Curaleaf Holdings, Inc. (CURLF) revealed that it has completed the acquisition of Bloom Dispensaries, a single state cannabis operator in Arizona. With this deal, Curaleaf’s retail footprint has reached 13 dispensaries in Arizona and 121 nationwide.
As per the agreed terms, the acquisition had a purchase price of $211 million, on a cash and debt free basis with target working capital. Curaleaf will pay $51 million in cash and the remaining amount through the issuance of three promissory notes due on the first, second, and third anniversary of the closing of the deal.
The acquisition will lead to addition of Bloom’s 2021 revenue of about $66 million and EBITDA margins of more than 40%. Also, Curaleaf will have access to two adjacent cultivation and processing facilities located in north Phoenix.
Executive Comments
The Executive Chairman of Curaleaf, Boris Jordan, said, “Bloom is an excellent strategic fit for Curaleaf as it further expands our capacity and retail footprint in Arizona with an attractive set of assets, enabling us to better serve the state’s $1.4 billion-plus annual market opportunity.”
The CEO of Curaleaf, Joseph Bayern, said, ” Bloom is an ideal asset to expand Curaleaf’s presence in Arizona having built a strong and profitable business by consistently delivering the highest quality products to the market. Arizona represents a significant market opportunity with strong long-term growth potential, and we believe the combination of our two companies will enable Curaleaf to accelerate our growth strategy in the state.”
Analyst’s Recommendation
Recently, Cantor Fitzgerald analyst Pablo Zuanic maintained a Buy rating on Curaleaf with a price target of $16.50 (101.7% upside potential from current levels).
Overall, the Street has a bullish outlook on the marijuana stock with a Strong Buy consensus rating based on 9 Buys and 2 Holds. The average Curaleaf price target of $18.69 implies upside potential of about 128.4% from current levels.
Curaleaf Earnings
The company is expected to report a loss of $0.02 per share for the fourth quarter of 2021. CURLF stock earnings have missed estimates in the past four quarters, and given the disappointing earnings history, it will likely miss estimates again in the fourth quarter.
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