MPX International Moves Ahead with Australia Deal
The company will add to its international portfolio by buying the rest of its Australian partner for C$4 million worth of shares.
A Canadian cannabis company with an international focus has fully acquired its Australian division in an all-share deal.
On Tuesday (July 23), MPX International (CSE:MPXI,OTC Pink:MPXOF) announced the purchase the remaining stake in MPX Australia it does not already own for C$4 million worth of shares.
The deal will cost MPX just over 7 million common shares. These shares will be granted in three separate blocks based on achieved milestones by the Australian division.
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According to MPX, the full payment of shares will be staggered based on material achievements completed by MPX Australia, including the issuance of a cannabis license, the completion of its Launceston facility and a successful first harvest.
Scott Boyes, chairman, president and CEO of MPX, said in a press release that the company will now run operations in seven international markets: Canada, Australia, South Africa, Malta, Switzerland, England and Israel, where it will be part of a joint venture.
The executive added that this acquisition will be the basis for MPX to serve the Asian cannabis markets.
The Australian division of MPX is currently pursuing a medical cannabis license from the Australian Office of Drug Control to operate a facility to be built in Tasmania.
A projection from an analyst earlier this year indicates the Australian medical cannabis market will generate revenues of AU$36 million by the end of 2019.
The research, put together by Matthijs Smith, an analyst with Canaccord Genuity’s (TSX:CF) division in Australia, also projects that 11,600 new patients will be registered for medical cannabis use in 2019. “Our back-of-the-envelope calculations suggest that up to 500,000 Australians may benefit from using cannabis products for medical purposes,” he said.
Shares of MPX closed at a price of C$0.42, representing a decline of 1.17 percent, during Tuesday’s trading session. As of Wednesday’s (July 24) opening bell, the decline in value continued as the company took a loss of 1.19 percent.
MPX was formed after its predecessor, MPX Bioceutical, merged with iAnthus Capital Holdings (CSE:IAN,OTCQX:ITHUF). The merger was designed to apply only to MPX’s US-based cannabis assets.
At the time, the all-stock merger between the US division of the company and iAnthus allowed MPX to begin exploring business operations at the international stage.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
