US (NV): Australis Capital to acquire ALPS

Australis Capital and ALPS have entered into a non-binding term sheet whereby AUSA is to acquire 51% of the issued and outstanding shares of ALPS, with an option to purchase the remaining 49%.  

"ALPS is and has continued to be a profitable and now rapidly growing global leader in design, construction management and post-commissioning services for horticultural facilities (greenhouses, indoor, hoop house and outdoor facilities), enabling its clients to produce high-quality, low-cost cannabis crops," Australis team explains.

"ALPS is also a world leader with respect to design and construction of cultivation facilities for other plants including mushrooms, fruits, vegetables, flowers and other varietals. ALPS provides comprehensive expertise and support to clients from the initiation of the business concept all the way through to operational success."

"We anticipate that this transaction, upon its completion, will be game changing and immediately accretive, and marks the first and crucial step in the transformation of AUSA to become the Company it was always meant to be: a profitable and rapidly growing MSO," said Dr. Duke Fu, Interim CEO of AUSA. "We believe that through ALPS we will be able to secure a supply of reliable and high-quality input material to fuel our multi-state roll-out, while at the same time generating free cash flow to accelerate the growth of our business. This is what we promised AUSA shareholders, and this is what we are executing on. Rapidly."

Dr. Fu. continued, "The transaction terms combine a relatively small up-front consideration with a phased and back-end loaded earn-out based on aggressive revenue and EBITDA targets. This structure fully aligns ALPS and its principals with the success of AUSA, creating significant potential upside to generate shareholder value."

Avi Geller, board member and member of AUSA's Compensation and Nominating Committee, stated, "We conducted a quick but thorough search for a new CEO and interviewed an impressive roster of candidates for the role put forward by a search firm who had conducted many prior C-level executive searches for cannabis companies. In the end, we decided to nominate Terry as he brings unsurpassed knowledge of the industry, a clear vision as to what it takes to succeed, as well as the skills and network to execute on the plan. Furthermore, Terry has a deeply seated drive to succeed, incredible energy, strong leadership skills and commands the loyalty of some of the best and brightest in the industry. Finally, Terry has a very deep understanding of the U.S. cannabis space, which, supported by Duke, newly appointed CFO Jon Paul and others, will be a great asset to AUSA's strategy roll-out going forward."

Mr. Geller continued, "We are also fortunate to retain Dr. Duke Fu.  Duke has an exemplary track record in building successful companies." Mr. Geller added "His focus as COO going forward will be to drive organic growth, optimizing the returns on our assets, while implementing on our capital-light strategy. We are very pleased that Terry and Duke have agreed to take on these crucial roles, and the board looks forward to supporting the team as they take AUSA to the next level."

Terry Booth, Principal of ALPS and CEO designate for AUSA, added, "With yesterday's announcement of the acquisition of Green Therapeutics, we now have assembled two foundational pieces to execute on our aggressive growth strategy. Combining the industry's pre-eminent cultivation experts with the award-winning brands and operations of Green Therapeutics, and Mr. Natural provides us with the ability to rapidly scale our brands and accelerate value creation. This combination is exceptionally hard to emulate, providing significant and sustainable competitive advantages that clearly differentiate AUSA from the rest of the industry."

"We anticipate that this transaction, upon its completion, will be game changing and immediately accretive, and marks the first and crucial step in the transformation of AUSA to become the Company it was always meant to be: a profitable and rapidly growing MSO," said Dr. Duke Fu, Interim CEO of AUSA. "We believe that through ALPS we will be able to secure a supply of reliable and high-quality input material to fuel our multi-state roll-out, while at the same time generating free cash flow to accelerate the growth of our business. This is what we promised AUSA shareholders, and this is what we are executing on. Rapidly."

Dr. Fu. continued, "The transaction terms combine a relatively small up-front consideration with a phased and back-end loaded earn-out based on aggressive revenue and EBITDA targets. This structure fully aligns ALPS and its principals with the success of AUSA, creating significant potential upside to generate shareholder value."

Dr. Fu added, "Terry is a capital markets legend with the track record of building one of the preeminent companies in the cannabis industry. He is driven by his passion for the medical benefits of cannabis and the right of adults to use cannabis recreationally. I am very impressed with his deep knowledge of and passion for the industry, and I look forward to closely working with him to deliver on the promises made to our shareholders."

Avi Geller, board member and member of AUSA's Compensation and Nominating Committee, stated, "We conducted a quick but thorough search for a new CEO and interviewed an impressive roster of candidates for the role put forward by a search firm who had conducted many prior C-level executive searches for cannabis companies. In the end, we decided to nominate Terry as he brings unsurpassed knowledge of the industry, a clear vision as to what it takes to succeed, as well as the skills and network to execute on the plan. Furthermore, Terry has a deeply seated drive to succeed, incredible energy, strong leadership skills and commands the loyalty of some of the best and brightest in the industry. Finally, Terry has a very deep understanding of the U.S. cannabis space, which, supported by Duke, newly appointed CFO Jon Paul and others, will be a great asset to AUSA's strategy roll-out going forward."

Mr. Geller continued, "We are also fortunate to retain Dr. Duke Fu.  Duke has an exemplary track record in building successful companies," Mr. Geller added "His focus as COO going forward will be to drive organic growth, optimizing the returns on our assets, while implementing on our capital-light strategy. We are very pleased that Terry and Duke have agreed to take on these crucial roles, and the board looks forward to supporting the team as they take AUSA to the next level."

Terry Booth, Principal of ALPS and CEO designate for AUSA, added, "With yesterday's announcement of the acquisition of Green Therapeutics, we now have assembled two foundational pieces to execute on our aggressive growth strategy. Combining the industry's pre-eminent cultivation experts with the award-winning brands and operations of Green Therapeutics, and Mr. Natural provides us with the ability to rapidly scale our brands and accelerate value creation. This combination is exceptionally hard to emulate, providing significant and sustainable competitive advantages that clearly differentiate AUSA from the rest of the industry."

For more information:
Australis Capital
376 E Warm Springs Rd.
Suite 190
Las Vegas, NV 89119
Phone: 1 800.898.0648
ir@ausa-corp.com  
ausa-corp.com  


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