Sundial Growers Inc., a Canadian licensed producer of recreational cannabis and Indiva Limited, a Canadian producer of cannabis edibles, are pleased to announce a $22,000,000 strategic investment into Indiva by Sundial.
The Investment will be completed in the form of a brokered private placement led by ATB Capital Markets Inc. of 25,000,000 common shares of Indiva at a price of $0.44 per Common Share, to raise gross proceeds of $11,000,000, and a non-revolving term loan facility to Indiva in the principal amount of $11,000,000. It is anticipated that Sundial will be the sole subscriber in the Placement. Proceeds to Indiva, net of fees, commissions and expenses are expected to be approximately $20.9 million.
“Sundial is pleased to support the development of Indiva’s high-quality products,” said Zach George, Chief Executive Officer of Sundial. “This transaction broadens our exposure to the rapidly expanding cannabis edibles category.” Indiva intends to use the net proceeds of the Placement and Term Loan to retire its outstanding debt in full, which includes its demand loan and promissory note, as well as for working capital and other general corporate purposes.
“We are delighted to welcome Sundial as a strategic investor in Indiva,” said Niel Marotta, President and Chief Executive Officer of Indiva. “The capital from this $22 million investment significantly improves Indiva’s balance sheet, expands our working capital, and provides the resources necessary to support strong growth in our business. Indiva will now have the ability to make additional capital investments, primarily into automation, which will drive higher throughput and profitability, while ensuring our product quality maintains the best-in-class standard our customers and clients depend upon. Indiva’s bolstered financial strength will ensure we can defend our market share position as a top edibles producer in Canada, and continue to bring new and innovative cannabis products to of-age Canadians.”
Sundial and Indiva intend to complete the Investment on or about February 23, 2021, subject to certain conditions customary for transactions of this nature, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. The securities issued under the Placement will be subject to a statutory hold period of four months and one day following the closing of the Placement.
Indiva has agreed to: (a) pay to ATB a cash commission equal to 3.0% of the aggregate gross proceeds received by Indiva from the Placement from Sundial and 6.0% of the aggregate gross proceeds received by Indiva from the Placement from subscribers other than Sundial, if applicable; and (b) pay to the Agent a cash commission equal to 2.0% of the total loan commitment under the Term Loan.
Sundial is a public company with common shares traded on Nasdaq under the symbol “SNDL”.Sundial is a licensed producer that crafts cannabis using state-of-the-art indoor facilities. Our ‘craft-at-scale modular growing approach, award-winning genetics and experienced master growers set us apart. For more information on Sundial, please go to www.sndlgroup.com.