Regular readers with an interest in psychedelics will know we recently started talking to a company called Delic Holdings (DELC.C), and that it was a company coming to the market, not claiming it had the answers to profitability in a competitive space, or that it would lead the world in this or that but, rather, saying ‘we’ll figure it out in time, as opportunities arise, no rush y’all.’
Despite the absence of a defined business plan, the stock has risen nicely because, if anyone’s going to figure this sector out, it’s going to be this team.
The C-suite and board have been around the psychedelic space for a long while, and the cannabis space prior to that, and have created a strong media and marketing footprint that allows them to bring a real crowd to an acquired business.
The downside of that pitch is, the pressure has been on to quickly come up with a plan, and do the work to fulfill that plan.
To their credit, today, Delic announced they’ve signed a binding letter of agreement to acquire Ketamine Infusion Centers LLC, with clinics in Phoenix, Arizona and Bakersfield, California, that provide have brought in US$1.5 million in revenue since 2019, and have been growing steadily in that time.
Transaction Highlights
- The Transaction establishes Delic as a diversified psychedelics organization. KIC has been growing steadily with revenues in excess of USD$1.5 million since 2019
- KIC will be Strategically Positioned to Leverage Delic Platform and Brand: Delic expects to drive patients to KIC through its media platform and become a national leader
- Established History of Providing Ketamine Infusion Services. The management team at KIC has been in business for 3 years expanding services throughout the United States
- Management Expertise. The acquisition of KIC will add a team of 6 medical professionals and employees bringing a wealth of industry experience and knowledge to Delic
The company has an aggressive growth strategy that will be fueled by Delic’s ability to deliver capital and clientele, and the deal to get them on board has not been rushed. Rather, it’s been one that featured a ton of due diligence behind the scenes, a lot of trust building, and a lot of planning looking forward.
The deal will cost Delic US$2.25 million with opportunities for that to expand based on profitability and forward revenue targets. Everyone involved in receiving shares in the deal is bound to a contractual hold period where those shares will be released in small tranches every six months, meaning that Delic’s share price is not going to get pounded out like some have after doing similar acquisition deals over the last year.
With all the hype in the psychedelics space, with some companies hitting billion dollar market caps with business plans that would rely on laws to change before they can sell anything, and others buying Caribbean AirBnBs and calling them ‘clinics’, Delic’s move into purchasing what could legitimately be seen as the leading clinical target in North America, with actual revenues and a growing client base, the wheat is quickly beginning to show itself from the chaff.
— Chris Parry
FULL DISCLOSURE: Delic Holdings is an Equity.Guru marketing client
