M&A: Vireo Growth Inc.

Form Type: 8-K

Filing Date: 2024-12-23

Corporate Action: Merger

Type: New

Accession Number: 000110465924131371

Comments: On December 18, 2024, Vireo Growth Inc. entered into merger agreements for business combinations with Deep Roots Holdings, Inc., Proper Holdings Management, Inc., and WholesomeCo, Inc. Each merger is an all-share transaction, with no contingencies on the completion of the other mergers. The estimated consideration for each merger is based on multiples of 2024 Reference EBITDA, with a share price reference of $0.52 for the Company’s subordinate voting shares. Earnout payments may be made post-2026 based on performance metrics. Each merger agreement includes provisions for clawbacks of up to 50% of upfront consideration under specific performance conditions. Lock-up agreements will apply for up to 33 months for stockholders of the merging companies. A Schedule 14C information statement will be prepared for stockholder approval of share issuances resulting from the mergers, expected to be approved by written consent.

Document Link: View Document

Additional details:

Merger Entities: Deep Roots Holdings, Inc., Proper Holdings Management, Inc., WholesomeCo, Inc.

Reference Ebitda: {"Deep Roots":"$31.0 million","Proper":"$31.0 million","Wholesome":"$16.0 million"}

Share Reference Price: $0.52

Earnout Conditions: Earnout payments to former stockholders based on Adjusted EBITDA growth compared to Reference EBITDA, with performance targets set for post-2026.

Lock Up Period: Up to 33 months for stockholders with tiered release schedule.

Termination Fee: {"Deep Roots":"$6,376,240","Proper":"$4,631,012","Wholesome":"$3,394,217"}