June 1, The company Valens (TSX: VLNS) announced that they had entered into their C $ 40 million purchase agreement, which consisted of the sale of nearly 14 million units by the company at a price of $ 3.30 per unit. Each unit gives its holder one share and one half warrants exercisable at a price of $ 4.15 and includes an acceleration clause attached to the warrants. The company says it will use the proceeds to “pursue opportunistic acquisitions and business expansion opportunities in North America and the international market,” as well as use $ 5 million of the funding for capital expenditures.
Valens has eight analysts covering the company with a weighted price target of C $ 4.22, up about 34%. Among the analysts, one has a strong buy rating, six have a buy rating, and only one has a maintain rating. The highest on the street is from M Partners with a price target of CA $ 5.00 while the lowest sits at CA $ 3.50.
Following this news, Haywood reiterated his target price of C $ 4.50 and his buy rating on Valens. Their analyst Neal Gilmer says that this buyout strengthens their balance sheet. Gilmer believes the company is now well capitalized and will seek acquisitions and expansions in North America as well as internationally.
The company also recently announced the closing of its acquisition of Green Roads, with six new products being launched through a partnership with Verse Cannabis. Haywood has now increased its estimates for 2021 and 2022 to include this acquisition. They say this acquisition gives Valens access to more than 7,000 outlets in the United States to sell CBD and will allow Green Roads brands to enter Canada, opening up additional revenue segments.
Information for this briefing was found through Sedar and Refinitiv. The author has no title or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author does not hold any license.