ASX Announcement
24 April 2019
Elixinol to acquire 25% equity interest in Pet Releaf,
the market leading
HIGHLIGHTS:
Elixinol Global (EXL) to acquire, through its
Pet Releaf is the pioneer and market leading pet brand for
Elixinol to pay Pet Releaf US$4.4 million in cash and US$1.9 million in EXL scrip with the majority of proceeds to be used for working capital to facilitate growth
In FY2018, Pet Releaf had revenue of US$8.1 million, a significant increase on FY2017 revenue of US$2.8 million
Pet Releaf achieved continuous monthly growth during FY2018 with monthly revenues at year end of US$1.0 million
Elixinol's equity investment into Pet Releaf follows a longstanding relationship of over 4 years, through which Elixinol exclusively produces and supplies CBD extracted from exclusive organic hemp strains grown specifically for Pet Releaf products
Elixinol Global Limited (EXL or the Company) (ASX:EXL; OTCQX:ELLXF), a global company operating in the industrial hemp, dietary supplements and emerging medicinal cannabis sectors, is pleased to announce that it will acquire 25% of Altmed Pets LLC (Pet Releaf), through its
The investment is an extension of a
Also based out of Colorado, Pet Releaf is the pioneer and market leading pet brand for
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leverage seed to sale supply chain efficiencies with extensive scalability,
The majority of the funds received from Elixinol will be utilised by Pet Releaf to fund working capital and scale the business for expected continued growth including new product lines, key strategic hires and increased capacity in a new state of the art 25,000 square foot production facility.
In addition to being a sales channel for Pet Releaf products, Elixinol is the exclusive supplier of final hemp extract sourced from the USDA Organic certified hemp strain grown specifically for Pet Releaf. Pet Releaf was a foundation customer of Elixinol, with both businesses commencing around the same time in
Pet Releaf business performance and deal terms
In FY2018 (December
Pet Releaf recently achieved its 16th consecutive revenue growth quarter and 16th consecutive best quarter ever in the company's history, thanks to growth in its entire portfolio of product lines.
Elixinol will acquire 25% of Pet Releaf for a purchase price of US$4.4 million cash plus fully paid ordinary shares in EXL valued at US$1.9 million.
The EXL shares issued to the
Existing holders of ordinary securities in the Company will be diluted by 0.42% as a result of the scrip issue. No underwriting arrangements were entered into in connection with the Issue and no fees will be paid in connection with the Issue other than the standard fees payable to the ASX and the Company’s share registrar for any new issues of shares. Shares will be allotted and trading is to occur on 25 April 2019.
Upon completion of Elixinol gaining an equity interest, Elixinol President Gabriel Ettenson will join the Pet Releaf Board.
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A key investment into
By acquiring an equity interest in Pet Releaf, Elixinol will partner and strengthen its relationship with a major customer and secure a profitable investment in the
Elixinol President, Gabriel Ettenson commented,
“We’ve long enjoyed our relationship with Pet Releaf. This deal strengthens our supply agreements and mutual and synergistic distribution networks. It ensures Pet Releaf products, which so many dog and cat lovers rely on, will have scalability and ongoing quality of supply.”
Commenting on the equity investment by Elixinol, President and
Pet Releaf was also named by the Hemp Business Journal as a leading brand to watch in the entire CBD space. The current focus on pet and animal products is in the dogs and cats category which is expected to expand to include equine sports (e.g. horse racing, polo, dressage, rodeo) and potentially to small mammals and more exotic mammals.
“We are the original founders of the hemp/CBD space in the pet industry, which is a completely different universe to the human world because canines and felines have very different endocannabinoid systems and needs to humans,” said Pet Releaf’s Stephen Smith. “Through this new capital investment, we are strongly positioned to forge ahead as industry innovators and to continue with our mission to change what healthy means for pets.”
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Elixinol Global Limited (ASX:EXL; OTCQX:ELLXF) through its businesses has a global presence in the cannabis industry including
Elixinol LLC (“Elixinol”), founded in 2014, is a manufacturer and global distributor of hemp dietary supplement and skincare products, with operations based out of Colorado, USA.
Hemp Foods Australia Pty Ltd (“Hemp Foods Australia”), founded in 1999, is a leading hemp food wholesaler, retailer, manufacturer and exporter of bulk and branded raw materials, and finished products.
Nunyara Pharma Pty Ltd (“Nunyara”), formerly known as Elixinol Australia, was founded in
2014 to participate in the emerging Australian medicinal cannabis market and submitted licence applications for cultivation and manufacture to the Office of Drug Control in early 2018. These applications are currently pending approval.
See more at www.elixinolglobal.com
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