Portfolio company Form Factory Sells to Acreage Holdings
Dyrdek Machine Portfolio company Form Factory, has announced its’ entrance into an agreement with Acreage Holdings, the largest vertically integrated, multi- state owner of cannabis licenses and assets in the United States. Acreage Holdings Inc, currently listed on the Canadian Securities Exchange under ACR, has acquired Form Factory for $160 million in an all stock transaction.
The multi-state manufacturer and distributor of cannabis-based products was formed by combining two top performing companies in the cannabis space: Gesundheit Foods, the leading co-packer in the industry and Made By Science, an exclusive patented IP portfolio that includes a revolutionary process of THC encapsulation in edibles, which has been led by Josh Held.
Held has been a part of the Dyrdek Machine family from the beginning when Dyrdek Machine invested in his first company, Chemistry Holdings. Chemistry Holdings later developed into Made By Science, and when Made By Science merged with Gesundheit Foods, Josh Held coordinated the development of Form Factory’s existing intellectual property as President.
The acquisition of Form Factory not only positions Acreage to become the first and only national cannabis Consumer Packaged Goods (CPG) company, distribution platform, and national contract manufacturer of branded cannabis products, it also grants the opportunity to develop, manufacture and distribute an original “family of brands”. These new brands will be in addition to the current pipeline of twenty one brands currently being on boarded and fourteen additional brands currently in the negotiation process. Acreage will also obtain Form Factory’s grow/processing licenses and operations in Portland, Los Angeles and Oakland, the management services contract for the Washington contract manufacturing business, as well as all intellectual property.
The transaction is expected to close in the first quarter of 2019, to be revenue accretive in 2019, and EBITDA accretive in 2020. 60% of the consideration paid to Form Factory’s employees, including its’ management, or 24% of the total consideration, is subject to a 24-month vesting period, and completion of the acquisition is also subject to customary closing conditions, including obtaining Form Factory shareholder approval and the listing of the Subordinate Voting Shares to be issued as consideration on the Canadian Securities Exchange (the “CSE”). Listing of such shares is subject to the Company satisfying all requirements of the CSE.
Form Factory’s Co-Founders & Co-CEOs, Josh Held, Tony Bash, and Todd Boren share their excitement over the acquisition:
“Form Factory’s innovative and proprietary delivery systems, combined with Acreage’s massive scale will ensure that we become a trusted partner enabling national brands to thrive.” – Josh Held, co-founder and President of Form Factory
“We are thrilled to be joining the Acreage family,” said “The merger with Acreage represents the fulfillment of the vision we had when we founded Form Factory. With Acreage, our mission to create the largest supplier of trusted cannabis products in the world will accelerate, providing all people with access to the benefits of cannabis. – Tony Bash, co-founder & Co-CEO of Form Factory
“We embarked on this journey because we believed in the team at Form Factory and knew they were among the best in the world. Our merger with Acreage reflects the same confidence in their team and ensures we can continue to relentlessly innovate the science driving the cannabis industry to provide brands and consumers with safe, efficient and consistent product formulations. – Todd Boren, Co Founder and Co-CEO of Form Factory and Managing Partner of MacArthur Investments, the largest shareholder of Form Factory.
For a detailed run-down of the deal – check out the New Cannabis Ventures article here.