- HempFusion Wellness closed the acquisition of Sagely Naturals, a women-centric CBD company, for an initial consideration of US$25 million in cash and stock payments
- The acquisition is expected to benefit both parties in various ways, including by increasing HempFusion’s revenue and providing access to Sagely’s extensive distribution footprint
- On its part, Sagely will benefit from HempFusion’s regulatory compliance, which will help in the introduction of ingestible CBD products
- HempFusion is looking forward to driving shareholder value through continued growth both domestically and internationally with its expanding family of brands
In fulfillment of a merger agreement announced in late May, Denver-based leading health and wellness company HempFusion Wellness (TSX: CBD.U) (OTCQX: CBDHF) (FWB: 800)
completed the acquisition of premier women-centric CBD brand Sagely Enterprises Inc. (“Sagely Naturals
”) on July 7 (https://cnw.fm/86bVZ
). The purchase, which made Sagely Naturals a wholly owned subsidiary of HempFusion Wellness, is expected to benefit both parties.
Boasting an extensive retail distribution footprint of 14,000+ stores in the United States, Sagely Naturals is the third most successful brand, leading CBD topicals brand, and largest women-founded CBD company in the industry. This market position is reflected in its financials for the fiscal year 2020, in which it reported net revenue of over $4.19 million.
The now wholly owned subsidiary provides HempFusion with immediate distribution to up to 14,000 additional stores as well as a significant increase in revenue. In fact, when combined with the closing of APCNA Holdings LLC’s (“Apothecanna”) purchase agreement, announced May 17, HempFusion’s 2020 revenue will more than triple. Both acquisitions further offer the opportunity to expand this revenue well into the future.
In an interview with Proactive (https://cnw.fm/SZCRE
), HempFusion CEO Jason Mitchell, N.D., noted that while Sagely Naturals does not offer ingestible CBD products at the moment, HempFusion’s focus on being regulatorily compliant will allow it to install a completely new ingestible program for them. This will provide an opportunity to introduce ingestible CBD products in up to 14,000 stores. “So, we are going to give them near-immediate expansion into new products they haven’t had previously,” said Mitchell.
HempFusion’s significant investment into regulatory compliance will help solidify Sagely Natural’s leadership position in the CBD industry. HempFusion has also included Sagely Naturals on its Novel Foods Application Dossier with the United Kingdom’s Regulatory Food Safety Agency to aid in future expansion into Europe.
Additionally, as both companies have complementary product offerings that do not directly compete, the acquisition offers substantial cross-platform opportunities through each of their respective distribution channels.
“Integration has been well underway over the past several weeks, and we look forward to driving shareholder value through continued growth in 2021 and 2022 both domestically and internationally with our expanding family of brands,” stated Mitchell in a press release.
HempFusion closed the acquisition for an initial consideration of US$25 million, of which $2 million was paid in cash (subject to adjustment for Sagely Naturals’ cash and working capital), and the balance was satisfied by the issuance of more than 22.5 million common HempFusion shares. You can find a comprehensive description of the terms of the acquisition in the press release.
In the Proactive
interview, Mitchell held that M&A remains a vital part of the company’s future. Thus, the recent acquisition of Sagely Naturals “is certainly not going to be our last.”
For more information, visit the company’s website at www.HempFusion.com/corporate-information
NOTE TO INVESTORS:
The latest news and updates relating to HempFusion are available in the company’s newsroom at https://cnw.fm/CBDHF
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