- Control of one of South Africa's first legal dagga growers is changing hands in a deal that values it at R15 million.
- JSE-listed holing company Labat Africa will pay for 75% of Leaf Botanicals in an all-share deal, but with a floor price established for those shares.
- Leaf has permission to produce cannabis for medical use in the Northern Cape.
- The deal means it is now active throughout the dagga market, "from flower to customer", says Labat.
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One of South Africa's first legal producers of cannabis has been valued at R15 million in an acquisition, the details of which were announced on Wednesday.
Labat Africa, a JSE-listed holding company once best known for traffic solutions and big government contracts, said it would pay R11.25 million for a 75% stake in Leaf Botanicals.
Leaf holds a South African Health Products Regulatory Authority (Sahpra) license to produce dagga for medical use in the Northern Cape. It hopes to be a significant export player in that market.
The acquisition will be settled entirely in Labat shares, but the deal sets a floor price on the shares, so that the sellers will receive at least R11.25 million worth of shares, with extra shares to be issued in June next year if the listed company's value falls too far.
Leaf is accredited in both the European Union and the USA, Labat told its shareholders, and expects its second harvest of cannabis this month.
"Leaf Botanicals fits well into the Labat Healthcare segment whose aim is to provide high quality medical cannabis products to a sophisticated and knowledgeable customer base," the company said.
The deal means Labat is now "active in the most significant parts of the cannabis value chain, from flower to customer, thereby ensuring that quality is priority in every part of that chain," it said.
"Labat is pleased to take this next step in ensuring that South Africa takes its place on the world stage in the field of medical cannabis."