Graphene 3D Lab Up 21.65 Percent on Acquisition News

Graphene 3D Lab‘s (TSXV:GGG,OTCQB:GPHBF) share price ended Thursday up an impressive 21.65 percent, at $0.59, after the company announced that it’s entered into a non-arm’s length share exchange agreement to acquire Graphene Laboratories. 
According to a press release, the agreement will see Graphene 3D Lab acquire all of Graphene Laboratories’ issued and outstanding shares by issuing up to 3.8 million Graphene 3D Lab shares to Graphene Laboratories shareholders.
At closing, a total of 345,500 of the 3.8 million shares will be issued with a four-month-and-a-day hold restriction; another 600,000 will be issued at closing, but will be subject to automatic releases every six months for the next 36 months. “The balance of the 2,854,500 Exchanged Shares will be issued on the basis of one share for every $0.60 in cumulative cash flow generated from the operations of GLI over up to the next 5 fiscal years of the Company,” the release also states.
Ultimately, Graphene Laboratories will operate as a wholly owned subsidiary of Graphene 3D Lab.

Close relationship

What’s perhaps most interesting about Thursday’s deal is that Graphene Laboratories is both controlled and managed by Daniel Stolyarov and Elena Polyakova. Stolyarov is currently president and CEO of Graphene 3D Lab, while Polyakova is the company’s COO and a director.
However, the relationship between the two companies goes deeper than that. As 3DPrint.com points out, Graphene 3D Lab, which was launched in 2013, is a spin out of Graphene Laboratories. While it was originally considered “a bit of a risk considering at the time they only had potential products but no proof of concepts,” it’s since drawn in big investors and gone public.
Given the close relationship between the two companies, it’s unsurprising that Graphene 3D Lab’s board of directors won’t change once the transaction is complete. Thus far, the only announced change is that Polyakova will become co-CEO of the company along with Stolyarov; he will own 18.9 percent of the company, while she will hold 18.8 percent.

What’s next?

Though Graphene 3D Lab’s acquisition of Graphene Laboratories won’t bring much of a shake up in terms of management, it appears that it will result in a broader business model for the company.
Graphene Laboratories owns Graphene Supermarket©, which supplies graphene and advanced materials products to consumers, and also holds a provisional patent regarding graphene manufacturing and processing. According to Graphene 3D Lab, those endeavours will fit well with its work.
“The addition of [Graphene Laboratories’] business and graphene product lines will complement and expand the Company’s existing business of research, development and production of polymer nanocomposite graphene-based filaments for fused filament fabrication in 3D printers,” the company states in its release.
As mentioned, Graphene 3D Lab’s share price saw a nice boost following the release of Thursday’s news. In the last year it’s risen a whopping 490 percent. No word yet on when the acquisition is set to close, but it will certainly be interesting to watch the company’s work after that happens.
 
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 
Editorial Disclosure: Graphene 3D Lab is a client of the Investing News Network. This article is not paid-for content.