Little Green Pharma to Acquire Health House Australia for AU$1.25Mn

2 min read | December 20, 2024 02:14 PM AEDT | By Team Kalkine Media

Little Green Pharma to Acquire Health House Australia for AU$1.25Mn — Image source: Shutterstock

Details of the Transaction

Under the binding letter of intent (LOI), LGP has secured exclusivity until January 31, 2025, to conduct due diligence and finalize terms for acquiring 100% of Health House's issued shares. The acquisition terms include:

A purchase price of $1.25 million, calculated on a cash-free, debt-free basis as of January 31, 2025.
Adjustments for net payables and receivables at closing.
A non-refundable deposit of $50,000 and a refundable deposit of $25,000, both of which will be applied to the final purchase price upon closing.
The option for LGP to complete the acquisition during the exclusivity period.

Strategic Rationale

The acquisition is expected to deliver significant operational synergies for LGP, enhancing its vertical integration capabilities while expanding its revenue base. Health House's existing distribution network will remain a critical component of LGP's operations, ensuring continuity and growth potential.

LGP highlighted that the transaction offers an attractive valuation, further reinforcing its strategic focus on acquiring cashflow-positive or breakeven medicinal cannabis businesses.

Market Reaction and Outlook

Following the announcement, shares of LGP rose 4%, reaching 13 cents as of December 20, 2024. The modest market reaction reflects investor optimism about the acquisition's potential to strengthen LGP's position in the medicinal cannabis industry.

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