Leading Cannabis Cultivator, The Green Organic Dutchman Acquires Galaxie Brands Corporation
The Green Organic Dutchman Holdings Ltd. (CSE: TGOD) (US-OTC: TGODF), a leading producer of organically-grown cannabis, has announced that it has completed the acquisition of all of the issued and outstanding shares of Galaxie Brands Corporation.
About The Green Organic Dutchman Holdings Ltd.
The Green Organic Dutchman Holdings Ltd. is a sustainable, global cannabis company focused on innovation, quality, consistency, and integrity. The company uses science and technology in the best possible way to reduce waste and protect the environment.
In Canada, TGOD serves the recreational market with brands like The Green Organic Dutchman, Highly Dutch Organics, Ripple by TGOD, and Cruuzy, and it serves the medical markets in Canada, South Africa, Australia, and Germany.
It grows cannabis organically, using living soil, filtered rainwater, sunlight, and natural fertilizers. Through its European subsidiary, HemPoland, TGOD distributes premium hemp CBD oil and CBD-infused topicals in Europe.
About Galaxie Brands Corporation
Galaxie is a licensed cannabis-producing company focused on new products, branding, and manufacturing of 2.0 products. Its range of products includes cannabis edibles, infused pre-rolls, flavored and full melt vapes, oils, and solventless products. Galaxie also provides manufacturing and product development services to its partners across Canada.
About the Acquisition
Sean Bovingdon, the CEO and interim CFO of TGOD said that it was an exciting day for TGOD’s and Galaxie’s teams as the acquisition allowed TGOD to accelerate domestic growth. He was confident that by incorporating Galaxie’s innovation and operating capabilities, TGOD had been placed in a better position for improving its performance and revenues.
As a result of the acquisition, TGOD’s brand portfolio would widen with the addition of Galaxie’s pre-rolls, vapes, solventless products, and its flagship brand, Cruuzy. The company will also get exposure to the range of cannabis edibles produced at Galaxie’s joint venture in Canada with a major edible brand in the U.S, and it will benefit from its access to better regional distribution channels across Canada.
Galaxie owns a 26,000 sq. ft. production facility in Ontario, licensed by Health Canada and operational with 2.0 production capabilities. Access to this facility will provide TGOD with more area for cultivation, and also better processing, packaging, extraction, and product development capabilities. The acquisition will make Galaxie a wholly-owned subsidiary of TGOD but it will remain the license-holder for its Ontario facility.
Other benefits that will result from the transaction are cost synergies resulting from combining the activities of the two entities in supply and distribution, research, and product development, as well as cost reductions in sales, administrative activities, and general overheads. Galaxie’s U.S. connections and industry relationships are expected to expedite TGOD’s entry into the U.S. market. This will enable TGOD to expand its organic brand platform to the U.S.
Angus Footman, Galaxie CEO & Co-Founder said that he was proud of what Galaxie’s team had built, because, in a short period of time the company had developed and launched more than 45 innovative new SKUs across Canada. He was full of admiration for TGOD’s leadership in sustainability, and its organic cannabis production. He said that he looked forward to jointly developing innovative products that reflected the shared commitments of the two companies to serve the consumers well and build a sustainable global cannabis company.
The transaction is valued approximately at CAD 21 million. As a result of the acquisition, TGOD will accept $1,300,000 of existing shareholder loans of Galaxie, which do not bear interest at least until January 31, 2022.
The vendors of the Galaxie shares are entitled to earn up to CAD 15 million in additional shares of TGOD, subject to the achievement of certain financial milestones by December 31, 2022.
In consideration for Galaxie shares, TGOD has issued 120,000,000 TGOD shares at a price of $0.175 per TGOD share, of which 40,000,000 TGOD Shares have been placed into an indemnity escrow account to be released no later than December 31, 2023, subject to the terms of the escrow release agreement.
The remaining 80,000,000 TGOD shares have been placed into an escrow account, whereby one-sixth of such shares will be released every four months. Besides these, up to an additional 85,714,286 TGOD shares, could be issued to the vendors of the Galaxie shares, subject to the achievement of certain milestones in 2022.