Canadian cannabis producer SNDL (SNDL) is buying rival Valens Company (VLNS) in an all-
stock deal valued at $138 million
SNDL, previously known as Sundial Growers, said Valens’ shareholders will receive 0.3334 of a
common share of SNDL stock for each share they currently own, giving the deal an implied
value of $138 million.
The combined company is expected to achieve $10 million in annual cost savings, while adding
$15 million of earnings due to synergies, SNDL said in a written statement.
SNDL already owned 10% of Valens through stock it bought on the open market.
The acquisition comes amid a wave of consolidation in the Canadian cannabis sector, with
larger producers snapping up smaller, unprofitable ones in an effort to gain market share.
SNDL had previously bought liquor-and-cannabis retail operator Alcanna and retailer Inner Spirit
Holdings. SNDL also runs an investment venture called SunStream Bancorp that provides debt
and credit to U.S. cannabis producers.
Despite its acquisitions and rebrand, SNDL remains unprofitable, having lost $47 million in its
most recent quarter. For its part, Valens Company reported a $65 million net loss in its latest
quarter. Valens was also in danger of running out of cash with only $26 million on its balance
sheet.
So far this year, SNDL stock has fallen 55% to $2.76 per share. Valens’ stock is down 67%
year-to-date and trading at $1.07 a share.
