HempFusion to Buy CBD Brand Sagely Naturals for $ 25 Million – HEMPFUSION WELLNESS INC by Hempfusion Wellness Inc. (CBDHF)
CBD Health and Wellness Company HempFusion Wellness Inc. (TSX: CBD) (OTC: CBDHF) announced on Monday that it will purchase the CBD brand Sagely Naturals in a $ 25 million stock and cash transaction.
Sagely Naturals is one of the largest female-founded CBD wellness brands. Launched in 2015, it has since made its way to the shelves of popular retailers such as CVS, Rite Aid (NYSE: RAD), Sprouts Farmers Market (NASDAQ: SFM), Nordstrom (NYSE: JWN), among others.
Sagely is believed to be the number one CBD topical with a 23% market share in the pharmacy channel and 13.8% in the multi-point-of-sale channel, based on IRI data. Additionally, celebrities like Cameron Diaz, Zoe Saldana, and Molly Sims are known as consumers and brand investors.
The two companies have entered into a merger agreement, under which Sagely Naturals will become a 100% subsidiary of HempFusion.
As part of the deal, HempFusion will offset the acquisition with $ 25 million, or $ 2 million in cash and $ 23 million in shares of the company to be issued at a price of approximately $ 1.021 per share.
In addition, holders of interests in Sagely Naturals may be eligible for a earn-out of up to $ 5 million if Sagely Naturals meets specific revenue targets within twelve months of the transaction.
Once the transaction is finalized, Kerrigan Behrens and Kaley Nichol will continue as co-CEOs of Sagely Naturals.
Why is this important
Hemp Fusion, based in Denver, Colo., Highlighted several important benefits of this agreement, such as:
- Revenue Increase – Sagely Naturals’ previous year revenue of over $ 4.19 million combined with APCNA Holdings transaction more than tripled HempFusion’s 2020 revenue;
- Significant expansion of its distribution footprint with instant distribution to more than 14,000 stores;
- Introduction of ingestible CBD products in these 14,000 stores;
- HempFusions’ support for regulatory compliance should help Sagely Naturals to confirm its strong position in the CBD space;
- The Sagely Naturals C-Suite will advance HempFusion’s marketing, innovation operations and customer-channel relationships.
“Upon closing, the acquisition of Sagely Naturals immediately adds significant shareholder value,” said Jason Mitchell, ND, co-founder and CEO of HempFusion. “By more than tripling our 2020 revenue (combined with the Apothecanna closure), expanding to over 15,000 stores, expanding our distribution strategy to six channels, combining some of the best executive talent in the industry and by bringing together over 75 amazing and best-selling SKUs, HempFusion is in its strongest position to date. “
HempFusion shares were trading 6.46% lower at 79 cents per share at the time of writing.