Little Green Pharma and Cannatrek announce merger

Two of the biggest Australian cannabis companies, Little Green Pharma and Cannatrek, have entered into a merger.

LGP's Managing Director, Paul Long, said: "Cannatrek is one of largest and most successful medicinal cannabis companies in Australia, boasting a highly attractive product portfolio, a diversified, vertically integrated business, a robust balance sheet, and strong cash and EBITDA generation. The company presents a wide range of potential synergies and growth opportunities for the Combined Group. As the Australian and global cannabis markets move toward consolidation and greater maturity, this transaction will ensure the Combined Group emerges as one of the largest and most vertically integrated medicinal cannabis businesses globally, and a leading player in the Australian and European markets."

Cannatrek's Chair, Brent Dennison, said: "Little Green Pharma has been a pioneer in the Australian market and showed great foresight in investing in the European market. By joining forces, we expect to enhance the profitability profile of the Combined Group in Australia, with an ongoing emphasis on strong cash generation. This will help unlock the substantial growth potential we see in LGP's European operations. With the platform this merged entity creates, I anticipate we will be active participants in the ongoing consolidation of the global medicinal cannabis market."

© Cannatrek

Under the terms of the scheme, Cannatrek shareholders will receive 1.835806 new LGP shares and 0.727502 new CV Shares for each Cannatrek share held on the scheme record date. Based on the agreed exchange ratios, Cannatrek shareholders are expected to hold approximately 60.5 percent of the combined group at completion, with existing LGP shareholders holding approximately 39.5 percent, prior to the conversion of any CV Shares.