- Software technology company VPCL (VPC) is looking to buy medicinal cannabis distribution business Health House via an all-share acquisition
- The purchase will see the company change its name from VPCL to Health House International
- If all conditions are met, the purchase is expected to settle in February 2021
- However, the company needs both shareholder and ASX approval for the deal to go through, as VPC has been suspended from trade since October
- In order to return to quotation, the company needs to satisfy listing rules and complete the purchase
- On top of the buy, VPC is aiming to raise $2 million through a public offer at no less than 20 cents per share
- The cash injection will fund future buys and boost the company’s cash reserves
- VPC last traded at 0.4 cents per share in October 2018
VPCL (VPC) has entered agreements to purchase leading international medicinal cannabis distribution business Health House.
The U.K.-listed company exports, imports and distributes medicinal cannabis and pharmaceutical products across Australia and the United Kingdom.
VPC will issue over 115 million shares to Health House vendors. Once the purchase is complete, VPC predicts its assets will increase by around $4 million, while revenue is forecast to jump by $10 million.
Under the agreement, the company will change its name from VPCL to Health House International, while Health House director Mike Rann will join the VPC board, and current director Leanne Graham will retire.
If all conditions are met, the purchase is expected to settle in February 2021.
$2M raise
Additionally, VPC aims to raise $2 million through a public offer at no less than 20 cents per share. Capital Group has been appointed lead manager for the raise.
Funds from the raise will be used for business development, to purchase other complementary businesses, and for working capital.
However, for the Health House buy to go through, shareholders will need to vote on the move. As a result, VPC is expected to hold a general meeting in January 2021. The purchase is also dependent on the company completing satisfactory due diligence, a process which is ongoing.
Currently, VPC shares are suspended from trade, and they won’t return to quotation until the buy goes through. For that to happen, the company needs to satisfy all ASX requirements for admission and quotation — specifically those laid out in chapters one and two of the listing rules.
As a result, there’s a lot on the line — if the buy falls through, VPC says the ASX could delist the company — so the software company has a vested interest in getting the deal over the line.
VPC last traded at 0.4 cents per share in October 2018.