Flora Growth is looking to grow its product portfolio and expand its market reach with the proposed acquisition of Franchise Global Health.
With principal operations in Germany, FGH’s acquisition will open Flora up to the German and European Union (EU) medical markets, which its management notes will significantly increase the company’s commercial international revenue.
Flora signed a definitive agreement with FGH to acquire 100% of all issued and outstanding shares by way of a statutory plan of arrangement. The company expects to close the deal in December following the presentation of the agreement to shareholders. Completion of the agreement will be subject to certain closing conditions customary for transactions of this nature, including, but not limited to, approval by the Supreme Court of British Columbia.
FGH will add to Flora’s expanding list of subsidiaries comprising Vessel Brand Inc. and JustCBD, among others. It is also expected to deliver at least $3 million in annualized cost synergies within the first year, mainly in reduced corporate administrative expenses.
“Through this proposed acquisition, we are connecting our commercial infrastructure and medical cannabis product portfolio to the German and EU medical markets while gaining direct access to European pharmaceutical distributions,” noted Luis Merchan, Flora’s Growth’s Chairman and CEO.
“We believe Franchise will significantly increase our international commercial revenue and provide essential distribution to German pharmacies and a growing wholesale market,” he added.
In August, Flora released its financial results for the first half of the 2022 financial year (H1 2022). Most notably, the company delivered on its promise to double revenue compared to H2 2021, lauding the integration of both Vessel and JustCBD. In addition, the company’s management expressed its confidence in maintaining the current trajectory to deliver its full-year guidance due to continued growth in its House of Brands.
“We continue to prudently manage our overhead and working capital as we expect to improve profitability going forward,” noted Mr. Merchan.
“We believe we have a path to profitability that few global cannabis companies can achieve in this difficult moment. The execution of our key initiatives is a testament to our team’s ability to deliver on plan. We will continue to execute as we focus on profitability and long-term value creation,” he added.
For more information:
Flora Growth
info@floragrowth.ca
www.floragrowth.ca