News Releases

MMJ to list Canadian subsidiaries

By: Fraser Beattie

Posted: 14.:12, Sept 28 2016

MMJ Phytotech has announced plans to spin-out its medical cannabis-focused Canadian subsidiaries onto the TSX Venture Exchange though the reverse takeover of a resource company.

Nedlands –based MMJ, which listed on the ASX last year after completing a reverse takeover of Canada-based firm MMJ Bioscience, will spin-out its United Greeneries Holdings and Satipharm subsidiaries and pay $C40 million ($A39.4 million) in cash and shares to wholly acquire TSX-V listed company Top Strike Resources.

The sale price represents about 97 per cent of MMJ’s current market capitalization based on a share price of 24 cents.

MMJ will pay $C2.5 million in cash and $c37.5 million in shares to acquire Top Strike, which will then become a pure play cannabis company after adopting  UGH and Satipharm’s business models.

Top Strike will also undertake $C15 million equity raising as part of the transaction.

If the deal is successful, Top Strike’s management team will consist of representatives from MMJ and UGH.

“The transaction provides MMJ shareholders with the opportunity to benefit from the significant value currently being realized by TSX-V listed cannabis producers such as Aphria, Canopy and Aurora,” MMJ managing director Andreas Gedeon said.

“The board has been assessing the merits of obtaining a public listing in Canada for some time, and Top Strike represents a compelling and timely opportunity.

“MMJ shareholders will continue to benefit post-transaction, from indirect exposure to the rapidly expanding Canadian cannabis market, and near-term revenues generated from increased Satipharm sales through key regulated markets globally.

“We are very confident that our strategic market positioning and our capacity to rapidly scale up cannabis production at Duncan will be a major value catalyst for MMJ’s shareholders in the near-term.”

Canada-based Black Spruce Merchant Capital acted as a lead manager to MMJ on the deal.

Shares in MMJ were 8.6 per cent higher to 25 cent each at the close of trade.

Click here to view original article

Posted in: News & Updates

Leave a Comment: (0) →

Leave a Comment

You must be logged in to post a comment.