Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF) has entered into a scheme implementation deed to acquire the whole of the issued capital of Health House International Ltd (HHI), an international distributor of medical cannabis.
The deed was signed to acquire ASX-listed HHI for a total value of up to A$4.6 million, based on Creso’s share price of A$0.043 per share.
This acquisition will provide the company with another revenue-generating operating division, which has the potential to considerably broaden its international footprint and growth trajectory.
Furthermore, it reiterates the company’s strategy of assembling a strategic portfolio of businesses and brands that have complementary strengths across manufacturing, processing, formulation, sales and distribution.
“Strategic portfolio of businesses”
Creso CEO and managing director William Lay said: “The scheme with Health House reiterates the company’s strategy of leveraging its position to assemble a strategic portfolio of businesses and brands that have complementary strengths across manufacturing, processing, formulation, sales and distribution.
“Health House will provide Creso Pharma with strengthened global distribution, established partnerships into new markets and a revenue profile which will directly benefit our existing portfolio.
“The group has continued to report strong financial results and we have a number of opportunities in train, which can further accelerate this while reducing costs through shared services.
“The integration of HHI continues to progress well at a Group level and we look forward to providing additional updates on potential M&A opportunities in the near term.”
About Health House
Health House is an international distributor of medicinal cannabis with multiple strategic licenses to store, distribute, import, export and sell controlled drugs.
These licences and HHI’s partnerships leave it well-placed to grow a strong footprint in the Australian and UK cannabis markets.
During FY22, HHI generated about A$15.6 million in revenue which represented an increase of 85.1% in FY21 and a 161.6% surge in FY20.
Cost reduction opportunities across HHI are apparent – Health House is expected to benefit from shared group services, allowing for steep reductions in corporate costs in HHI.
HHI recently completed the sale of CanPharma, eliminating an underperforming asset and its associated liabilities.