Following a satisfactory due diligence investigation, holding company Labat has concluded an agreement with the vendors of Ace Genetics to acquire 100% of the shares in and claims against the Western Cape-based cannabis genetics company for R1.8-million.
Effective December 4, the agreement is to be settled through the issue of 1.8-million Labat shares at an issue price of R1 apiece.
Labat’s rationale for the acquisition is to secure a dependable and continuous flow of raw materials to ensure it meets the growth in demand over the coming years.
Ace Genetics, which grows its product in various regions of the Western Cape, has an established capability to supply the entire Labat grow facility with raw materials.
The acquisition also provides Labat with access to the Ace Genetics’ collective 100 years of growing experience. Labat says this is very “attractive” as the vendors are well positioned to assist with the implementation of all Labat’s grow activities and to provide support and assistance with the industrial hemp roll out, which will add significant value to the supply chain.
Ace Genetics has over 100 strains and substrains under cultivation with tetrahydrocannabinol and cannabidiol levels of up to 33% and up to 20%, respectively, and is rapidly becoming a well-established genetics company in Africa. The company also has a large number of interested customers in the US, Canada and Europe wanting to procure its seeds and cuttings.
Further, the acquisition provides Labat a reliable and credible genetics partner with a group of experts in the cannabis industry. These experts, says Labat, are committed to ensuring South Africa takes its “rightful place” on the world stage in the field of cannabis innovation and scientific excellence.