Cannabis operator TerrAscend made a huge move last week when it completed a non-brokered private placement. It turned out to be larger than expected, becoming an oversubscribed offering that gave the company more than $175 million in gross proceeds. Four large institutional investors participated, as well as other smaller groups. Provided all of the paperwork is in order, the placement will close before the end of this month.
Wasatch Global, an investment manager based in Utah, was one of the institutional investors that committed to participating in the arrangement. Wasatch has approximately $23.8 billion in assets under management, as of last July, and is 100% owned by employees. In total, the four large firms involved agreed to take 80% of the available offering, which will issue a total of 18,116,623 common shares at a price of $9.68 each. As of 12:30 today, TerrAscend was trading at $13.73 (CAD$17.52).
To help put the offering together, TerrAscend employed the assistance of ATB Capital Markets. Based on the preliminary filing, the offering should close on or about January 26, as long as the Canadian Stock Exchange approves of the arrangement and it meets all standard closing conditions.
Says TerrAscend CEO and Executive Chairman Jason Ackerman, “TerrAscend is strategically building depth and scale in some of the largest and highest growth markets in the U.S. cannabis industry. This financing further solidifies an already strong balance sheet providing the company with ample cash to both accelerate existing expansion plans and simultaneously pursue M&A transactions in additional limited license states.”
The company adds in its release, “TerrAscend’s best-in-class cultivation and manufacturing practices yield consistent, high-quality cannabis, providing industry-leading product selection to both the medical and legal adult-use market. The Company owns a number of synergistic businesses and brands, including The Apothecarium, Ilera Healthcare, State Flower, Valhalla Confections, and Arise Bioscience Inc.”