MediPharm Labs Corp. (TSX: LABS) has entered into a Share Purchase Agreement with OneLife Botanicals PTY for the sale of MediPharm Labs Australia Pty Ltd, for a minimum value of $6.9M AUD ($6.2M CAD).
The Agreement is subject to routine conditions and is anticipated to close within 90 days.
The Agreement includes the assets, specialized licensing, operational knowledge, and Australian and New Zealand customers currently served from that facility.
All international contracts outside of Australia and New Zealand will remain with MediPharm Labs and be serviced from the MediPharm Labs Barrie GMP facility.
OneLife Botanicals has plans to launch OTC CBD products across Australia.
Purchasing the MediPharm Labs Australian facility expedites OneLife Botanicals' timing to commercialization.
OneLife Botanicals will also enter into a transition services agreement to allow for the two companies to smoothly transition products and services produced in the facility, and to work together on future commercial opportunities.
"This sale represents a major milestone for MediPharm Labs as it continues to focus on rightsizing the business to achieve profitability. As we look to maintain our strong cash balance, this transaction paired with corporate restructuring completed in June 2022 should allow us to reduce our quarterly burn rate as we improve sales.
David Pidduck, CEO of MediPharm Labs.
"This purchase aligns and expedites the strategic aim of our organization to produce high quality medicinal cannabis products by integrating manufacturing into the end-to-end supply chain. The integration of a fully operational facility brings forward our objectives to take our products and brand to the market.
Our company undertook extensive research in considering this important acquisition and is highly confident about the capabilities and capacity of the operation to manufacture products in accordance with all compliance and quality standards.
The integration of this business with our existing cultivation facility facilitates savings in capital investment, access to operational efficiencies and establishes us as a significant supplier in the Australian medicinal cannabis industry.
We intend to build on the existing customer base and develop additional product distribution opportunities to become a formidable participant in the market."
OneLife Botanicals CEO Andrew Grant.