VANCOUVER, BC, July 13, 2021 /CNW/ - Kiaro Holdings Corp.
(TSXV: KO) ("Kiaro" or the "Company"), a national omni-channel
cannabis retailer and wholesale distributor, is pleased to
announce that the Company has entered into a definitive agreement
with Aegis Brands Inc. ("Aegis") to acquire all the issued and
outstanding shares of its subsidiary, 2734524 Ontario Inc. (dba
Hemisphere Cannabis Co, "Hemisphere"), which currently operates 7
excellent retail locations in Ontario (the "Existing Locations") and two
more locations in development (the "Transaction"). Completion of
the Transaction will more than double Kiaro's retail footprint and
give it a significant presence in the Ontario retail cannabis market.
The total initial purchase price in connection with the
Transaction will be settled by the issuance of 61,300,000 common
shares of Kiaro ("Kiaro Shares") and warrants of Kiaro (the "Kiaro
Warrants") to acquire up to additional 6,700,000 Kiaro Shares,
subject to customary adjustments. Aegis shall also be
entitled to receive a further 6,700,000 Kiaro Shares on achievement
of certain commercial milestones within the first year following
closing.
KEY TRANSACTION HIGHLIGHTS INCLUDES NEW EXPECTED REVENUE RUN
RATE OF $42.7 MILLION
- Substantial increase in Kiaro's retail network: The
Transaction provides Kiaro with new revenue from 7 open and
operational stores with 2 more Retail Store Authorizations in
process. As a result, we expect Kiaro's annual run rate revenue to
increase to $42.7M with a gross
margin of $13.7M immediately
following closing.
- Amplifies Kiaro's strategic entry into Ontario: With multiple locations in
diverse municipalities in Ontario,
the Transaction will allow Kiaro to establish a significant
presence in the Ontario cannabis
retail market.
- Executes on the plan of revenue and EBITDA growth through
acquisition: The portfolio adds to Kiaro's cash generating
assets while providing expected additional high margin revenue
streams.
In connection with the Transaction, Kiaro is excited to announce
that Jenn Juby, Vice President of
Retail at Hemisphere, will join the Kiaro team in the same
capacity. Ms. Juby will contribute to the integration of the new
stores into the Company and will use her expertise to continue the
implementation of Kiaro's retail experience.
Daniel Petrov, Chief Executive
Officer of Kiaro stated, "The acquisition of Hemisphere is simply
transformational. I expect this transaction will be significantly
accretive for shareholders as we push forward towards $50M in target revenue. It brings up to 18 stores
into operation by the end of the fiscal year and cements a
strategic partnership with retail industry titans at Aegis Brands.
Their team has assembled a superior Ontario portfolio of well-positioned brick and
mortar locations, supporting our objective of exponential revenue
and EBITDA growth."
"The retail cannabis space is changing rapidly in Canada. We recognize the need for scale and
focus to ensure success in this sector. As such we are
thrilled to forge a partnership with Kiaro to build a cannabis
retailer with a prominent nationwide presence and a clear path to
$50 million in annual revenue," said
Steven Pelton, President and CEO of
Aegis Brands. "The strategic alignment between two likeminded
Canadian brands will serve to elevate the customer experience,
while bolstering growth and profitability in the combined company,"
said Pelton.
Transaction Details
The Transaction is subject to applicable regulatory approvals
including, but not limited to, the Alcohol and Gaming Commission of
Ontario and TSX Venture Exchange
approval and the satisfaction of certain other closing conditions
customary in transactions of this nature.
It is anticipated that, subject to receipt of all regulatory and
other applicable approvals, the Transaction is expected to complete
in September 2021.
This press release is available on the Kiaro Verified Forum On
AGORACOM for shareholder discussion and management engagement
Kiaro Holdings Corp.
Based in Vancouver, British
Columbia, Kiaro is an independent, omni-channel cannabis
retailer and distributor. Through existing storefronts across
British Columbia, Saskatchewan and Ontario, a wholesale distribution division
servicing Saskatchewan, ecommerce
sites in Canada, the US and
Australia, and plans for continued
national expansion, Kiaro is driven to introduce new and
experienced consumers to a lifelong exploration of cannabis. With
more than 50 years of collective retail-focused experience, Kiaro's
leadership team has a proven track record of growing retail brands
across North America and plans to
open multiple retail locations nationwide over the coming
years.
Aegis Brands Inc.
Aegis Brands Inc. owns and operates
a portfolio of brands currently consisting of Bridgehead and
Hemisphere Cannabis Co. For more information, please visit
www.aegisbrands.ca or find the Company on Facebook and Twitter.
Erin Richards, (416) 627-5728,
erin@hypepr.ca
Forward-Looking Information
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of Kiaro, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. In this news release, forward-looking statements
relate, among other things, to: completion of the Transaction and
regulatory and other applicable approvals, proposed retail
expansion plans and management's ability to execute on same,
overall growth of the Canadian cannabis market and retail
opportunities, the integration and financial projections of
combined retail portfolio, the award of new operating permits and
licenses in various jurisdictions, and the timing and amount of any
dispositions of the Company's common shares. Forward-looking
statements should not be read as guarantees of future performance
or results, and will not necessarily be accurate indications of
whether, or the times at or by which, such future performance will
be achieved. No assurance can be given that any events anticipated
by the forward-looking information will transpire or occur.
Forward-looking information is based on information available at
the time and/or management's good-faith belief with respect to
future events and are subject to known or unknown risks,
uncertainties, assumptions and other unpredictable factors, many of
which are beyond Kiaro's control. These risks, uncertainties and
assumptions include, but are not limited to, those described in the
Kiaro Filing Statement dated September 29,
2020, a copy of which is available on SEDAR at
www.sedar.com, and could cause actual events or results to differ
materially from those projected in any forward-looking statements.
Furthermore, any forward looking information with respect to future
expansion plans is subject to the qualification that management of
Kiaro may decide, and the assumptions that any construction or
conversion would not be cost prohibitive, required permits will be
obtained and the labour, materials and equipment necessary to
complete such construction or conversion will be available.
Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this news
release. Kiaro does not intend, nor undertake any obligation, to
update or revise any forward-looking information contained in this
news release to reflect subsequent information, events or
circumstances or otherwise, except if required by applicable
laws.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
For more information, visit: investors.kiaro.com
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SOURCE Kiaro Holdings Corp.