Intercure’s Kandok completes the merger – the capital market

There are times when you have to hit the iron when it is hot. The stock market is boiling, the IPOs are at their peak as well

Intercure
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Want to take advantage of the tide to quickly complete Kendock’s merger into Spock, which we reported about a month ago. The company planned to complete the move by April and is now in a hurry to close.

Under the merger agreement, as we announced about three weeks ago, Kandok will merge with the Canadian company SPAC (the skeleton of the real estate company subversive real estate acquisition reit) at a value of $ 300 million. To complete the transaction, the skeleton raised about $ 225 million From investors as well as about $ 65 million (at a price of $ 10 per share) from new investors.As a result, Intercure will also begin trading on the Toronto TSX and then on the NASDAQ.

Following the merger, Intercure’s current shareholders will hold up to 43% of Intercure’s shares, SPAC investors will hold approximately 33.2% of the shares, SPAC’s private equity investors will hold approximately 9.6% of the shares and SPAC’s founders will hold approximately 9.3% of the shares. .

Following the completion of the deal, Intercure will have at least $ 55 million in cash and the company is interested in increasing the amount to about $ 290 million, which is one of the reasons it wants to become dual. Since then, it announced the planned deal – Intercure’s market value has been cut by about 53% to a market value of about NIS 734 million (including the increase today) and since the beginning of the year, the share has jumped by about 75%.

The company is still at a loss – but improving from quarter to quarter
Intercure itself has forecast an optimistic revenue estimate for recent quarters and significant quarter-on-quarter growth. The company is still a loss, although in the third quarter of 2020 it recorded profits of NIS 1.7 million for the first time, compared with a loss of NIS 15.5 million in the corresponding quarter last year and a loss of NIS 1 million in the previous quarter. The company generated NIS 22.5 million, compared with revenues of NIS 2.6 million in the corresponding quarter last year, compared with revenues of NIS 11.2 million in the previous quarter. The company also expects further improvement in profitability.

The tide in cannabis is breaking records
The cannabis industry has enjoyed tremendous turmoil in recent months following Joe Biden’s victory in the US presidency. It is expected that in the coming years more countries will approve personal use of cannabis without criminalization. At higher rates.

Kandok recently received a permanent license for the southern facility in terms of trade. Thus, according to the company’s publications, it has become the largest medical cannabis producer in Israel. The permanent license was obtained from the Medical Cannabis Unit in the Ministry of Health (HIKR) for the cultivation and cultivation of cannabis plants and the cultivation of inflorescences and plants under IMC-GAP quality conditions at the Kandok cultivation facility in the south. In strategic cooperation, now with the possibility of trading on the NASDAQ, it will be able to increase its activities.

Kandok is a wholly owned company of Intercure, and has been engaged for about 13 years in research, cultivation, production, cultivation, import, export and marketing of medical cannabis to tens of thousands of patients with the approval of the Ministry of Health. It is interested in establishing its position as a significant player in the field of medical use. The company is growing and increasing its presence in Israel and around the world. Its maximum production capacity stands at about 100 tons of medical cannabis. Kanduk has collaborations with international companies such as Tilray, Organigram, Aphria, Charlotte’s Web and the Uruguayan corporation Fotmer.

Recall that recently Tabula also announced a merger with Spack at an activity value of $ 2.6 billion, and today there are dozens of Spokes that are essentially stock market skeletons full of cash in the position of absorbing activities. It is convenient for issuers because they save several stages of the IPO, for Spacks it is good – it creates value for them almost too much (usually). And so the spa industry is only growing – for more on the trend, click here.