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Red White & Bloom Brands Inc. (CSE:RWB) (OTC:RWBYF) has wrapped its previously announced acquisition of Aleafia Health Inc. (OTCEM: ALEAF) and its subsidiaries.
Under the deal, RWB (PV) Canada Inc., a wholly owned subsidiary of RWB, acquired the intellectual property assets of Aleafia Health and subscribed for shares in the capital of each of Emblem Cannabis Corporation, Canabo Medical Corporation and Aleafia Retail Inc.
Total consideration for the transaction was $31,667,700, including:
As part of the deal, RWB also acquired a 9.4% ownership interest in One Plant (Retail) Corp., which operates a network of over 40 corporately owned and franchised cannabis retail locations in Ontario.
See also: Toronto Weed Producer Announces Successful Bidder For Sale And Investment Process
The acquisition provides to RWB:
"The Aleafia acquisition aligns seamlessly with RWB's goals of expanding its global footprint and fortifying its position in global cannabis markets," Eddie Mattei, CFO of RWB said. "With the financial support and ongoing commitment provided by RWB through the CCAA proceedings, Aleafia has already realized the benefit of multiple cost and cash improvements that will contribute to the combined company's prospective financial performance.”
The combined entity is expected to generate CA$140 million ($104.3 million) in distribution and retail annualized revenues across North American and international sales channels, RWB said in a press release on Monday.
The Toronto-based company expects that the transaction will be accretive on an EBITDA basis in fiscal 2024.
"We anticipate achieving annual synergies exceeding CA$12 million between RWB and the Aleafia Purchased Entities while promoting revenue growth, margin contribution, and value for all shareholders," Colby De Zen, president of RWB said.
Red White & Bloom's shares traded 7.6923% lower at $0.06 per share at the time of writing on Tuesday morning.