Canadian cannabis and alcohol company SNDL won its stalking-horse bid to acquire Indiva, the country’s leading producer of marijuana edibles.
The acquisition includes Indiva’s facility in London, Ontario, as well as its portfolio of owned and licensed edibles products Pearls by Grön, No Future, Wana Brands and Bhang Chocolate, according to a Thursday news release.
“This transaction will materially improve our market share in the edibles category and is expected to unlock value through improved capacity utilization, a reduction in aggregate corporate expenses and the potential sale of redundant real estate holdings,” Zach George, SNDL’s chief executive officer, said in a statement.
Calgary, Alberta-based SNDL was an existing creditor and significant stakeholder before the acquisition was announced.
The deal, which must be approved by the Ontario Superior Court of Justice, is expected to close during SNDL’s fourth quarter.
Indiva, headquartered in London, hired SSC Advisors in April to help determine the best way to maximize shareholder value.
The move came after Indiva released its consolidated interim financial statements for the quarter ended Sept. 30, 2023, and warned of material uncertainties “that may cast significant doubt on the ability to continue as a going concern.”
At the time, Indiva said it incurred losses, including accumulated deficits of 71.6 million Canadian dollars ($52.8 million) and negative working capital of CA$2.2 million.
The Indiva deal is the second acquisition announced by SNDL in August.
The company on Aug. 13 it would buy the remaining shares of Alberta-based Nova Cannabis for roughly CA$40 million.
In July, after acquiring a debt position in Delta 9 Cannabis, SNDL enacted a restructuring plan aimed at reducing corporate expenses and improving efficiencies.
The company said it would eliminate 106 jobs as part of the cost-cutting measures that are expected to generate more than $20 million in annual savings.
Shares of SNDL trade on the Nasdaq.
