HempFusion Wellness’ buying spree continued Tuesday when it announced a $25 million agreement to purchase Sagely Naturals, a CBD brand with distribution to more than 14,000 U.S retailers.
Based in Santa Monica, California, Sagely Naturals’ female-focused products are sold by retailers including CVS, Rite Aid, Albertsons, Sprouts and Nordstrom.
The brand claims a 23% market share in the drug channel, according to market analytics firm Information Resources, Inc.
Terms include $25 million as an initial consideration, with $2 million in cash and $23 million in common shares of HempFusion.
Sagely Naturals co-CEOs Kerrigan Behrens and Kaley Nichol may also receive a $5 million earnout payment, subject to achieving revenue targets, with 40% of the earnout paid in HempFusion shares and the rest in cash.
Sagely Naturals will become a wholly owned subsidiary of HempFusion. Behrens and Nichol will remain as co-CEOs.
With Sagely Naturals’ 2020 net revenue of more than $4 million, combined with the closing of HempFusion’s recent purchase of Apothecanna, the deal will more than triple HempFusion’s 2020 revenue, HempFusion CEO Jason Mitchell in a statement.
HempFusion trades on the Toronto Stock Exchange as CBD.U.