LAVAL, QC – Neptune Wellness Solutions Inc. (NASDAQ: NEPT), a health and wellness company, announced today that is has entered into a binding agreement to divest its cannabis business which includes the cannabis plant in Sherbrooke, Québec, the Mood Ring and PanHash brands, and related assets.
The Company has reached an agreement with PurCann Pharma Inc., a subsidiary of Groupe SiliCycle, a Quebec based company with over 27 years of experience with extracting and purifying active ingredients from natural biomass, to purchase Neptune’s cannabis assets for C$5.15 million to be paid in cash.
Neptune intends to use the net proceeds from the sale of these assets to for working capital and other general corporate purposes.
As part of the Transaction, the Company has received an opinion from its financial advisor, Stifel GMP, that the consideration to be received by the Company as part of the Transaction is fair, from a financial point of view. The Transaction is expected to close on or before November 15, 2022, upon completion of standard closing requirements.
Ray Silcock, Chief Financial Officer of Neptune, said, “The complete divestiture of our cannabis business is a critical milestone in executing upon our strategy to become a leading CPG company. We are nearing an inflection point with our flagship brand Sprout Organics and expect it to serve as the key growth driver for Neptune going forward. In addition, the divestment of the cannabis assets will allow us to realize significant cost savings and operational streamlining from redirected resources towards our simplified corporate structure.”
PurCann Pharma is already present in the Canadian cannabis market with its therapeutic brand OOVIE and its recreational cannabis brand OLLOPA. Hugo St-Laurent president of PurCann Pharma is delighted: “With this transaction, PurCann Pharma consolidates its position in the cannabis market and is also aligned with our mission to provide pharmaceutical grade ingredients and cannabinoids to the life science market.”
Neptune has retained Stifel GMP as its sole financial advisor and Osler, Hoskin & Harcourt LLP as legal counsel in connection with the Transaction.
Statements in this news release that are not statements of historical or current fact constitute “forward-looking statements” within the meaning of applicable securities laws. Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of Neptune to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes”, “belief”, “expects”, “intends”, “projects”, “anticipates”, “will”, “should” or “plans” to be uncertain and forward-looking. Forward-looking statements relate to future events or future performance and reflect management’s expectations or beliefs regarding future events including, but not limited to, statements with respect to : the timing and outcome of the Transaction; the anticipated benefits of the Transaction to the parties; impact of the Transaction on the Company. In respect of the forward-looking statements and information concerning the anticipated benefits and completion of the Transaction and the anticipated timing for completion of the Transaction, the Company has provided such statements and information in reliance on certain assumptions that it believes are reasonable at this time. Although the Company believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward-looking statements and information included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information or forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.
There can be no assurance that the Transaction will occur, or that it will occur on the terms and conditions contemplated in this news release. The Transaction could be modified, restructured or terminated. Actual results could differ materially from those currently anticipated due to a number of factors and risks. The Transaction cannot close until the required regulatory approval is obtained.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement and the “Cautionary Note Regarding Forward-Looking Information” section contained in Neptune’s latest Annual Information Form, which also forms part of Neptune’s latest annual report on Form 40-F, and which is available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov/edgar.shtml. All forward-looking statements in this news release are made as of the date of this news release. Neptune does not undertake to update any such forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
(This information is primarily sourced from Neptune Wellness Solutions Inc. Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).