Aphria Inc.(TSX: APHA) (NYSE: APHA) has announced this morning that the company plans to invest a total of C$72 million dollars into their German acquisition target CC Pharma GmbH (“CC Pharma”). If the proper regulatory bodies accept the terms of the acquisition, then Aphria Inc. will gain a pharmaceutical distribution chain that owns over 13,000 pharmacies in Germany.
CC Pharma already produces over €200 million a year in annual revenue by means of the distribution of pharmaceuticals in Germany. As Germany’s legislation loosens in favor of the legalization of medicinal cannabis, Aphria will look to take advantage of the country’s demand for premium cannabinoid-based products.
In the past the two companies have already agreed to a supply agreement where Aphria would send 1,200kg of medicinal cannabis to CC Pharma. In order to meet the growing demand Aphria is constructing a state-of-the-art GMP (Good Manufacturing Practices) certified cannabis storage facility in Germany.
Under the terms of the agreement Aphria will pay €24.5 million in cash to CC Pharma once the deal has closed and an additional €23.5 milliononce CC Pharma meets certain goals.
Vic Neufeld, CEO of Aphria, gave this statement in the press release:
“This acquisition strengthens our foothold in Germany, one of the most highly sought-after medical cannabis markets in the world. CC Pharma is cash-flow positive and has significant experience with regulatory requirements and international logistics.”