Akerna Corp. (Nasdaq: KERN), a leading cannabis compliance
technology provider, and developer of the industry’s first
seed-to-sale enterprise resource planning (ERP) software technology
(MJ Platform®), has entered into a definitive agreement to acquire
all of the issued and outstanding shares of Canadian-based Ample
Organics Inc. in a cash and stock transaction valued at up to $45
million (C$60 million).
Ample Organics serves over 70% of the Canadian market with its
industry-leading seed-to-sale platform and was recognized as the
19th fastest growing company in Canada by The Globe and Mail in
2019. Just last month, Ample Organics was selected to deliver
the world’s first national cannabis tracking platform in St.
Vincent and The Grenadines in 2020. The contract win, which
was a competitive RFP process, is a testament to Ample Organics’
competitive position in Canada, the largest national market
today. We anticipate that the award will drive accelerated
growth as international markets continue to pass legislation to
legalize cannabis.
“The cannabis economy runs on Akerna. Our acquisition of Ample
Organics solidifies our position as the global technology provider
serving the industry,” said Jessica Billingsley, chief executive
officer, Akerna. “This combination will provide Akerna with a
significant advantage as we accelerate on our vision to create the
pre-eminent global technology platform, addressing the entire
supply chain and its regulatory bodies through accountability and
transparency.”
With this acquisition, Akerna is further executing on its
business strategy of complementing strong organic growth with
select acquisitions of highly targeted and synergistic technology
companies.
“As a company, we’ve grown by working closely with world-class
technology companies, regulators, start-ups, consultants, and
banking institutions to create a seamless business experience for
the global cannabis industry,” said John X. Prentice, founder, and
chief executive officer, Ample Organics. “We believe this
transaction will result in tremendous synergies and opportunities
for both Ample Organics and Akerna. We look forward to the many
accomplishments and successes that we expect to share in the
future.”
Terms of the Transaction
Akerna is acquiring Ample Organics for up to $45 million (C$60
million), comprised of $5.7 million (C$7.5 million) cash and $32.3
million (C$42.5 million) in Akerna stock payable on closing.
Additional consideration of $7.6M (C$10 million) in the form of a
stock-based deferred consideration may be paid to Ample Organics
shareholders if certain revenue targets are achieved by Ample
Organics in the calendar year 2020.
Projected calendar-year 2020 revenue for Ample Organics is $8.7
million (C$11.5 million), reaching projected cash-flow positive in
the second quarter. The acquisition multiple on 2020 revenue
is 5.2x, assuming the deferred consideration is achieved in
full.
The Transaction is expected to close by the end of Q1 2020,
subject to the satisfaction of customary closing conditions,
including receipt of customary regulatory approvals and approval by
the shareholders of each company. Cowen has provided a fairness
opinion dated Dec. 17, 2019, to the Board of Directors of
Akerna stating that as of the date of such opinion and based upon
and subject to the assumptions, limitations, and qualifications
stated in such opinion, the Transaction is fair, from a financial
point of view, to Akerna and its shareholders. Each of the
officers and directors of Akerna has entered into voting support
agreements in favor of the transaction.
Cowen is acting as exclusive financial advisor to Akerna, and
INFOR Financial Inc. is acting as exclusive financial advisor to
Ample Organics.
All numbers are based on currency exchange rates as of Dec. 17,
2019.
Call for Investors:
The Company will host a conference call on Tuesday, Jan. 7,
2019, at 4:30 pm ET / 1:30 pm PT. To participate in the conference
call, please dial 1-877-407-3982 (domestic) or 1-201-493-6780
(international). The passcode is 13697598. Please dial into the
call at least five minutes before the scheduled start time.
The conference call will also be available via a live
listen-only webcast and can be accessed through the Investor
Relations section of Akerna’s website, www.akerna.com. For
interested individuals unable to join the live conference call, a
replay of the call will be available through Tuesday, Jan. 21,
2020, at (844) 512-2921 (domestic) or (412) 317-6671
(international). The passcode for the call and replay is
13697598.
About Akerna
Akerna is a global regulatory compliance technology company in
the cannabis space. Akerna’s service offerings include MJ
Platform®, Leaf Data Systems®, and solo sciences tech platform.
Since its establishment in 2010, Akerna has tracked more than $17
billion in cannabis sales. As part of its business strategy, Akerna
intends to grow through targeted, strategic acquisitions that are
complementary to its current business and organically by
accelerating its product development efforts. Akerna is based in
Denver. For more information, please visit www.akerna.com and
follow us on Twitter @Akerna.
About Ample Organics
Founded in 2014, Ample Organics is adopted by more Canadian
Licensed Holders than any other cannabis software solution. A
complete ecosystem for cannabis businesses, the technology platform
makes compliance easy by tracking individual plants from seed to
consumer and reporting every detail of the growth, production, and
sales processes. Ample’s team of cannabis industry and technology
experts designed the platform to facilitate compliance and
transparency while enhancing overall business efficiency and
operational intelligence. The software continues to be a trusted
solution for cannabis producers, manufacturers, distributors,
physicians, clinics, laboratories, retailers, and educators. Ample
Organics was recognized as one of LinkedIn Canada’s Top Startups in
2018 and 2019 and placed 9th on Deloitte Canada’s Technology FAST
50. For more information, please visit www.AmpleOrganics.com.
Forward-Looking Statements:
Certain statements made in this release and any accompanying
statements by management are “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. When used in this
press release, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,”
“seeks,” “may,” “will,” “should,” “future,” “propose” and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements are
not guarantees of future performance, conditions or results, and
involve a number of significant known and unknown risks,
uncertainties, assumptions and other important factors, many of
which are outside Akerna’s control, that could cause actual results
or outcomes (including, without limitation, the results of Akerna’s
contracts, strategic initiatives, and business plans as described
herein) to differ materially from those discussed in the
forward-looking statements. Important factors, among others, that
may affect actual results or outcomes include (i) Akerna’s ability
to recognize the anticipated benefits of being a public company,
(ii) competition, (iii) Akerna’s ability to grow and manage growth
profitably, (iv) Akerna’s ability to maintain relationships with
customers and suppliers and retain its management and key
employees, (v) costs related to being a public company, (vi)
changes in applicable laws or regulations, (vii) Akerna’s ability
to identify and integrate acquisitions and achieve expected
synergies and operating efficiencies in connection with acquired
businesses, (viii) and other risks and uncertainties disclosed from
time to time in Akerna’s filings with the U.S. Securities and
Exchange Commission, including those under “Risk Factors” therein.
Actual results, performance, or achievements may differ materially,
and potentially adversely, from any projections and forward-looking
statements and the assumptions on which those vary from
forward-looking statements are based. There can be no assurance
that the data contained herein is reflective of future performance
to any degree. You are cautioned not to place undue reliance on
forward-looking statements as a predictor of future performance as
projected financial and other information, are based on estimates
and assumptions that are inherently subject to various significant
risks, uncertainties and other factors, many of which are beyond
Akerna’s control. All information herein speaks only as of the date
hereof, in the case of information about Akerna, or the date of
such information, in the case of information from persons other
than Akerna. Akerna undertakes no duty to update or revise the
information contained herein. Forecasts and estimates regarding
Akerna’s industry and end markets are based on sources believed to
be reliable; however, there can be no assurance these forecasts and
estimates will prove accurate in whole or in part.
Contacts:
Akerna Media Relations |
Akerna Investor Relations |
D. Nikki Wheeler |
Jason Assad |
Nikki.Wheeler@Akerna.com |
Jassad@akerna.com |
303-514-2012 |
678-570-6791 |
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