TerrAscend Corp. (“TerrAscend” or the “Company”) (CSE:TER, OTCQX: TRSSF), a leading North American cannabis operator, today announced it has entered into a definitive agreement to acquire GuadCo, LLC and KCR Holdings LLC (collectively “KCR”) for an implied enterprise value of US$70 million (the “transaction”). Upon close, the transaction will add three retail dispensaries located in Bethlehem, Allentown and Stroudsburg to complement the Company’s existing retail footprint in Southeastern Pennsylvania.
As an operator of three well managed dispensaries in the Northeast region of Pennsylvania, KCR expands TerrAscend’s retail footprint, diversifies the Company’s customer base and enhances margins through deeper vertical integration. The transaction will be immediately accretive upon closing, which is expected to occur in the second quarter, subject to customary regulatory approvals.
“The Pennsylvania medical cannabis market is a key focus for the Company,” said Jason Wild, Executive Chairman of TerrAscend. “This transaction doubles our owned footprint to six dispensaries in the state and provides patients in Pennsylvania’s Northeast region access to TerrAscend’s outstanding products, service, and support. This expanded retail footprint further solidifies our position as the leading branded cultivator and manufacturer in Pennsylvania.”
Transaction Details
TerrAscend currently owns 10% of KCR and will acquire the remaining 90% of the equity for total consideration of $63 million, comprised of $36 million in stock, $20.25 million in cash and a $6.75 million note. The purchase price is expected to represent a mid-single digit multiple of KCR’s 2021 EBITDA.
