Harvest Health & Recreation Inc (OTCMKTS:HRVSF) has signed a definitive merger accord to takeover Interurban Capital Group, Inc for $85.8 million. The company will issue 309,452 multiple voting shares and assumes a debt of $19.1 million, which will be converted into 205,594 multiple voting shares. The assets of Interurban Capital comprise indirect and direct licenses. Interurban Capital holds rights to takeover entities together with licenses in Washington, Iowa, and California.
Greater financial flexibility
Steve White, CEO of Harvest Health said the company is pleased to welcome Heart dispensaries into its family. Following the merger with Interurban Capital, Harvest Health gets access to funds. Also, the new set of shareholders provides greater financial flexibility to Harvest Health. It will get access to more resources for investment in key markets that comprise Pennsylvania, Maryland, Florida, and Arizona.
Harvest Health increases the footprint
The merger is subject to the receipt of regulatory nod and waiver or satisfactory closure of the customary conditions for the transactions. Following the merger, Harvest Health will increase its footprint by the addition of 7 potential retail licenses in California, three open retail locations, two open retail locations in Iowa, and five open retail locations in Washington.
Changes in board and management
To enhance shareholder value in the long term, the company made certain changes in its executive team and simplifies its business model. Executive Chairman – Jason Vedadi at Harvest Health relinquished his role and also resigned from the board. This change came into effect on March 11, 2020. However, he will continue as a strategic advisor to the company. Mr. White will head the executive team at Harvest Health.
Jason said he would help Harvest Health to transition into a multi-state cannabis firm. With the strength of the management team at Interurban Capital and on closing the financing, Harvest Health is better positioned to continue development efforts. He said it is time for him to leave the company and allow it to grow under the leadership of Mr. White. Jason will continue to provide advisory services depending on the need.
Mark Barnard, the current board member, will take charge as the chairman of the board. His previous stints include executive roles at Unilever and Diageo PLC.