UK based CBD company Vitality has been bought in a deal worth up to £10.2m in the latest sign the burgeoning sector. Vitality CBD was established in 2018 and quickly established itself as one of the leaders in the UK market, selling its products through major retailers including Boots, Tesco, Asda and Lloyds Pharmacy.
The UK’s cannabinoid sector is estimated to have annual sales of nearly £700m, making it the world’s second-largest consumer cannabinoids market. The European market has been forecast to be worth £3bn by 2025.
Vitality has been acquired by Yooma Wellness, a Canadian group which is using its dual-listing on the Canadian and Aquis stock exchanges to help support its buy-and-build strategy. Nikhil Nathwani, co-founder and managing director, said: “CBD is a growing industry not only in the UK but globally, and the acquisition positions us nicely to be able to continue to expand and grow the business.”
Vitality generated revenues of £1.6m in the first half of 2021 and earnings of £300,000. It will focus is on growing revenue and margin as well as expanding distribution to other European and international markets.
Yooma Wellness markets a portfolio of CBD and wellness brands and the purchase of Vitality expands its customer base and distribution network for its existing European-focused brands, including the MYO plant nutrition platform. Lorne Abony, chairman of Yooma, said: “Completing the acquisition of Vitality is the first step of the strategic plan the company outlined to investors at the time of our UK financing and dual-listing – to buy and build companies globally, focused on materially increasing the company’s top-line revenue, leveraging the group’s integrated supply chain to drive margin growth, and expanding distribution for the existing product portfolio.”
The deal comprises an initial £4m cash and £4.2m in shares, with consideration of up to £2m based on revenue milestones achieved in the 2022 financial year. Vitality’s sales would need to be more than £5m for additional payments and its maximum return requires revenues of more than £8m.
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