Proactive investors Health House International acquires major...

Proactive investors
Health House International acquires major German pharmaceutical company CanPharma
2021-05-13 15:27:00
The acquisition expands the company’s activities into the European Union providing a strong foundation for continued future growth through other potential value accretive acquisitions.




Health House International Ltd (ASX:HHI) is set to expand into Europe’s largest medicinal cannabis market through the acquisition of German medicinal cannabis company, CanPharma GmbH.

The acquisition positions the company as a major force in the market, with a footprint spanning across Australia, the UK and Europe, and exposure to Germany, which is the EU’s largest medicinal cannabis market.

Subject to approval from Health House shareholders, and all conditions of sale being met, Health House will acquire 100% of CanPharma through an all-scrip transaction.

“Globally significant distributor”
As part of the Acquisition, CanPharma founder Dr Henrik Sprengel will remain CEO of CanPharma and be appointed as an executive director of Health House, and CanPharma CFO David Attwood will be appointed group CEO of Health House, assuming overall responsibility for the combined group’s activities including investor-facing functions.

Health House chairman David Wheeler said: “This is a wonderful opportunity and value accretive acquisition for the Health House business, its team and shareholders.

“CanPharma is a quality business with a highly respected team of entrepreneurs and industry specialists.

"The opportunity to engage with CanPharma and to ultimately agree terms to acquire the business is a very significant event for the newly listed Health House and is entirely consistent with its stated ambitions to be a globally significant distributor of medicinal cannabis products.

“We look forward to having Henrik join the board and welcome David to the role of group CEO as we continue to look for opportunities to build the Health House global footprint.”

Acquisition benefits
The completion of the acquisition will allow the consolidated group to fully exploit one of the world’s fastest-growing pharmaceutical sectors.

CanPharma holds a GMP manufacturing licence allowing it to import, manufacture and distribute cannabinoid-based products both in flower and oil extract form.

In addition, the company owns Kalapa Clinic with headquarters in Barcelona, the first medicinal cannabis consultancy in Europe which provides specialist advice to health care professionals and patients around the appropriate use of cannabis-based medicines in treating a range of conditions.

Kalapa Clinic provides a strong position from which to expand into the Spanish market when legislation allows.

CanPharma currently imports and distributes third-party dried flower into Germany, launched its own branded range of extracts in May 2021 and is ideally positioned to access the continued growth in patient numbers throughout Germany.

Additionally, the acquisition expands Health House ́s access to patients, deepening the understanding of patients needs through the generation of data.

Leveraged to growth in global medicinal cannabis
With revenue streams from multiple countries including Australia, the UK and Germany, Health House will provide shareholders with leverage to the growth in the global medicinal cannabis sector.

Dr Sprengel said: “We are delighted to join forces with a strong partner such as Health House and having access to the experience of its blue-chip team and its Australian market-leading distribution platform.

“Together, we are poised to build a winning position in Germany and leverage this blueprint into the rest of the EU to assume a leadership position in Europe, the region with the largest medicinal cannabis potential.”



The indicative timetable for the completion of the transaction.

Transaction details
Subject to shareholder approval, Health House will issue 11,753,061 fully paid ordinary shares in the company as consideration for the sale.

In addition, CanPharma will issue 36 million performance shares to CanPharma shareholders and management in three equal tranches converting into ordinary shares on achievement of the following performance milestones:

12,000,000 Class A performance shares - CanPharma achieving cumulative revenues of €5,000,000 over a 24-month period from the date of completion (completion date); 12,000,000 Class B performance shares - CanPharma achieving cumulative revenues of €10,000,000 over a 24-month period from the completion date; and 12,000,000 Class C performance shares - CanPharma achieving cumulative revenues of €15,000,000 over a 24-month period from the completion date.
A copy of the full terms of the performance shares will be included in the company’s notice of general meeting to be dispatched prior to the end of May 2021.

Health House has also agreed to issue 6,246,939 fully paid ordinary shares in the company in a debt-to-equity swap in settlement of outstanding debt to related parties of CanPharma.