Valens Company Archives - Green Market Report

Debra BorchardtApril 27, 2021
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4min11980

The Valens Company Inc.  (OTCQX: VLNCF) is buying Green Roads and its majority-owned manufacturing subsidiary in a deal potentially valued at $60 million. The price consists of $40 million, plus up to an additional $20 million in contingent consideration payable upon the business achieving certain EBITDA milestones. The deal will initially be done through a $25.4 million issuance in common shares and up to $14.6 million in cash.

Valens said that the Green Roads acquisition is expected to be accretive in 2021. If all the milestones are met in 2022, the deal represents approximately 4.5x fiscal 2022 EBITDA. On a pro forma basis, the combination would result in a business with total revenue of C$111.6M in 2020.

Based in South Florida, Green Roads is the largest privately-owned CBD company in the United States, with a focus on quality from its pharmacist-founded background.  Green Roads says it boasts a leading market share and brand platform in the US CBD industry, with an extensive distribution network consisting of over 7,000 retail stores and a robust e-commerce and marketing platform with over 30,000 five-star reviews across all its product lines. Green Roads is currently one of a small number of US CBD companies that produce their products in their own cGMP facilities, a testament to their dedication to integrity and excellence.

Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company, said: “After analyzing over a hundred companies across the US CBD market, we clearly recognized the value in the Green Roads platform with its best-selling brand. Our complementary businesses, culturally aligned teams, and shared ‘it’s personal’ mission to provide consumers with high quality, innovative cannabis products led to an undeniable combination that we believe will disrupt the industry. The acquisition of Green Roads represents only the first step in our US expansion strategy as we expect to continue to unlock complimentary, revenue-generating opportunities while we forge our presence and build our reputation in the world’s largest cannabinoid market.”

Valens noted that the deal will quicken its entry into the US market with the owned manufacturing and co-manufacturing platform located across two Florida -based facilities already producing significant revenue. Green Roads leverages its owned cGMP manufacturing infrastructure, which includes a production facility and warehouse, in addition to outsourced co-packing services for certain product lines allowing for lower overall capital commitments and increased flexibility to enter new consumer verticals. Green Roads’ scalable manufacturing infrastructure is expected to provide Valens with the agility to capitalize on future US opportunities with the potential to integrate its core expertise and proprietary extraction and manufacturing technologies into the existing value chain.


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