Labat Africa to acquire remaining 30% interest in CannAfrica
JSE-listed Labat Africa, in terms of a sale of business and assets agreement, will acquire the remaining 30% interest in CannAfrica from a private owner for R6.4-million to be settled through the issue of 29.9-million Labat Africa shares and the balance in cash of R2.8-million, which will be offset against a loan account owed by the private owner to CannAfrica.
The effective date of the acquisition is June 1.
The CannAfrica agreement is in line with the strategy to expand the Labat Healthcare business and further entrench its position in the cannabis market in Southern Africa.
CannAfrica is an established and fully integrated cannabis business offering.
The rollout of Labat Healthcare retail stores is said to be progressing well through both company-owned stores and franchisees, with a presence in several areas in the country.
The success of the CannAfrica stores is posited to be showcased in the sale of two corporate-owned stores to franchisees.
It is a business model that the company will continue to deploy.
Subsequent to year-end, additional stores and areas have been signed up or identified throughout the country to be rolled out this calendar year.
These stores will be a combination of franchise stores and corporate-owned flagship stores.
CannAfrica will also continue to offer franchise rights to interested individuals.
The CannAfrica acquisition is subject to the issue and listing of the shares for the CannAfrica acquisition.
According to management accounts for the year ended May 31, the estimated profit before taxation amounted to R672 458 and the net asset value was R2.4-million. The financial information is in the process of being audited and is presented before final audit adjustments.
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