TRSSF - TerrAscend Acquires Michigan Chain For $28.5 Million
TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF) completed its acquisition of Michigan dispensary chain Pinnacle Emporium from KISA Holdings, LLC, for $28.5 million . The purchase price will be a combination of cash and two promissory notes in an aggregate amount of $10 million and stock.
The acquisition includes six dispensary licenses, five of which are currently operational and located in the cities of Addison , Buchanan , Camden , Edmore and Morenci . The addition of Pinnacle expands TerrAscend’s retail footprint to 17 in Michigan and 32 nationwide.
The acquisition is immediately accretive to TerrAscend on both sales and EBITDA basis.
“We are excited to strengthen our Michigan footprint with the acquisition of Pinnacle,” said TerrAscend’s executive chairman Jason Wild . “This acquisition strategically expands our presence along Michigan’s border, to areas that previously had limited access to Gage and Cookies branded retail locations and products.”
The company said that it intends to rebrand each of the newly acquired dispensaries under either the Gage or Cookies retail brand. Each dispensary will carry the entire selection of Cookies and Gage branded products including, but not limited to Cookies, Lemonnade, Runtz, PowerzzzUp, Minntz and Grandiflora lines.
“We look forward to introducing our premier brands to new customers and solidifying our position as a top-tier retailer in the state, while continuing to scale and improve margins and profitability,” said Wild.
The purchase price is $28.5 million dollars , plus earn-out amounts payable upon achievement of certain post-closing milestones. The transaction will be completed on a cash-free, debt-free basis with a mutually agreed upon normalized target level of working capital.
Under the terms of the agreement , TerrAscend will pay $10 million in cash to pay down all Pinnacle liabilities and encumbrances and $8.5 million in stock at closing, with the remaining $10 million paid via the promissory notes. The notes will be recourse only to shares and assets of Pinnacle.
The transaction is subject to the approval and receipt of all required CSE, regulatory and court approvals.