Curaleaf Holdings, Inc. has signed a definitive agreement to acquire EMMAC Life Sciences Limited, the largest vertically integrated independent cannabis company in Europe.
The proposed transaction provides Curaleaf with a developed platform for entry into the European cannabis market. Curaleaf will acquire EMMAC for base consideration of approximately $286 million to be paid 85 percent in Curaleaf subordinate voting shares and 15 percent in cash. Contingent consideration of up to $57 million will be paid in Curaleaf subordinate voting shares and cash in the same ratio based upon the successful achievement of performance milestones.
As Europe's largest vertically integrated independent cannabis company, EMMAC's platform brings cultivation, EU-GMP processing, distribution and R&D operations across several key European medical cannabis markets, including the United Kingdom, Germany, Italy, Spain and Portugal. EMMAC also has an operational presence and partnerships in European Union countries that are enacting new medical cannabis access programs. EMMAC's Portugal based cultivation facility is an industry leader in cannabis flower production cost.
"Curaleaf's acquisition of EMMAC provides an advanced base to reach scale within the nascent European cannabis market and transform Curaleaf into a truly international cannabis consumer packaged goods company,” said Curaleaf Executive Chairman Boris Jordan. “The consumer and political liberalization trends around cannabis that are sweeping the U.S. are also increasingly taking hold in Europe. Curaleaf will seek to leverage our branded cannabis consumer packaged goods strategy across Europe, a market which provides for cross-border cannabis distribution. The European cannabis market has the potential to exceed the U.S. cannabis market over the long-term and will help fuel our growth for years to come."
EMMAC's best-in-class management team brings extensive experience leading and delivering in highly regulated industries. Following the successful completion of the proposed transaction, the EMMAC management team will continue to lead Curaleaf's new European presence, driving local European strategy and day-to-day operations under the leadership of Antonio Costanzo, Chief Executive Officer of EMMAC.
Terra Verde, EMMAC's European market cultivation facility in Portugal, is one of the oldest licensed cannabis growing facilities in Europe with approximately 2 hectares of cultivation area. It provides EMMAC with the potential to serve customers across key European medical cannabis country markets as well as supporting exports internationally to countries such as Israel, among others. EMMAC plans to significantly increase its cultivation capacity in 2021, and to exceed 10 tons per year by 2022, in order to accommodate future growth related to the expansion of access to cannabis across the major European medical and adult-use, as well as export markets.
"Curaleaf's acquisition of EMMAC is not only a significant milestone for EMMAC, but for the European cannabis market as a whole,” said EMMAC CEO Antonio Costanzo. “As part of Curaleaf, a well-capitalized leader of the U.S. cannabis market, EMMAC is poised to exploit the rapid pace of growth of the European market, driven by regulatory change and the increasing demand for access to premium quality cannabis products. The combination of Curaleaf and EMMAC creates a global platform to address these large new opportunities across Europe. With EMMAC's science-led approach, wealth of local market experience, as well as our network of supply and distribution partnerships throughout Europe, we are now uniquely positioned to reinforce our place as one of Europe's leaders in the production and supply of medical cannabis, wellness CBD, hemp and other derivative products."
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