Business
Sugarmade Signs LOI to Acquire Major Hydroponic Supplier, Raises FY2019 Sales Outlook to $70M
Sugarmade Signs LOI to Acquire Major Hydroponic Supplier, Raises FY2019 Sales Outlook to $70M.
About this update from Sugarmade, Inc.
[{"type":"text","content":"\n\n\n\nSugarmade Signs LOI to Acquire Major Hydroponic Supplier, Raises FY2019 Sales Outlook to $70M\n\n\n\n\n\nSugarmade Signs LOI to Acquire Major Hydroponic Supplier, Raises FY2019 Sales Outlook to $70M\nPR Newswire\nMONROVIA, California, October 17, 2018\n\n\n\nMONROVIA, California, October 17, 2018 /PRNewswire/ --\n\nSugarmade, Inc. (OTCQB: SGMD), one of the largest publicly traded hydroponics supply companies, today announces the signing of a binding Letter of Intent (\"LOI\") to acquire Sky Unlimited, LLC, dba Athena United (www.AthenaUnited.com), a California-based supplier of cannabis cultivation materials to wholesalers and large commercial cannabis cultivators. Sugarmade expects this acquisition to be highly accretive to earnings and shareholder value and thus is revising its guidance for full-year 2019 revenues to more than $70 million.\n\nSugarmade's revenue within the cannabis cultivation supply sector is primarily derived from online sales, whereas Sky Unlimited's revenues are mainly generated via direct sales to wholesalers and large commercial cultivation companies. Management believes that combining its focus on e-commerce with Sky Unlimited's larger commercial operator-focused business will result in strong marketing, manufacturing and logistical synergies, as well as improved margins and other corporate benefits.\n\n\"The trend in cannabis cultivation is toward the larger commercial cultivation operations, and Sky Unlimited is in the thick of that dynamic marketplace,\" commented Jimmy Chan, CEO of Sugarmade. \"This year, Sky Unlimited and its associated operations are expected to produce in excess of $40 million in revenues with profitability and positive cash flow. This new revenue stream combined with our recently upwardly guided revenue forecast of $30 million for next year will make Sugarmade one of the largest publicly traded suppliers to the booming cannabis cultivation marketplace, with a combined revenue forecast for next year in excess of $70 million.\"\n\nSugarmade's market strategy is to cover three major areas supplies for cannabis cultivation: 1) online and e-commerce; 2) the wholesale market, which services brick and mortar retailers; and 3) large-scale commercial cultivation operations.  \n\n\"As a result of successfully acquiring Sky Unlimited, we anticipate revenue and growth...