TerrAscend Acquires Ratio Cannabis to Enter Ohio Market
Deal News | Nov 06, 2024 | Globenewswire
TerrAscend Corp., a prominent North American cannabis company, has announced a definitive agreement to acquire Ratio Cannabis LLC, a well-positioned dispensary in Ohio. The acquisition marks TerrAscend's entry into its sixth U.S. state and involves a total consideration of $10.3 million. The deal, expected to be immediately accretive on an EBITDA and cashflow basis, comprises $5 million in cash, $1.32 million in common shares, and a $3.98 million seller's note with 6% interest. The acquisition aligns with TerrAscend's expansion strategy in the Midwest, specifically in Ohio, where it aims to become a market leader through further acquisitions. The transaction awaits customary closing conditions, including regulatory approval from the Ohio Division of Cannabis Control. This strategic move enhances TerrAscend's retail footprint across the U.S., which includes operations in Pennsylvania, New Jersey, Maryland, Michigan, and California. Despite federal risks associated with cannabis operations, TerrAscend remains confident in its market strategy. The acquisition is part of a broader industry trend of rapid growth and consolidation in the cannabis sector.
Sectors
- Cannabis Industry
- Retail Industry
- Mergers and Acquisitions
Geography
- United States – The transaction takes place in Ohio, USA, with regulatory references specific to U.S. cannabis laws and state policies.
- Canada – TerrAscend is a TSX-listed company, reflecting its Canadian operations and regulatory considerations.
Industry
- Cannabis Industry – The acquisition of Ratio Cannabis by TerrAscend takes place within the cannabis sector, emphasizing the sector's expansion and regulatory considerations.
- Retail Industry – The article involves the acquisition of a dispensary, highlighting the retail aspect of the cannabis industry that TerrAscend is expanding into.
- Mergers and Acquisitions – The transaction between TerrAscend and Ratio Cannabis is a prime example of M&A activity as companies consolidate to expand market reach.
Financials
- $10.3 million – Total consideration for the acquisition of Ratio Cannabis, including cash, shares, and a seller's note.
- $5.0 million – The cash component of the acquisition price.
- $1.32 million – Amount in TerrAscend common shares included in the acquisition consideration.
- $3.98 million – Seller's note component of the acquisition price, with 6% interest over two years.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| TerrAscend Corp. | Bidding Company | Company | A leading North American cannabis company entering the Ohio market through acquisition. |
| Ratio Cannabis LLC | Target Company | Company | A high-performing dispensary in Goshen Township, Ohio, being acquired by TerrAscend. |
| Strike Partners | Financial Advisor | Company | Served as the exclusive financial advisor to Ratio Cannabis in the transaction. |
| Ohio Division of Cannabis Control | Regulatory Authority | Government | The regulatory body responsible for approving the transaction in Ohio. |