Cannabis SPAC Lined Up to Come Public
Schultze Special Purpose Acquisition Corp. (NASDAQ: SAMA) made a notable move on Monday. The special purpose acquisition company (SPAC) announced that it will combine with Clever Leaves International to operate under the name Clever Leaves Holdings and trade under the ticker CLVR.
Clever Leaves has demonstrated track record in the cannabis sector and has roughly 500 employees. The company has established significant infrastructure and positioned itself to achieve global reach between its Colombia cultivation and extraction operations, its Portuguese cultivation facilities and its global distribution infrastructure in the European Union, which is currently headquartered in Germany.
Apart from its distribution infrastructure, Clever Leaves’ branded nutraceutical manufacturer, Herbal Brands, will provide additional distribution capabilities for non-cannabis related products and is well positioned in the event of legalization in the United States.
The boards of directors from both companies unanimously approved the combination, which is expected to close in the fourth quarter of 2020.
Clever Leaves’ shareholders will be rolling over 96% of their equity ownership into the holdco, reflecting a continuing majority ownership of the combined company in excess of 55%.
Under the terms of the business combination agreement, the transaction is valued at a fully diluted enterprise value of roughly $255 million, which includes an estimated $74 million of net cash ($111 million in cash, assuming no redemptions, and $37 million in debt) on the balance sheet at closing.
Clever Leaves’ executive management team, led by Chief Executive Officer Kyle Detwiler and President Andrés Fajardo will continue to lead the combined company.
Clever Leaves intends to use the proceeds from the business combination to help fund the combined company’s business operations near term and potential M&A opportunities.
Schultze stock closed Monday down 2% at $10.22, in a 52-week range of $9.61 to $11.09.