Debra Borchardt
The Green Organic Dutchman Holdings Ltd. (TGODF) signed a definitive agreement to acquire 100% of the issued and outstanding shares of privately-held HemPoland in an immediately accretive cash and share transaction.
HemPoland is a leading European manufacturer and marketer of premium organic CBD oils led by founder and CEO, Maciej Kowalski, one of Europe’s most widely recognized CBD experts. TGOD’s goal in the acquisition is to get access to HemPoland’s vast distribution network, premium Cannabigold brand, hemp oil extraction technologies, and get a jump into the European market for TGOD’s medical & recreational products and licensing deals. In 2017, the company produced over 32,000 kgs of organic dried flower and 310 kgs of organic CBD oils.
The deal will cost of US$7.75 million in cash and 1,968,323 restricted TGOD shares currently worth US$7.75 million with an additional US$10.3 million cash investment for rapid European expansion. In addition to that, there are performance-based incentives of up to US$12 million for delivery of US$32 million of EBITDA in fiscal 2021.
“HemPoland is a key component to a number of strategic acquisitions and planned partnerships focused on expanding our global distribution network. This acquisition will significantly add to the Company’s top and bottom line,” said Brian Athaide, CEO of TGOD. “Gaining market share with CBD products now, in the EU, with over 700 locations allows TGOD to establish immediate brand awareness across all verticals including infused beverages. This is an accretive acquisition and gateway to Europe’s 750 million people accelerating our plan of becoming the world’s largest organic cannabis brand,” continued Athaide.
HemPoland was founded in 2014 and was the first company in Poland to obtain a state license allowing the company to grow hemp and manufacture CBD oil products. According to the company statement, HemPoland’s management is comprised of experts in cultivation, oil extraction, and marketing of high-quality organic CBD oil. The company is vertically integrated, with over 1,250 acres of cultivation leveraging third parties, multiple commercial-scale extraction units, local distributors in Poland, Austria, Netherlands, Germany, United Kingdom, Italy, Switzerland, Portugal, Ireland, Czech Republic, Slovenia, Lithuania, and Estonia, and product sales in over 700 locations.
“We are pleased to join forces with the premier brand in organic cannabis, TGOD, to scale the growth of our business both domestically and internationally,” said Maciej Kowalski, Founder, and CEO of HemPoland. “The market and demand for premium organic cannabis and CBD oil is just the beginning, ultimately leading to a variety of higher margin products. Having access to TGOD’s capital, licensing deals, experienced leadership team, and intellectual property will significantly drive momentum for our brand and our company. We are proud to be part of the TGOD family and look forward to becoming the global leaders in organic cannabis.”
Terms Of The Deal
The financial terms of the transaction are US$7.75 million cash and 1,968,323 restricted TGOD shares currently worth US$7.75 million, which will be escrowed for a term of three years from closing. In addition, there is contingent consideration of up to 3,047,722 shares of TGOD currently worth US$12 million based on delivery of US$32 million EBITDA in the 2021 fiscal year. TGOD will invest a further US$10.3 million in HemPoland to fund product development, R&D, drug development and continue global expansion initiatives.
Stock Performance
TGOD was lately trading at $3.93 on the OTC Markets, down from its 52-week high of $7.57, but above its year low of $2.78.
