Auxly Cannabis Group reached an agreement to acquire KGK, a Canadian CRO focused on health and wellness, in a cash and stock deal worth $12.3 million.
Auxly, which is based in Vancouver, said the deal will advance its plans for product development with its subsidiary, Dosecann.
As part of the deal, Auxly will pick up all issued and outstanding shares of KGK, which will become a wholly owned subsidiary when the sale is completed. The deal is subject to regulatory approvals.
In recent years, KGK began branching out from the health and wellness space to include cannabinoid and animal products.
“We believe KGK’s track record of success as a leading health and wellness focused contract research organization in North America is a testament to their ability to add a significant amount of value to Auxly’s midstream business segment,” Hugo Alves, Auxly’s president, said in a statement.
KGK shareholders will receive 4,132,231 Auxly shares priced at $1.21 per common share, the company said. The remainder of the purchase price will be paid in cash.