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Flora Growth Corp. (NASDAQ: FLGC) announced that over 73% of Franchise Global Health Inc. (TSXV: FGH) shareholders support Flora's acquisition of FGH, set for a vote on December 13, 2022. This acquisition is viewed as highly beneficial, potentially enhancing Flora's presence in Germany and the broader EU cannabis market. The transaction involves Flora issuing approximately 36.5 million to 43.5 million shares to FGH shareholders, who will face a 90-day selling restriction. Positive shareholder feedback has been noted, reinforcing confidence in this strategic move.
Positive
Over 73% of FGH shareholders support the acquisition, indicating strong backing.
The acquisition enhances Flora's position in the emerging cannabis market in Germany and across the EU.
Transaction expected to be financially accretive.
Negative
None.
FORT LAUDERDALE, Fla. & TORONTO--(BUSINESS WIRE)--
Flora Growth Corp. (NASDAQ: FLGC) (“Flora'' or the “Company”), a leading all-outdoor cultivator, manufacturer and distributor of global cannabis products and brands, announced today that the holders of over 73% of the outstanding shares of Franchise Global Health Inc. (TSXV: FGH) (“FGH”) have entered into voting and support agreements, pursuant to which they have agreed to vote their shares in favor of Flora’s acquisition of FGH at FGH’s special meeting of shareholders to be held on December 13, 2022 (the “Meeting”).
“We are pleased that FGH shareholders clearly recognize the value of this transaction, as well as the enormous potential of our companies joining forces,” said Luis Merchan, Chairman and CEO of Flora Growth. “This acquisition is tremendously accretive and will solidify Flora’s foothold, not only in what we view as the most relevant emerging cannabis market, Germany, but in the EU more broadly.”
As noted in last month’s announcement of the signing of the definitive agreement between the two companies, completion of the transaction is subject to certain closing conditions customary for transactions of this nature including, among other things, approval of the plan of arrangement by the Supreme Court of British Columbia and the approval of at least 66 2/3% of the votes cast by shareholders of FGH at the Meeting. While voting and support agreements represent legally binding obligations to vote in favor of the transaction at the Meeting, entering into such agreements is not a substitute for formally voting, in person or by proxy. All FGH shareholders are encouraged to vote in person or by proxy at the Meeting.
“We have been encouraged by the positive feedback we’ve received from our shareholders regarding this acquisition, as well as the speed at which we’ve been able to secure the support of our shareholders for this deal,” said Clifford Starke, CEO of FGH. “We look forward to working closely with the Flora leadership team to integrate our teams and to bring Flora’s high-quality cannabis to consumers in Germany and markets around the world.”
About the Transaction
On October 21, 2022, Flora and FGH entered into an Arrangement Agreement (the “Arrangement Agreement”) pursuant to which Flora intends to acquire all the issued and outstanding common shares of FGH by way of a statutory plan of arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia). As consideration for the acquisition of 100% of the issued and outstanding FGH common shares, at the closing of the Arrangement, Flora will issue between 36,515,060 and 43,525,951 of its common shares, based upon a formula set forth in the Arrangement Agreement. In accordance with the terms set forth in the Arrangement Agreement, upon the completion of the Arrangement, all Flora common shares to be delivered to the former shareholders of FGH shall be restricted from being sold for a period of ninety (90) days following the completion of the Arrangement. In addition, Clifford Starke, the Chairman and Chief Executive Officer of FGH, shall have the right to name two designees to serve on Flora’s board of directors immediately following the closing of the Arrangement. For further information on the Arrangement Agreement and the Arrangement, reference is made to Flora’s current report on Form 6-K, filed with the Securities and Exchange Commission on October 24, 2022.
About Flora Growth Corp.
Flora is building a connected, design-led collective of plant-based wellness and lifestyle brands, designed to deliver the most compelling customer experiences in the world, one community at a time. As the operator of one of the largest outdoor cannabis cultivation facilities, Flora leverages natural, cost-effective cultivation practices to supply cannabis derivatives to its commercial, house of brands, and life sciences divisions. Visit www.floragrowth.com or follow @floragrowthcorp on social media for more information.
About Franchise Global Health Inc.
Franchise Global Health Inc., through its subsidiaries, is a multi-national operator in the medical cannabis and pharmaceutical industries, with principal operations in Germany and with operations, assets, strategic partnerships and investments internationally. FGH’s business objective is to develop a fully-integrated, leading European medical cannabis business, with the goal of providing high-quality pharmaceutical grade medical cannabis to distribution partners and, ultimately, to patients, at competitive prices. For more information, please visit www.franchiseglobalhealth.com or visit FGH’s SEDAR profile at www.sedar.com.
This press release contains ‘‘forward-looking statements,’’ as defined by federal securities laws. Forward-looking statements reflect Flora’s current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,” “potential,” “continue,” and the negatives of these words and other similar expressions generally identify forward looking statements. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in Flora’s Annual Report on Form 20-F filed with the SEC on May 9, 2022, as such factors may be updated from time to time in Flora’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in Flora’s filings with the SEC. While forward-looking statements reflect Flora’s good faith beliefs, they are not guarantees of future performance. Flora disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to Flora (or to third parties making the forward-looking statements).
