Auxly Cannabis Group (TSXV:XLY) announced an agreement to acquire all shares of KGK Science for a consideration worth C$12.3 million payable in cash and common shares of the company.
As quoted in the press release:
KGK is a leading health and wellness focused private contract research organization based in London, Ontario, and the Company expects to leverage KGK’s expertise and research abilities to further the Company’s product development efforts through collaboration with the Company’s wholly owned subsidiary, Dosecann Inc. (“Dosecann”).
Pursuant to the Share Purchase Agreement, the Company will acquire all of the issued and outstanding shares of KGK (the “Acquisition”). Upon the completion of the Acquisition, KGK will become a wholly-owned subsidiary of the Company. As consideration for the KGK Shares, the shareholders of KGK (the “KGK Shareholders“) are entitled to receive 4,132,231 common shares in the capital of the Company (“Common Shares“) priced at $1.21 per Common Share, with the remainder of the purchase price to be paid in cash.
Hugo Alves, President of Auxly commented, “The addition of KGK to the Auxly platform adds a significant amount of depth to the company’s knowledge base and abilities in the creation of value added cannabis products backed by research and science. We believe KGK’s track record of success as a leading health and wellness focused contract research organization in North America is a testament to their ability to add a significant amount of value to Auxly’s midstream business segment. We look forward to working with the team at KGK and beginning observational and clinical studies and other research initiatives to support our product development efforts and medical supply channel execution.”