MGC Pharmaceuticals has signed a binding term sheet to acquire 100% of Medicinal Cannabis Clinic Pty Ltd, a leading medicinal cannabis clinic in Australia.
MGC Pharmaceuticals, (ASX:MXC), the Europe-based biopharma focused on the development of EU-GMP phytocannabinoid-derived medicines, has just announced that it has signed a binding term sheet with Cannvalate Pty Ltd in order to acquire its wholly-owned subsidiary the company Medicinal Cannabis Clinic Pty Ltd.
MGC will acquire 100% of the operating business, data, and proprietary assets of Medicinal Cannabis Clinic Pty Ltd., a company focused on providing a range of methods to enable patients to access affordable and knowledgeable cannabinoid-prescribing doctors. MGC will incorporate a new wholly-owned Australian subsidiary
A new wholly-owned Australian subsidiary for MGC Pharma will be incorporated to hold all the operating clinic-based assets, data and intellectual property of Medicinal Cannabis Clinic Pty Ltd.
Medicinal Cannabis Clinic was established last year, and has since gone on to become one of Australia's leading medicinal cannabis clinics, helping to facilitate over 4,000 medical consultations. The company is also well-positioned amid the COVID-19 pandemic, thanks to its utilization of video telemedicine practices, which allow patients to consult with doctors and be prescribed cannabinoid medicines without needing to go to the doctor or pharmacy – prescribed medicines are shipped to the patients house.
MGC's newly formed subsidiary will obtain relevant state and federal licenses to allow for the import and distribution of medicinal cannabis products, moving MGC Pharma's Australian supply chain to the new subsidiary and allowing MGC to continue providing increasingly affordable cannabinoid medications though the focused reduction of importation, storage and distribution costs per unit.
The company states in the Press Release that "The acquisition of 100% of the MCC Assets will expand MGC Pharma's direct distribution network and enable a direct supply chain of MGC Pharma's proprietary medicinal cannabis products to customers, cementing the Company's fully vertically integrated Nature-to-Medicine business model."
Consideration due for the acquisition upon completion of settlement conditions includes $400k in cash and $1m in MGC Pharma shares (majority subject to trading restrictions). Settlement of the transaction is to be within 90 days.
Roby Zomer, Co-founder and Managing Director of MGC Pharma, commented: "The acquisition of Medicinal Cannabis Clinics' assets is an important part of our strategy to grow our distribution network and direct supply chain capabilities in both Australia and Internationally. Importantly, with the acquisition of MCC's assets, MGC Pharma will be well on the way to achieving our cashflow breakeven targets. We look forward to integrating MCC's high quality network of clinics"
To learn more about MGC Pharma, visit the company HQ here.
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