Halo Collective has signed a letter of intent and entered into exclusive negotiations to acquire Phytocann Holdings SA. The Planned Acquisition would add substantial revenue, EBITDA, geographic diversification, and an impressive CBD-based product lineup to Halo when closed. Halo is proposing to acquire Phytocann through a wholly-owned subsidiary to be formed by Halo in Ontario, Canada; Phytocann International Holdings. PIH is the planned vehicle for all of Halo's remaining non-THC assets anchored by Phytocann. Alexandre-Henri Lacarré, the founder of Phytocann and a successful European entrepreneur, is expected to lead PIH as its CEO upon closing the Planned Acquisition.
Phytocann's audited 2020 revenue and earnings before taxes, depreciation, and amortization were approximately €5.3 million and €1.2 million, respectively, for the twelve-month period ended on December 31, 20201. Phytocann is expected to publish audited numbers for the period ended on December 31, 2021, within the next 90 days. After the Planned Acquisition is completed, Phytocann's management projects net revenues and EBITDA of approximately €17 million and €4.3 million, respectively, for the first twelve-month period. These projections are based solely on Phytocann's existing European business driven by traditional and e-commerce revenue and do not include contributions from Halo's operations non-THC company portfolio and the launch of Phytocann's brands and e-commerce platforms into the United States.
"The potential acquisition of Phytocann is a cornerstone of our shareholder value enhancement strategy," commented Kiran Sidhu, Halo's Chief Executive Officer. "Phytocann brings multiple, premium-branded CBD products that complement Halo's existing wellness offerings developed for the United States market. In addition, we see meaningful synergies with Halo's recent acquisitions of Dissolve Medical, H2C Beverages, Simply Sweet Gummies, and Hushrooms. Halo's distribution agreement with Sway Energy is also expected to be contributed. Importantly, the addition of Phytocann's high-margin CBD business is projected to be immediately accretive to Halo's bottom line. We believe that by separating the THC and non-THC businesses, we can significantly enhance value creation for all of Halo's stakeholders. We expect PIT to follow a similar path to Akanda Corp."
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