Aphria Inc. recently announced its proposed acquisition of CC Pharma GmbH, a distributor of pharmaceutical products to more than 13,000 pharmacies in Germany. The transaction, when closed, would strengthen the Company’s end-to-end medical cannabis operations and infrastructure in Germany, a key market in Aphria’s international expansion. It is anticipated that the transaction would close in January 2019.
“This acquisition strengthens our foothold in Germany, one of the most highly sought-after medical cannabis markets in the world,” stated Vic Neufeld, CEO of Aphria.
“CC Pharma is cash-flow positive and has significant experience with regulatory requirements and international logistics. It will be a strong addition to Aphria’s presence in Germany, providing deeper access to the important pharmacist channel and advancing our ambitious global growth strategy.”
CC Pharma is an importer and distributor of EU-pharmaceuticals for the German market, with over €200 million in annual revenue. Aphria, through its subsidiary Aphria International, previously announced a supply agreement with CC Pharma to export approximately 1,200 kilograms of medical cannabis products from Canada to Germany. With Aphria’s experience , the Company would create a new division of CC Pharma dedicated to medical cannabis. CC Pharma also operates a production, repackaging and labeling facility at its headquarters in Densborn.
“We are pleased to join forces with a global cannabis company, whose commitment to quality, safety and patient care closely aligns with our own. This is an exciting opportunity to build on our established network and advance our participation in a rapidly growing, emerging industry,” added Dr. Manfred Ziegler, Managing Director of CC Pharma.
The transaction would bolster Aphria’s growing presence in Germany, which would include a three-pronged approach covering demand, supply and distribution.
To secure a constant delivery of imported cannabis for German patients, the Company is building one of the biggest state-of-the-art GMP certified cannabis vaults in Bad Bramstedt, northern Germany, with a storage capacity of 5,000 kilograms. To prepare for in-country cultivation in Germany, Aphria is planning on building a Research and Development indoor growing facility in Neumünster, Germany.
“We are focused on leading the way in the medical cannabis market in Germany,” stated Hendrik Knopp, Managing Director of Aphria Germany. “By combining Aphria’s expertise with CC Pharma’s established local market presence, we are well positioned to continue on that journey.”
Aphria would pay €24.5 million in cash to CC Pharma at closing, with an earn-out multiple on future EBITDA of up to another €23.5 million following closing, if certain performance milestones are met.
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