Elixinol Global has signed a binding agreement to acquire German CBD company CannaCare for an upfront consideration of €3m in cash and €6m in Elixinol shares.
A second earnout payment up to a maximum of €15m in Elixinol shares will become payable in March 2022, based on CannaCare achieving revenue and profit targets.
Founded in 2018 and based in Hamburg, CannaCare manufactures and distributes a range of CBD products including its Canobo oils, sprays and cosmetics.
As part of the proposed transaction, CannaCare’s major shareholder Frank Otto will join the Elixinol board as non-executive director and the existing management team will continue to operate the business.
Elixinol expects the combination of CannaCare with its existing UK operation to create a pan-European business at scale, well positioned to capitalise on the burgeoning European CBD market.
Elixinol Global CEO Oliver Horn said: “We are incredibly excited about this transformational opportunity which leapfrogs Elixinol closer to its vision of becoming a profitable, global, hemp-derived consumer goods wellness business.”
The transaction is subject to shareholder approval.