NORTHERN Leaf has agreed a £3.7 million merger with Scottish CBD firm Voyager in a move that the Jersey-based medicinal cannabis producer hopes will ensure its “survival”.
The merger represents a crucial deal for the company, which previously warned shareholders that – if the merger was not completed in a timely manner – its board of directors would have had “no choice but consider ceasing to trade with immediate effect”.
In documents sent to shareholders seeking their consent for the merger and seen by the JEP, Northern Leaf said this was because there would have been “no realistic prospect of avoiding a heavily insolvent liquidation”.
The company, which is now valued at £3.7m, has invested £30m building a 100,000sq-ft cultivation and processing facility, according to reports last year.
Late last year, the company sought to float independently on the London Stock Exchange with an initial public offering (IPO), but failed to secure sufficient interest. The merger is, in effect, a plan-B route to a stockmarket listing.
At that time, the company was understood to have valued itself at around £40 million.
Northern Leaf chairman Frank Walker previously stated that the company had contended with “a challenging time”.
The merger is expected to see ownership of the enlarged group comprise existing Voyager shareholders (20.8%), Northern Leaf shareholders (51.5%) and new investors (27.7%).
In a statement released yesterday, Mr Walker said: “After a tremendous amount of hard work behind the scenes by the management team, I am very pleased that, subject to formal endorsement from shareholders, we are now able to commence the merger fundraising process to secure the funding necessary to ensure Northern Leaf’s survival and the opportunity to develop the potential of the business.”
The company’s chief executive, Geoff Eyre, added: “This merger with Voyager will deliver on our long-standing commitment to bring Northern Leaf onto the listed markets and provide liquidity for our shareholders.”
He continued: “We have been impressed with the breadth of Voyager’s operations and the integration of the two businesses provides numerous opportunities for each of us to accelerate our development. Frank and I are looking forward to joining the Voyager board and taking the enlarged group to a position of market leadership of the cannabis industry within the British Isles.”
