Vinergy Resources/MJ BioPharma (VIN.C) moved to strengthen its portfolio when the company announced today that it had inked a Letter of Intent (LOI) to acquire up to 51% of a European multinational plant breeding company.
For the moment, let’s refer to the aforementioned target as “Target” as its name has yet to be released.
According to the news release, the Target has audited annual sales of more than $14.0 million and an adjusted EBITDA in excess of $2.0 million.
Furthermore, the Target is a leading developer of plants and plants genetics servicing a global customer base with a wide selection of commercial agricultural services for over 25 years.
The transaction is meant to capitalize on the rapidly growing popularity and effectiveness of CBD use which the Hemp Business Journal estimates will create an American consumer market of $2.1 billion by 2020.
MJ BioPharma CEO, Kent Deuters commented, “CBD is revolutionizing the global chronic pain management market and we have determined we can utilize our first mover advantage to take a leading market position in multiple countries. Given the current marketplace dynamics, existing customer base and technology we now have access to; we plan to immediately roll out several new hemp and CBD initiatives. Additionally, it’s important for our investors to know that we are diversified and not totally dependent on the cannabis space but have multiple complimentary revenue verticals.”
The transaction is still subject to customary closing conditions and expected to close in tranches, with the first closing during Q1 2017.
MJ BioPharma works to develop technologies and products for the medicinal and recreational marijuana markets both domestically and internationally through four verticals involving medical, wellness, edibles and infused drinks.
FULL DISCLOSURE: Vinergy/MJ BioPharma is an EQUITY.GURU client.