TORONTO – December 15, 2022 – PRESS RELEASE – RIV Capital Inc., an acquisition and investment firm with a focus on building a leading multistate platform with one of the strongest portfolios of brands in key strategic U.S. markets, today announced that it has completed the final closing of its previously announced transaction involving Etain, LLC–owner and operator of a legally-licensed Registered Organization with cannabis cultivation and manufacturing facilities, and retail dispensaries in the state of New York–and Etain IP LLC.

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“With four dispensaries, including a Manhattan flagship store and locations in Kingston, Syracuse and Westchester, as well as a cultivation and production facility in Chestertown, we believe Etain is a strong foundation and a scalable platform for future growth,” said Mark Sims, president and CEO of RIV Capital. “We plan to continue Etain’s collaboration with diverse New York-owned brands, optimize Etain’s attractive retail footprint, and augment Etain’s four premium product lines with high-performing west coast brands. The ongoing expansion of Etain’s Chestertown cultivation facility, which is nearing completion, and our planned flagship indoor cultivation facility in Buffalo, will enable Etain to better serve medical patients and, eventually, adult-use consumers in New York.”

Final Closing Transaction Details

Under the terms of the transaction, RIV Capital paid the remaining purchase price through a combination of approximately US$42 million in cash and the issuance of 5,273,084 Class A common shares in RIV Capital. Following the final closing, the former owners of Etain hold approximately 16% of the issued and outstanding Class A common shares of RIV Capital.

Growth and Expansion Strategy

RIV Capital’s long-term strategy is to build a leading multi-state operating and brand platform, with New York serving as the foundation. The company intends to develop and expand new brands and products designed to resonate with the New York consumer, with plans to offer as one of its core brands Etain’s popular product line, which will include new form factors and SKUs in the near future.

The expansion of Etain’s Chestertown-based cultivation and production infrastructure, which the company anticipates will be completed by second quarter of calendar year 2023, is designed to increase cultivation capacity and support the development of new product formats in anticipation of the launch of adult-use sales in New York. RIV Capital is also in the process of developing a new, state-of-the-art flagship indoor cultivation facility in Buffalo, designed with premier cultivation and production infrastructure specifically tailored to support the premium New York market.

Early Warning Reporting Disclosure

BrandCo HoldCo, LLC announced today, pursuant to applicable requirements of Canadian securities laws, that it has acquired 5,273,084 Class A common shares pursuant to the final closing of the Etain transaction.  That number of shares was determined not based on the price on the date of issuance but based on the five-day volume-weighted average price of such shares on the Canadian Securities Exchange as of the last trading day prior to the initial announcement of the transaction (March 30, 2022), which was C$1.65 per share and C$8.7 million in the aggregate. The shares issued represents approximately 3% of the issued and outstanding Class A shares of RIV Capital. Prior to the acquisition, HoldCo owned 21,092,335 Class A common shares representing approximately 13% of the issued and outstanding shares of the company.

HoldCo completed the acquisition for investment purposes. Subject to applicable laws and the terms of the Investor Rights Agreement entered into by Holdco and the company, HoldCo may acquire additional securities of RIV Capital or may dispose of any or all of its holdings of Class A common shares, from time to time through, among other things, transactions on the open market or in private transactions or otherwise, on such terms and at such times as HoldCo may deem advisable depending upon an ongoing evaluation of the Class A common shares, the company, prevailing market conditions, the availability of Class A common shares at prices that would make the purchase or sale of shares desirable, other investment opportunities, liquidity requirements of HoldCo, respectively, and/or other considerations and in such manner as it deems appropriate.

A copy of the early warning report filed by HoldCo in connection with the above will be filed on SEDAR and made available under RIV Capital’s profile on SEDAR at www.sedar.com.

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