Business
MediPharm Labs Corp. to Acquire VIVO Cannabis Inc.
Two global leaders in the medical wellness cannabis industry expected to combine complementary st...
About this update from Medipharm Labs Corp.
[{"type":"text","content":"MediPharm Labs Corp. to Acquire VIVO Cannabis Inc.Two global leaders in the medical wellness cannabis industry expected to combine complementary strengths of diversified revenue in multiple markets and channels to create a pro-forma Combined Company with over $50M in annualized revenue, based on Q3 2022.(1)(2)(3)(4)Pro-forma Combined Company is expected to have positive EBITDA(5) synergies of between $7M to $9M on an annualized basis within 12 months closing of the Transaction.(1)(2)(3)(4)Transaction is expected to accelerate MediPharm Labs' path to profitability, with possibility to reach positive EBITDA(5) and cash flow targeted in the first half of 2024.(1)(2)(3)Barrie, Ontario--(Newsfile Corp. - December 22, 2022) - MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ) (\"MediPharm\", \"MediPharm Labs\" or the \"Company\") and VIVO Cannabis Inc. (TSX: VIVO) (OTCQB: VVCIF) (\"VIVO\") today announced that MediPharm and VIVO have entered into a definitive arrangement agreement (the \"Arrangement Agreement\") whereby MediPharm has agreed to acquire VIVO in an all-equity business combination transaction (the \"Transaction\"). The Transaction is expected to combine two highly complementary businesses, creating a unique and market differentiating international medical cannabis leader. Upon the completion of the Transaction, existing MediPharm shareholders are expected to own between 65% and 79% of the combined company resulting from the Transaction (the \"Combined Company\") and VIVO shareholders are expected to own between 35% and 21% of the Combined Company. Under the terms of the Arrangement Agreement, holders of common shares of VIVO (\"VIVO Shares\") will receive between 0.2110 and 0.4267 common shares of MediPharm (the \"MediPharm Shares\") for each VIVO Share held, subject to adjustment (the \"Exchange Ratio\"). The Exchange Ratio at closing will be determined by the amount of interim working capital of VIVO (the \"Interim Working Capital\"), taking into account any funds advanced by MediPharm to VIVO up to a maximum of $3.75 million, by way of a promissory note (the \"Note\"). The Interim Working Capital will allow VIVO to continue operations in the ordinary course throughout the proposed closing period. Holders of VIVO Shares will be entitled to receive such number of common shares of the Combined Company as is equiva...