CALGARY,
AB, March 28, 2023 /CNW/ - SNDL Inc. (NASDAQ:
SNDL) ("SNDL" or the "Company") is pleased to
announce that it has entered into an agreement (the
"Agreement") with Lightbox Enterprises Ltd.
("Lightbox") to acquire four cannabis retail stores
operating under the Dutch Love Cannabis banner ("Dutch
Love"). Under the Agreement, SNDL will acquire from Lightbox
the rights to four Dutch Love stores and the rights to use certain
Dutch Love related intellectual property for a total consideration
of $7.8 million.
As part of the Agreement, SNDL will acquire the rights to three
Dutch Love stores in British
Columbia and one store in Ontario. The combined assets generated annual
revenue of $11.5 million in 2022,
with an average gross margin of 36.5%. The completion of the
acquisition is expected to further solidify SNDL's position as a
multi-banner cannabis retail operator by enhancing the Company's
market share and its exposure to a broader consumer base in two key
markets.
"We are excited by this opportunity to expand SNDL's retail
network," said Zach George, Chief
Executive Officer of SNDL. "We believe we have chosen the top
performing Dutch Love stores located on some of the best real
estate available. This acquisition creates a new opportunity to
work with Canada's top licensed
producers to deliver high-quality cannabis and experiences to the
Dutch Love target shopper."
Transaction Details
The Transaction is expected to be completed in the context of
Lightbox's proceedings under the Companies' Creditors
Arrangement Act from the Supreme Court of British Columbia (the "Court"). On
December 2, 2022, the Court granted an order that approved a
sale and investment solicitation process ("SISP") in respect
of the assets, undertakings and properties of Lightbox, and the
Agreement is the result of the SISP process.
Consideration for the transaction will consist of:
- Cash in the amount of $1.5
million payable to Lightbox
- The cancellation of the $3.0
million debt owed by Lightbox to SNDL
- $3.3 million payable in common
shares of SNDL (the "Purchase Shares") at a price per share
based on the 10-day VWAP of the SNDL shares on the Closing Date to
be issued to Lightbox
The closing of the transaction is subject to customary closing
conditions, including regulatory approvals. The transaction is
anticipated to close by the end of May
2023 (the "Closing Date"), concurrently with the
previously announced proposed restructuring of Nova Cannabis Inc.
(TSX: NOVC) ("Nova") and SNDL (the "Nova
Restructuring"). The addition of the four Dutch Love stores to
be included in Nova Restructuring is expected to bring Nova's total
store count to 123.
Advisors
McCarthy Tétrault LLP is acting as legal counsel to SNDL.
McMillan LLP is acting as counsel to Lightbox. Ernst &
Young Inc. is acting as the monitor to Lightbox and was represented
by Fasken Martineau DuMoulin LLP.
ABOUT SNDL INC.
SNDL is a public company whose shares are traded on the Nasdaq
under the symbol "SNDL."
SNDL is the largest private-sector liquor and cannabis retailer
in Canada with retail banners that
include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, and
Spiritleaf. SNDL is a licensed cannabis producer and one of the
largest vertically integrated cannabis companies in Canada specializing in low-cost biomass
sourcing, premium indoor cultivation, product innovation, low-cost
manufacturing facilities, and a cannabis brand portfolio that
includes Top Leaf, Contraband, Citizen Stash, Sundial Cannabis,
Palmetto, Bon Jak, Spiritleaf Selects, Versus Cannabis, Value Buds,
Vacay, Grasslands and Superette. SNDL's investment portfolio seeks
to deploy strategic capital through direct and indirect investments
and partnerships throughout the global cannabis industry. For more
information on SNDL, please go to www.sndl.com.
Forward-Looking
Information
This news release includes statements containing certain
"forward-looking information" within the meaning of applicable
securities law ("forward-looking statements"), including, but not
limited to, statements regarding the anticipated closing of the
transaction, SNDL's intentions with respect to the Dutch Love
brand and integration with SNDL, the transaction economics,
compliance with all applicable provincial regulations, operational
goals, demand for the Company's products, the development of the
legal cannabis market, performance of the Company's investments and
the maintenance of production levels, including during the COVID-19
pandemic. Forward-looking statements are frequently characterized
by words such as "plan", "continue", "expect", "project", "intend",
"believe", "anticipate", "estimate", "likely", "outlook",
"forecast", "may", "will", "potential", "proposed" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. These statements are only predictions.
Various assumptions were used in drawing the conclusions or making
the projections contained in the forward-looking statements
throughout this news release. Forward-looking statements are based
on the opinions and estimates of management at the date the
statements are made and are subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. Please see "Item 3D Risk Factors" in
the Company's Annual Report on Form 20-F, which was filed with the
Securities and Exchange Commission ("SEC") on April 28, 2022, and the risk factors included in
our other SEC filings for a discussion of the material risk factors
that could cause actual results to differ materially from the
forward-looking information. The Company is under no obligation and
expressly disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as expressly
required by applicable law.
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SOURCE Sundial Growers Inc.