Two medicinal cannabis companies have entered into a merger agreement today in a deal worth around $85 million, giving Queensland-based CDA Health control over the Australian subsidiary of Canadian giant Cronos Group (NASDAQ: CRON). Says Business News Australia
The deal, between ASX-listed Cronos Australia (ASX: CAU) and CDA Health, will comprise a combination of shares and cash, with CDA shareholders to own approximately 73.7 per cent of CAU on completion of the merger.
It comes nearly two years after CAU listed on the ASX following a $20 million IPO, at the time giving the company a market capitalisation of $64.4 million.
In the years since, shares in CAU dropped significantly from its $0.36 per share debut and were trading at $0.10 yesterday, representing a market capitalisation of just $4.87 million.
Since releasing the announcement this morning, CAU has added around $1 million to its market capitalisation as shareholders flocked to the small-cap, sending its share price up 19.05 per cent at the time of writing to $0.12 per share.
Founded in 2018 by Guy Headley, Dr Ben Jansen, Jessimine Jansen and Dr Matua Jansen, CDA has seen rapid growth over the last two financial years, generating more than $21 million in sales for FY21 and is profitable.