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Health House buys Germany’s CanPharma

11 May 2021
Rueben Hale
Strain of marijuana

Health House International has unveiled plans to acquire German medicinal cannabis manufacturer and distributor, CanPharma, in an all-scrip transaction that will thrust it into the highly valuable German medicinal cannabis market.

Unveiling the deal today, Perth-based Health House said it would yield several benefits, including strengthening its distribution platform in Europe ́s largest medicinal cannabis market, providing revenue expansion and diversification, and positioning it for further expansion opportunities in Europe.

“This is a wonderful opportunity and value-accretive acquisition for the Health House business, its team and shareholders,” executive chairman David Wheeler said.

“CanPharma is a quality business with a highly respected team of entrepreneurs and industry specialists – the opportunity to engage with CanPharma and to ultimately agree terms to acquire the business is a very significant event for the newly-listed Health House and is entirely consistent with its stated ambitions to be a globally significant distributor of medicinal cannabis products.”

Health House will issue 11,753,061 shares to CanPharma, plus issue 6,246,939 shares in a debt-to-equity swap in settlement of CanPharma’s outstanding debts to related parties. In addition, CanPharma will issue 36 million performance shares to its shareholders and management that are convertible into ordinary shares on achievement of performance milestones.

Assuming all performance shares are converted, total consideration is 55,350,000 ordinary shares, or 25.8 per cent of Health House’s issued capital upon completion.

As part of the deal, CanPharma founder, Dr Henrik Sprengel, will remain CEO of the business and join Health House’s board as an executive director. CanPharma CFO, David Attwood, will be appointed group CEO of Health House.

CanPharma is a privately held company with operations in Germany and Spain. It holds the highest level of pharmaceutical licences from German regulators, allowing it to import, manufacture and distribute cannabinoid-based products both in flower and oil extract form.

It is one of a handful of German medicinal cannabis companies to hold a Good Manufacturing Practice manufacturing licence that enables it to repackage, brand and release its products in the EU. The company has been distributing its products in Germany since 2019.

CanPharma also owns Kalapa Clinic in Spain, the first medicinal cannabis consultancy in Europe that provides specialist advice on the use of cannabis-based medicines for a variety of conditions.

Completion of the transaction is subject to various conditions, including regulatory and shareholders’ approval. Indicative completion July 2, 2021.

Founded in 2011, Health House is fully licensed in Australia to import, export and distribute medicinal cannabis. It distributes over 11 medicinal cannabis products across Australasia. Since its formation in 2014, the group has been pursuing opportunities in the global medicinal cannabis sector, by acquiring companies such as the AusCann Group, a distributor of cannabinoid-based medicines.

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