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Planet 13 to Buy Next Green Wave Holdings for Approximately $91 Million in Stock

Planet 13 to Acquire Next Green Wave Holdings, Expanding Presence in California with Premium Indoor Cultivation and an Extensive, Pheno-Hunted Cultivar Base

LAS VEGAS, NV / ACCESSWIRE / December 20, 2021 / Planet 13 Holdings Inc. (“Planet 13” or the “Company”) (CSE:PLTH)(OTCQX:PLNHF) and Next Green Wave Holdings Inc. (“Next Green Wave” or “NGW”) (CSE:NGW)(OTCQX:NXGWF) are pleased to announce that they have entered into a definitive arrangement agreement (the “Agreement”) pursuant to which Planet 13 will acquire all of the issued and outstanding common shares (the “NGW Shares”) of NGW, by way of a court approved plan of arrangement, for total consideration of approximately C$91 million (the “Transaction”).

Proposed Transaction

Under the terms of the Agreement and based on pricing as of December 17, 2021, shareholders of Next Green Wave (“NGW Shareholders”) will receive 0.1081 of a common share of Planet 13 (the “Exchange Ratio”) subject to calculations as described below, and $0.0001 in cash, for each NGW Share held. Based on Planet 13’s 10-day volume weighted average price (“VWAP”) and the Exchange Ratio as at December 17, 2021, the implied deal price per NGW Share is C$0.465, representing a premium of approximately 52% to the closing price and 44% to the 10-day VWAP of NGW Shares on the Canadian Securities Exchange (the “CSE”) as of December 17, 2021. The Exchange Ratio is subject to adjustment as follows:

  • If the 10-day VWAP of Planet 13 common shares (the “Planet 13 Shares”) on the CSE immediately preceding the second business day prior to the closing of the Transaction (the “Planet 13 Closing Price”) is below C$5.50 but above C$4.06, then the Exchange Ratio will be calculated as C$0.4650 divided by the Planet 13 Closing Price;
  • If the Planet 13 Closing Price is less than or equal to C$4.06, then the Exchange Ratio shall be 0.1145; and
  • If the Planet 13 Closing Price is greater than or equal to C$5.50, then the Exchange Ratio shall be 0.0845.

After giving effect to the Transaction, and based on pricing as of December 17, 2021, NGW Shareholders will hold approximately 9.2% ownership in the pro-forma company (on a fully-diluted basis).

Transaction Rationale

  • Significant premium being offered to NGW Shareholders of approximately 44% based on both company’s 10-day VWAP and representing an implied offer price of approximately C$0.465 per NGW Share as of December 17, 2021.
  • Transaction is expected to be immediately accretive to 2021 and 2022 EBITDA.
  • Transaction structure provides meaningful price protection against market volatility in Planet 13’s share price up to the completion of the Transaction.
  • NGW’s operations will serve as the backbone of Planet 13’s continued focus on the California market. NGW will enable Planet 13 to introduce their diverse brand portfolio of exotic, pheno-hunted cultivars to the Santa Ana SuperStore as well as across the state.
  • NGW Shareholders will immediately benefit from the enhanced size, scale and liquidity of Planet 13’s capital markets presence.
  • NGW Shareholders will participate fully in the upside of Planet 13’s upcoming expansions into Illinois and Florida.
  • Planet 13 to retain NGW’s management team, deepening the pro forma company’s knowledge base and expertise across the California market.
  • Planet 13 to benefit from NGW’s highly respected cultivation techniques and pheno-hunted cultivars, greatly expanding the pro forma company’s cultivation capabilities, product offerings, consistency and proficiency.
  • Combined experience and expertise of the Planet 13 and NGW operational teams will drive further improvements across the pro forma company’s footprint.

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