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  5. Harvest Health & Recreation Inc.
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    HARV   CA41755M1023

HARVEST HEALTH & RECREATION INC.

(HARV)
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Pot producer Trulieve to buy Harvest Health for $2.1 bln

05/10/2021 | 08:12am EDT

May 10 (Reuters) - Trulieve Cannabis Corp said on Monday it will buy medical pot producer Harvest Health & Recreation Inc for $2.1 billion, creating the largest U.S. cannabis company by revenue.

The prospect of U.S. reforms gives companies a chance to further capitalize on consumer appetite for pot products, which has risen since the onset of the COVID-19 pandemic, leading to a jump in cannabis dealmaking in recent months.

The deal gives Trulieve a foothold in Florida, Pennsylvania and Maryland, and in core markets including Arizona, where the recreational adult use of cannabis was recently legalized.

Harvest Health's shares rose 15% in afternoon trading to C$5, while Trulieve fell over 4% to C$47.62 on the all-stock deal.

"I think this is the beginning of a trend we are likely to see in the industry," said Robert Leidy, founder at investment manager Teneo Capital Management.

"(The deal) puts pressure on companies like Curaleaf , Green Thumb, and Cresco to think about how they want to build out their footprint," he said.

The combined business will have a retail network of 126 dispensaries across 11 states in the U.S., with a total capacity of 3.1 million square feet, Trulieve said https://refini.tv/33tPcRM.

"We see years of M&A and expect Merger Mondays, like today's announcement of Trulieve and Harvest combining, to be a continued theme for years to come. It won't be long until we are talking about companies doing $2 billion a year in sales, said Morgan Paxhia, co-founder of investment fund Poseidon.

Trulieve and Harvest's 2021 revenue estimate adds up to around $1.2 billion, more than double that of Canadian producer Canopy Growth Corp, currently the world's most valued pot stock.

"The deal is accretive to Trulieve and I think it will be one of, if not the most profitable MSOs (multi-state operators), said Michael Murphy, portfolio manager at Teneo Capital.

"That is certainly worth the premium being paid right now."

Harvest shareholders will get 0.1170 of a Trulieve voting share for each Harvest subordinate voting share held, a 34% premium to the stock's last close. (Reporting by Rithika Krishna and Shariq Khan in Bengaluru; Editing by Shounak Dasgupta and Shailesh Kuber)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AURORA CANNABIS INC. -0.35% 11.36 Delayed Quote.10.57%
AUXLY CANNABIS GROUP INC. 5.36% 0.295 Delayed Quote.9.80%
CANOPY GROWTH CORPORATION -1.00% 29.56 Delayed Quote.-4.66%
CRESCO LABS INC. -1.88% 13.05 Delayed Quote.5.98%
CRESCO LTD. -0.96% 1755 End-of-day quote.33.97%
CRONOS GROUP INC. -0.94% 10.54 Delayed Quote.20.36%
CURALEAF HOLDINGS, INC. -1.35% 16.77 Delayed Quote.11.55%
GREEN THUMB INDUSTRIES INC. 0.83% 36.5 Delayed Quote.16.10%
HARVEST HEALTH & RECREATION INC. 0.62% 4.89 Delayed Quote.76.73%
HEXO CORP. -0.69% 7.19 Delayed Quote.55.03%
ORGANIGRAM HOLDINGS INC. -0.27% 3.74 Delayed Quote.121.89%
THE GREEN ORGANIC DUTCHMAN HOLDINGS LTD. -2.74% 0.355 Delayed Quote.55.32%
THE SUPREME CANNABIS COMPANY, INC. -2.90% 0.335 Delayed Quote.129.03%
TRULIEVE CANNABIS CORP. 1.13% 43.8 Delayed Quote.7.74%
All news about HARVEST HEALTH & RECREATION INC.
06/02HARVEST HEALTH & RECREATION  : Investor Presentation
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05/26HARVEST HEALTH & RECREATION  : Tenth Harvest-Affiliated Pennsylvania Dispensary ..
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05/12HARVEST HEALTH INVESTOR ALERT BY THE : Kahn Swick & Foti, LLC Investigates Adequ..
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05/10HARVEST HEALTH MERGER INVESTIGATION : Halper Sadeh LLP Announces Investigation I..
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05/10UPDATE : Trulieve Down 2% As Makes Its Largest US Cannabis Transaction, Buying H..
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05/10Pot producer Trulieve to buy Harvest Health for $2.1 bln
RE
05/10Trulieve Cannabis to buy Harvest Health & Recreation in $2.1 billion deal
RE
05/10HARVEST HEALTH & RECREATION  : Investor Presentation
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05/07HARVEST HEALTH & RECREATION  : Announces Settlement with Pennsylvania Department..
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05/06HARVEST HEALTH & RECREATION  : C O R R E C T I O N -- Harvest Health & Recreatio..
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More news
Financials (USD)
Sales 2021 404 M - -
Net income 2021 10,2 M - -
Net Debt 2021 127 M - -
P/E ratio 2021 -815x
Yield 2021 -
Capitalization 1 655 M 1 671 M -
EV / Sales 2021 4,41x
EV / Sales 2022 3,33x
Nbr of Employees 1 036
Free-Float 57,6%
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Technical analysis trends HARVEST HEALTH & RECREATION INC.
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 7
Average target price 7,00 CAD
Last Close Price 4,89 CAD
Spread / Highest target 94,3%
Spread / Average Target 43,1%
Spread / Lowest Target 12,5%
EPS Revisions
Managers and Directors
NameTitle
Steven M. White Chief Executive Officer & Non-Independent Director
Deborah K. Keeley Chief Financial Officer
Mark Neal Barnard Chairman
Ana Claudia Dutra Independent Director
Eula L. Adams Independent Director
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