Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) is going to acquire Cura Partners, Inc. the owners of the Oregon-based Select brand, in an all-stock deal valued at C$1.27 billion or $948.8 million. The company said that the acquisition includes Select’s manufacturing, processing, distribution, marketing, and retailing operations and all adult-use cannabis products marketed under the Select brand name, including all intellectual property. The deal is expected to close in 2019. The stock moved higher by over 8% on the news to lately trade at $10.72.
Select ‘s THC products are sold in more than 900 retailers, it is the leading cannabis brand in key Western states, including California, Arizona, Oregon, and Nevada. The combination of the two companies will provide immediate geographic diversification with Curaleaf’s footprint on the East Coast and Select’s brand strength on the West Coast.
“The transformational acquisition of Cura and the Select brand is another step in our journey to create the most accessible cannabis brands in the U.S.,” said Joseph Lusardi, CEO of Curaleaf. “The combination of Curaleaf and Select is a perfect fit. In addition, we intend to create significant operational synergies from the integration of Select’s wholesale business with our vertically-integrated cultivating, processing and retail platform.”
The statement said that proposed transaction will combine Curaleaf’s retail locations, vertical integration, wellness brand and strong East Coast market presence with Select’s wholesale model, lifestyle brand and leading West Coast market presence. Curaleaf said that significant cost synergies are expected to be realized through operational efficiencies, greater economies of scale, supply chain efficiencies and increased vertical integration.
“I could not be more excited about this transaction with Curaleaf and what it means for the Select brand and for our industry. The leading companies in the industry on the West Coast and the East Coast are now joining forces to progress the legalization and mainstream acceptance of cannabis across the country,” added Cameron Forni, CEO of Cura and founder of Select. “Cura and the Select brand would not have the exceptional platform for growth that we have today without the incredible team that has built our foundation – from our production staff to our sales and marketing teams, and our executive leadership.”
Last months Curaleaf reported its financial and operating results for the fourth quarter and full year ended December 31, 2018. The fourth quarter total revenue of $32 million increased 49% sequentially and 408% over the 2017 fourth quarter. Curaleaf delivered a net loss of $16.5 million, a steep drop from the previous quarter’s loss of $33 million, but the company reported a gain of $600k in the fourth quarter of 2017.
In 2018, Cura was named as one of the “Top 100 Companies to Work For” in Oregon by Oregon Business Magazine and placed No. 12 in the Large Companies category. In 2019, Cura won the award again demonstrating Cura’s ability to focus on its culture while growing its headcount by 400%.