Sydney-based cannabis company Creso Pharma (ASX:CPH) has agreed to be acquired by Canadian company PharmaCielo for $122 million.
PharmaCielo Limited is a global company privately held and headquartered in Canada. It is focused on processing and supplying all natural, medicinal-grade cannabis oil extracts and related products.
In a statement, Creso Pharma said the proposed acquisition will combine two "complementary cannabis companies to create a well-capitalised, publicly traded company with a strong growth profile and significant strategic advantages."
Creso Pharma shareholders will receive 0.0775 PharmaCielo shares for every Creso Pharma share. This values the company at $0.63 - an over 30 per cent premium on the company's prior closing share price.
Creso Pharma security holders will hold approximately 13 per cent of the issued shares in the PharmaCielo following the closure of the acquisition.
The company said its board of directors "unanimously recommend shareholders and listed option holders vote in favour" of the acquisition
PharmaCielo has also agreed to appoint Creso Pharma's co-founder and CEO Dr Miri Halperin Wernli as a director following completion of the acquisition.
The company said, subject to the approval of Creso Pharma shareholders and listed option holders, the acquisition should be completed in the second half of 2019.