Subject to a review of the Offer documentation, MMJ expects that its share of the Initial Consideration (refer below) would approximate the current book value of MMJ’s investment1.
In commenting on the transaction, MMJ’s Chairman, Mr. Wall said “This proposed acquisition of Embark Health Inc. is beneficial for MMJ investors. It would allow MMJ to exit its investment at its book value and retain a share in the potential upside of the larger merged Bevcanna business.”
MMJ was a foundation investor in Embark in July 2018 – the investment now comprises 3.697m common shares (approximately 12% shareholding) in Embark with warrants that provide the option for MMJ to acquire further Embark shares.
In 2018 MMJ was an early investor in Bevcanna and sold its investment following its initial public offering in 2019.
Details of the Offer are included in the attached announcement by Bevcanna to the Canadian Stock Exchange.
Under the terms of the Offer:
MMJ has been advised that the issue of the Bevcanna Shares pursuant to the Initial Consideration will be completed following the satisfaction of all conditions in the acquisition agreement and on a date mutually agreeable to the parties. It is expected that the Offer would be completed by the end of 2021.
The Bevcanna Shares received by Embark Shareholders as part of the Initial Consideration, including MMJ, will be subject to voluntary resale restrictions, with 1/12th of the Bevcanna Shares received being released from the resale restriction on the last day of each month following closing of the Offer for a period of one year
1 Based on Bevcanna share price of CAD34 cents on 21 September 2021
2 100% of Embark Health valued at CAD15.9m based on Bevcanna share price of CAD34 cents on 21 September 2021