InterCure (TASE: INCR), which holds 100% of the shares in cannabis company Canndoc, has announced an agreement for its merger into Subversive Real Estate Acquisition REIT LP, a SPAC (special purpose acquisition company) with $225 million cash. The SPAC is traded on the Canadian NEO Exchange, an exchange set up in 2014 for technology-rich Canadian companies. Several cannabis companies are also traded on this exchange. In response to the announcement, InterCure's share price rose 41% in Tel Aviv yesterday to give the company a market cap of NIS 660 million.
The merger values InterCure at $300 million. InterCure intends later on to list the company for trading on Nasdaq as well; this is one of the conditions of the deal.
SPAC deals are structured such that the investors in the company put money into it before they know which company will be acquired, but if they are not happy with the merger deal, they can withdraw from it. The current deal includes a condition whereby it will go ahead only if at least $55 million remains in cash. Yestreday, the SPAC informed InterCure that there were new investors interested in putting in $65 million at the valuation set, $300 million.
InterCure is the leading company in Israel's cannabis sector in terms of market cap, and in its last financials, following substantial growth, it also took first place for revenue (NIS 22.5 million) and for the profitability of its Canndoc subsidiary, which reached 32% of turnover.
At the end of December, InterCure was the first company to export a consignment of Israeli cannabis to Europe, and it is also a leader in imports of cannabis to Israel, through strategic cooperation agreements with leading overseas companies.
InterCure's chairman is former Israeli prime minister Ehud Barak. Its CEO is Alexander Rabinovitch.
Published by Globes, Israel business news - en.globes.co.il - on January 27, 2021
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