TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF) has signed an agreement to acquire Ilera Healthcare, one of five vertically-integrated cannabis cultivator, processor, and dispensary operators in Pennsylvania.
Ilera’s cultivation and processing facility in Waterfall includes a genetic library of over 170 cannabis strains, a state-of-the-art greenhouse designed for optimal plant growth and minimal environmental impact, clean CO2 and ethanol extraction capabilities, and packaging technology.
Ilera has a dispensary in Plymouth Meeting. In the next six months, the company expects to open two additional dispensaries in Region 1, which includes Lancaster, Philadelphia, Chester, Bucks, Berks, Delaware and Schuylkill counties.
In addition to selling its products in its own dispensary, Ilera also distributes its dried flower, concentrates, tinctures, and topicals to 50 of Pennsylvania’s 52 medical cannabis dispensaries.
TerrAscend has agreed to acquire 100% of the equity of Ilera for between US$125-$225 million, consisting of cash and shares.
On closing, TerrAscend will pay to the sellers US$25 million in cash, subject to customary closing adjustments, and an additional US$25 million worth of proportionate voting shares in the equity of TerrAscend equivalent to approximately 5,059.102 proportionate voting shares.
Additional cash consideration of up to US$175 million may be paid to the sellers based on Ilera achieving certain specified revenue and profitability targets, with staged payments being made in 2020 and 2021.
Ilera’s senior operating team – including CEO Greg Rochlin, Director of Cultivation Andrew Sack, and Chief Scientific Officer Oludare Odumosu – will continue in management positions and are expected to work within the TerrAscend organization.
The deal is expected to close in the fourth quarter of 2019, subject to regulatory approvals by the Pennsylvania Department of Health as well as certain customary closing conditions.