TORONTO, Nov. 18, 2021 /CNW/ – PRESS RELEASE – The Green Organic Dutchman Holdings Ltd., a producer of premium certified organically grown cannabis, has announced that further to its news release dated Nov. 1, 2021, it has completed the acquisition of all of the issued and outstanding shares of Galaxie Brands Corporation.

“This is an exciting day for both TGOD’s and Galaxie’s teams. As per our strategic plan, the completion of the transaction allows TGOD to accelerate domestic growth. With Galaxie’s innovation and operating capabilities, scale and efficiencies, the combined entity will build stronger revenues and financial performance,” said Sean Bovingdon, CEO and interim CFO of TGOD.

Following closing of the transaction, TGOD will diversify its brand portfolio with the addition of Galaxie’s unique pre-rolls, vapes, solventless products and its  flagship brand, Cruuzy. TGOD will also benefit from improved regional distribution across Canada and gain further exposure to the valuable edible category through Galaxie’s exclusive joint venture in Canada with a major edible brand in the United States. 

Galaxie’s 26,000-square-foot Ontario production facility is fully licensed by Health Canada and operational with 2.0 production capabilities. The Galaxie facility is expected to provide TGOD with additional cultivation, value added processing, packaging, extraction and product development capabilities. Galaxie will become a wholly-owned subsidiary of TGOD and will remain the license holder for the Galaxie Facility. 

The transaction is expected to achieve cost synergies through combining activities in supply chain and distribution, research and product development, as well as cost reductions in sales, general and administrative activities, and general overhead. Galaxie’s strategic U.S. connections and existing industry relationships are expected to accelerate TGOD’s entry into the U.S. market, with the growing TGOD organic brand platform being positioned for future expansion across the border.

“I am proud of what we have built at Galaxie” said Angus Footman, Galaxie CEO and co-founder, and chairman of the company. “In a short period of time, we have successfully developed and launched over 45 innovative new SKUs across Canada. We admire TGOD’s leadership in sustainability, organic and quality cannabis production and look forward to jointly developing new innovative products that reflect our shared commitments to serving our consumers and building a sustainable global cannabis company.”

Transaction Details:

The initial share consideration values the transaction at approximately CAD $21 million. As part of the transaction, the company will assume $1,300,000 of existing shareholder loans of Galaxie, which are non-interest bearing until at least Jan. 31, 2022. The vendors of the Galaxie shares are also entitled to earn up to CAD $15 million in additional shares of TGOD, subject to achievement of certain financial milestones by Dec. 31, 2022.

In consideration for Galaxie shares, TGOD has issued 120,000,000 TGOD shares at a price of $0.175 per TGOD Share, of which 40,000,000 TGOD Shares have been placed into an indemnity escrow account to be released no later than Dec. 31, 2023, subject to the escrow release terms of an indemnity escrow agreement, and the remaining 80,000,000 TGOD Shares have been placed into an escrow account, whereby one sixth of such shares will be released every four months. In addition, there is an earn-out provision, whereby up to an additional 85,714,286 TGOD Shares, could be issued the vendors, subject to the achievement of certain milestones in 2022.

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