAMA). The deal is expected to close in the fourth quarter and will be known as Clever Leaves Holding Corp. Kyle Detwiler, Chief Executive Officer and Andrés Fajardo, President, will continue to lead the combined company.
Terms
The deal is valued at approximately $255 million, which includes an estimated $74 million of net cash ($111 million in cash, assuming no redemptions, and $37 million in debt) on the balance sheet at closing. Clever Leaves’ shareholders will be rolling over 96% of their equity ownership into Holdco, reflecting continuing majority ownership of the combined company in excess of 55% (assuming no redemptions). Clever Leaves will have an earn-out of up to 1.8 million shares reflecting an alignment of interests and limited dilution. The transaction is subject to a minimum cash condition of $60 million, after any redemptions, compared with approximately $132 million of cash held in SAMA’s trust.
George J. Schultze, Chairman and CEO of SAMA, said, “We are incredibly excited to partner with Clever Leaves and look forward to consummating this transaction. The Company is led by an outstanding and highly accomplished management team, and we believe that with its disruptive, low-cost and vertically integrated operating model, Clever Leaves is well-positioned for substantial growth and profitability. We view the transaction valuation as highly attractive to investors, and upon closing, we expect Clever Leaves to be among the best-capitalized companies in the cannabis industry. We believe that our strategic alignment, coupled with our own background in successfully building businesses, including through targeted M&A, has the potential to create significant value for shareholders over time.”
Clever Leaves
Clever Leaves has ownership in two medical cannabis distribution companies in Germany as well as a branded nutraceutical producer and distributor in the US and is currently distributing non-cannabis products. The company’s investments are anticipated to drive sales growth in rapidly expanding cannabis markets within Europe, Australia, the Middle East, and South America. Clever Leaves also recently secured a regional supply agreement with Canopy LATAM Corporation, a wholly-owned and controlled subsidiary of Canopy Growth Corporation.
The company has successfully developed low-cost, pharmaceutical-grade cannabis cultivation and extraction platform, operating under Colombian Good Manufacturing Practices (GMP) for cannabis production. Clever Leaves is also in the process of becoming one of the few cannabis companies in the world, and the only cannabis company in Latin America, to be granted a European Union Good Manufacturing Practice certification for extracts, subject to the successful completion of the certification process. The
Clever Leaves currently cultivates in over 1.9 million square feet of greenhouses. Clever Leaves employs a staff of approximately 500 globally and has raised approximately $120 million of capital to date, including substantial debt and equity investments from leading institutional investors with a demonstrated track record in the cannabis sector.
Kyle Detwiler, CEO of Clever Leaves, added, “We are proud of what we have accomplished to date in achieving an industry-leading position through our high-quality EU GMP certified operations and scalable cultivation and extraction capacity. These attributes have made us a global leader in low-cost cultivation with pharmaceutical-grade production primed for export. Our business combination with SAMA will significantly strengthen our balance sheet and take us to the next level, enabling us to accelerate the commercialization of our high-quality products as well as expand our operations and distribution in attractive markets around the world.”
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