Kanabo Group Plc (LSE:KNB) signed a letter of Intent to acquire Materia Canada on July 26, 2021. The consideration consists of CAD 20 million as initial consideration and an earnout of CAD 40 million. Both the Initial Consideration and the Earn-Out Consideration are to be satisfied through the issue of ordinary shares in the Company.

Kanabo has completed the majority of the due diligence on Materia and commenced the work on the regulatory documents required to complete the proposed transaction. Following the acquisition, Kanabo will control production, from the initial sourcing of raw materials and in-house manufacturing, all the way to distribution to pharmacies and the end consumer. As of November 4, 2021, Materia finished the due diligence as part of the proposed acquisition.

Eran Zucker of Peterhouse Capital Limited acted as financial advisor to Kanabo Group Plc and ATB Capital Markets Inc. acted as financial advisor to Materia Canada. On May 20, 2022, Kanabo Group has now decided that its proposed transaction with Materia will be most effectively executed through a strategic partnership between the two independent companies, as opposed to the previously proposed acquisition.