Namaste will widen its reach in the UK by acquiring 100% of the shares of CannMart UK
() (OTCMKTS:NXTTF) announced Friday that it has scrapped its C$5 million plan to acquire UK-based AF Trading Ltd and signed a new letter of intent paving the way for its subsidiary Namaste Bahamas to widen its reach in the UK by acquiring 100% of the shares of CannMart UK.
Under the deal’s terms, Namaste Bahamas will acquire CannMart UK for C$1.5 million, comprised of C$500,000 in cash and C$1 million in shares of Namaste.
The move comes as Namaste Bahamas pulled out of its original move to acquire AF Trading Ltd, which operates as Access Fulfillment, for C$5 million. It was originally intended that Access Fulfillment would operate as Namaste’s distribution center for CBD or cannabidiol as well as cannabis products in the UK.
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Instead, Namaste Bahamas will acquire 100% of the shares in CannMart UK, a subsidiary formed by the principal shareholders of Access Fulfillment.
“As part of our 2019 strategy to re-prioritize our capital investments, we were able to successfully reduce the overall acquisition price of the Access Fulfillment transaction and acquire the net assets we see as adding the most value to Namaste,” said Sean Dollinger, Namaste CEO in a statement. “The UK market represents a significant growth opportunity and this acquisition remains an integral part of this growth.”
After the deal closes, CannMart UK will retain principal shareholders of Access Fulfillment to provide consulting services over a two year period. This C$2 million arrangement will involve a cash payment of C$500,000 and C$1.5 million in shares of stock of Namaste.
The acquisition of CannMart UK is still subject to the approval of the Toronto Venture Exchange.
On top of the medical cannabis, Namaste sells via its medical cannabis subsidiary CannMart, Namaste’s product offerings through its subsidiaries include vaporizers, CBD products, glassware and other cannabis-related accessories.
The Vancouver-based company also runs NamasteMD, an online patient portal, and has developed Canada’s first cannabis telemedicine app for smartphones, which allow patients to connect to doctors or nurse practitioners for consultations on cannabis.
Namaste shares slipped 2.8% to finish at C$1.37 in Toronto on Thursday. In New York, its shares fell 1.87% to hit US$1.05 on Thursday.
Contact Ellen Kelleher at [email protected]