Canadian firm Neptune Wellness Solutions Inc (TSX:NEP) will pay up to USD 150 million in cash and stock to acquire North Carolina-based commercial hemp firm SugarLeaf.
The target has a cold ethanol processing facility where it can process 1,500,000 kg a year. It uses non-GMO ethanol at extremely cold temperatures, utilising advanced lab techniques, to make cannabinoid rich oils.
Neptune earlier in May said it has signed a definitive agreement to buy SugarLeaf Labs LLC and Forest Remedies LLC, together referred to as "SugarLeaf". The company believes the US hemp market has huge potential.
The deal is expected to be finalised on or before July 31.
The buyer will pay USD 12 million in cash and USD 6 million in common shares initially. If the target achieves certain performance targets, Neptune would pay up to USD 132 million more over the next three years.
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Neptune to buy SugarLeaf in up to USD-150m transaction