Top cannabis-focused website Leafly on Monday agreed to go public by merging with a blank-check firm owned by one of its biggest backers, Merida Capital Holdings, in a deal valuing the combined company at about $532m.
Like the rest of the cannabis industry, Leafly has benefited from prospects of federal marijuana legalization in the United States and a pandemic-induced jump in pot use. Its site visits rose 12% last year to more than 220 million, making it the world’s most visited website on weed.
The deal with blank-check firm Merida Merger Corp I has an enterprise value of about $385 million and was first reported by Reuters last week.
It gives Seattle-based Leafly proceeds of up to $161.5m that it can use to expand its business in newly legalized markets such as New York, Chief Executive Officer Yoko Miyashita said in an interview.
Subscribe to our Newsletter to increase your edge. Don’t worry about the news anymore, through our newsletter you’ll receive weekly access to what is happening. Join 120,000 other PE professionals today.
“We can grow even in the (COVID-19) constrained environment, let’s put capital on the balance sheet today to accelerate our growth coming out of this,” Miyashita said.
Leafly broke even at the end of last year and expects 2021 and 2022 to be “growth and investment periods,” she said. The company has estimated revenue to rise 19% year-over-year in 2021, followed by a 52% rise in 2022.
Existing Leafly shareholders will own about 72% of the combined company after the deal, which is expected to close in the fourth quarter of this year. Leafly will be listed on the Nasdaq under the ticker symbol “LFLY.”
Blank-check firms like Merida Merger, or special purpose acquisition companies (SPACs), use the capital raised through their initial public offerings to buy and merge with a private company, in a deal that then takes it public.
Source: Reuters
Can’t stop reading? Read more
UBS sells $11bn O’Connor platform to Cantor Fitzgerald in major hedge fund reshuffle
UBS sells $11bn O’Connor platform to Cantor Fitzgerald in major hedge fund reshuffle Cantor...
TPG and Blackstone offer $16bn to take Hologic private in major healthcare bid
TPG and Blackstone offer $16bn to take Hologic private in major healthcare bid TPG and Blackstone...
Eurazeo targets GovTech expansion with majority stake in 3P
Eurazeo targets GovTech expansion with majority stake in 3P Eurazeo has entered exclusive...