Empower Clinics to acquire Medi + Sure Canada in C$3.5M deal strengthening direct-to-consumer testing offering

Empower Clinics Inc (CSE:CBDT) (OTCQB:EPWCF) (FRA:8EC) announced it is acquiring diabetes medical device manufacturer Medi + Sure Canada Inc (Medisure) in a C$3.5 million cash-and-stock deal.

Medisure manufactures products such as diabetic glucose meters and blood sugar tests that are found in over 4,000 pharmacies across Canada.

The company says it has 50,000 end users and unaudited 12-month trailing revenues of C$1.9 million.

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For Vancouver-based Empower, the deal strengthens its direct-to-consumer testing products initiative and expands its overall service offerings to help support development of its KAI Care brand in North America.

“This acquisition will provide an immediate impact on our footprint in Canada and bolster our direct-to-consumer testing products initiative, while expanding the breadth of our overall service offerings on an accelerated basis,” Empower CEO Steven McAuley said in a statement.

“(The) addition of Empower’s financial, marketing and business development resources is expected to significantly expand the success of Medisure within the first year of operations both on the ground and online. In addition to their great products, MediSure also provides us with an immediate and experienced medical device manufacturing, fulfillment and distribution point for all forms of testing products in Canada including Kai Care.”

Medisure’s CEO Mario Cortis added that he was excited to grow the accessibility and reach of Medisure.

“I am fully confident that through Steven’s leadership, the quality of MediSure’s products can be scaled to serve our current customers more effectively and reach many new markets.”

$3.5 million deal

The cash-and-stock deal sees Empower paying C$1 million in cash at closing and a $250,000 performance holdback for an aggregate cash payment of C$1.25 million, and an additional $1.25 million in Empower shares at a price based on the 10-day volume weighted average closing price on the Canadian Securities Exchange.

According to a release, the issuance at the closing of shares having an aggregate value of $1 million at a deemed price per share equal to the 10-day volume weighted average closing price per share on the CSE for the period ending on the last business day prior to the closing, which, at the closing, will be issued into escrow with an escrow agent appointed by Empower, and will vest in quarterly instalments over 24 months from the closing.

Empower will also provide a $25,000 good faith refundable deposit within 72 hours of execution of the term sheet.

The deal is expected to close by July 15.

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Story by ProactiveInvestors