High Tide Inc. (TSXV: HITI) (Nasdaq: HITI) (FSE: 2LYA) is makings its way into the United Kingdom through the purchase of a Scotland-based CBD brand.
On Thursday, the Calgary, Alberta-based firm explained the details of the purchase, which will see High Tide acquire 80 per cent of Enigmaa Ltd., operating as Blessed CBD, for £9.06 million. High Tide has the option to take on the remaining 20 per cent of Blessed at any time.
The arm’s length transaction is expected to close this month. It requires a receipt of TSX Venture Exchange approval and “other customary conditions of closing.”
A High Tide statement boasts Blessed’s financial profile, with 81-per-cent gross margins and 54-per-cent earnings before interest, taxes, depreciation and amortization (EBITDA) margins in the 12 months ended August 2021, as well as revenue of £5.1 million and EBITDA of £2.8 million.
The Canadian firm adds that with nearly five million site visits in 2020, Blessed is one of the most popular direct-to-consumer CBD brands in the U.K. Blessed offers hemp-derived CBD products, including CBD oils, creams, gummies and capsules.
Blessed’s founder and CEO, Vithurs Thiru, will join High Tide as a senior manager of search (SEO) to help grow the CBD business globally.
“We continue to increase our online prowess by adding asset-light businesses to our growing global e-commerce portfolio,” said Raj Grover, High Tide CEO.
“This acquisition marks our entry into the highly lucrative and rapidly-growing U.K. CBD space which we expect to serve as a launching pad for High Tide to further penetrate the E.U. market for hemp-derived CBD products, while also taking advantage of cross-selling opportunities related to our in-house product lines.”
High Tide’s stock went up five per cent to $7.42 on Thursday.