Ayr Wellness Inc C.AYR.A

AYR: DEF AGRMNT TO ACQUIRE GARDEN STATE DISPENSARY IN NJ/US

[Humanist]

Ayr Wellness Moves to Definitive Agreement to Acquire Garden State Dispensary (New Jersey)
 
by @nasdaq on 29 Mar 2021, 08:30
   
TORONTO, March 29, 2021 (GLOBE NEWSWIRE) -- Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF) (“Ayr,” “Ayr Wellness,” “we,” “us,” “our,” or the “Company”), a vertically-integrated cannabis multi-state operator (MSO), has entered into a Definitive Agreement (the “Purchase Agreement”) with GSD NJ, LLC, a licensed operator in New Jersey doing business as Garden State Dispensary (“GSD”), following the Letter of Intent previously announced on December 22, 2020.

Pursuant to the Purchase Agreement, Ayr will purchase 100% of the equity interests of GSD, one of the 12 existing vertical license holders in the State of New Jersey and one of the state’s original six alternative treatment centers (ATCs). GSD has three open dispensaries, the largest retail footprint of any operator, at heavily trafficked highway locations throughout the central region of the state, as well as a 30,000 sq. ft. facility that houses the existing cultivation and production facilities in operation. An additional 75,000 sq. ft. is currently under construction. GSD currently employs 110 people, all of whom are expected to be retained by Ayr.

“With its recent adoption of adult-use, New Jersey will be a leading force in the Northeast cannabis market. We look forward to serving the Garden State’s medical cannabis patients and working with the regulators to ensure a safe and robust roll-out of the adult-use program. We see an incredible opportunity to drive growth at retail with the introduction of our quality cannabis brands, expanded product offerings and exceptional in-store experience. Additionally, we see an excellent opportunity for wholesale growth given our planned cultivation expansion and past success at driving wholesale penetration in supply-constrained markets,” said Jonathan Sandelman, Chairman and Chief Executive Officer of Ayr.

Total consideration pursuant to the Purchase Agreement of $101 million includes $41 million in cash, $30 million in stock and $30 million in the form of promissory notes. Earnout payments pursuant to the Purchase Agreement, based on exceeding certain target revenue thresholds following closing, will be capped at a maximum of $96.75 million and payable in a combination of cash, promissory notes and exchangeable shares. Including the maximum earnout consideration, the Company estimates this represents a forward multiple of approximately 4x 2022 adjusted EBITDA.

The acquisition is subject to customary closing conditions and regulatory approvals.

The transaction is expected to close in the third quarter of 2021.