US (CO): Charlotte's Web acquires Abacus Health Products

Charlotte’s Web Holdings and Abacus Health Products have completed the previously-announced plan of arrangement. Pursuant to the Arrangement, Charlotte’s Web acquired all the issued and outstanding subordinate voting shares of Abacus. "All the outstanding proportionate voting shares of Abacus were converted into Abacus Shares prior to closing of the Arrangement," the team with the company explains. "Pursuant to the Arrangement, holders of Abacus Shares received 0.85 (the “Exchange Ratio”) of a common share of Charlotte’s Web for each Abacus Share held at the time of closing." 

Joining the Charlotte’s Web family of brands are Abacus’ consumer brands CBD MEDIC and Harmony Hemp, and for professional practitioners, Abacus’ CBD CLINIC brand. Substantial product cross selling opportunities are available through each company’s respective distribution network. Starting in July, multiple Abacus topical products will be available for purchase through Charlotte’s Web’s leading Direct to the Consumer (DTC) ecommerce platform.

Perry Antelman has been the CEO of Abacus since 2016 and will join Charlotte’s Web, effective today, as Executive Vice President and President of Topicals.

Following the closing of this acquisition, on June 11, 2020, Charlotte’s Web has 90,287,520 Common Shares outstanding and 92,455.5775 Proportionate Voting Shares convertible at 400:1, for an effective equivalent of 127,269,751 aggregate Common Shares outstanding.

With the completion of the Arrangement, the Abacus Shares and common share purchase warrants of Abacus listed under the symbol “ABCS.WT” on the Canadian Securities Exchange (the “Abacus Warrants”) are expected to be de-listed from the Canadian Securities Exchange at the close of trading on or about June 11, 2020. On close of the Arrangement, each Abacus Warrant outstanding immediately prior to closing was exchanged for a common share purchase warrant of Charlotte’s Web (the “Replacement Warrants”) that entitles the holder to acquire common shares of Charlotte’s Web in lieu of Abacus Shares, subject to adjustment in number and exercise price to give effect to the Exchange Ratio. Charlotte’s Web has applied to list the Replacement Warrants on the Toronto Stock Exchange (the “TSX”) and it is anticipated that, subject to satisfaction of the TSX listing requirements, the Replacement Warrants will begin trading on the TSX under the symbol “CWEB.WS” at market open on or about June 15, 2020.

In order to receive the consideration in exchange for their Abacus Shares, registered shareholders must complete, sign, date and return the Letter of Transmittal that was mailed to each registered shareholder of Abacus. The Letter of Transmittal is also available from Abacus’ depositary, Odyssey Trust Company. Non-registered holders of Abacus Shares whose Abacus Shares are registered in the name of a broker, investment dealer, bank, trust company, trustee or other intermediary or nominee should contact that intermediary or nominee for assistance in depositing their Abacus Shares and should follow instructions of such intermediary or nominee in order to deposit their Abacus Shares.