VANCOUVER, BC, July 12, 2021 /CNW/ - Kiaro Holdings Corp. (TSXV: KO) ("Kiaro" or the "Company"), a national omni-channel cannabis retailer and wholesale distributor, is pleased to announce the Company has completed the acquisition of all issued and outstanding shares of Sculthorp SEO Inc. ("Cozy Cannabis"), which currently operates a highly desirable retail location in Toronto and three eCommerce business platforms (the "Transaction"). Completion of the Transaction will launch Kiaro into the Ontario retail cannabis market, and create a new digital portfolio focused on the supply of high-quality consumption accessories to Canadian, American and Australian consumers.
The total purchase price in connection with the Transaction of $1,350,000 has been settled by the issuance of $850,000 in common shares of Kiaro ("Shares") at a price of $0.135 per Share, and $500,000 in cash, subject to a $50,000 holdback for certain performance and transitionary matters and customary adjustments. Subject to and in accordance with applicable securities laws, the Shares will be subject to transfer restrictions releasable in tranches over the 18 months following closing.
Key Transaction Highlights
Provides Kiaro a strategic entry into the U.S. and Australian market: The Transaction provides Kiaro with new revenue segments from the U.S. and Australian jurisdictions with consumption accessory sales. As a result of the Transaction, Kiaro anticipates being well-positioned to take advantage of any future U.S. and Australia advances towards federal legalization.
Solidifies Kiaro's strategic entry into Ontario: The prime location at 1428 Dundas St W in the heart of Trinity Bellwoods neighborhood of Toronto is Kiaro's first brick and mortar store in the Ontario cannabis retail market. The location will also serve as the eCommerce hub for Ontario thereby strengthening the Company's best-in-class omni-channel retail approach.
Expands the Company's eCommerce reach both nationally and internationally: The addition of Vaped.ca, Vaped.com, and VaporizersDirect.com.au, complements Kiaro's current eCommerce platform and is expected to strengthen Kiaro's technology-forward approach. As part of the Transaction, members of the Cozy Cannabis executive team will provide transitionary services to support the continued growth of both the existing eCommerce platform and the newly acquired consumption accessory eCommerce sites.
- Executes on the plan of revenue and EBITDA growth through acquisition: The portfolio is expected to add to Kiaro's cash generating cannabis retail assets while providing additional high margin revenue streams.
In connection with the Transaction, Kiaro is excited to announce that Christian Sculthorp, founder and CEO of Cozy Cannabis, will join the Kiaro team as Director of eCommerce for a minimum period of six months. Mr. Sculthorp will oversee the integration of the eCommerce sites into the Company and will use his expertise and entrepreneurial drive to expand Kiaro's global digital footprint.
Daniel Petrov, Chief Executive Officer of Kiaro stated, "Omni-channel excellence has always been a focus for Kiaro with one of the first private regulated cannabis eCommerce sites in the country. With this acquisition, Kiaro adds international exposure and operational expertise with a high margin consumption accessory e-Commerce portfolio."
Eleanor Lynch, Kiaro's Chief Operating Officer, adds "I'm excited to be back in my home province of Ontario serving the historic neighborhood of Trinity Bellwoods with our first Ontario location. The Kiaro team is ready to scale our successful model nationally by growing our footprint of brick and mortar retail stores, and leveraging our success of same store revenue growth seen in this years last fiscal quarter of 78%."
The Transaction is subject to the final approval of the TSX Venture Exchange.