FRONT STORY US
Curaleaf raises US$400m equity
Cannabis grower sprouts roots on Canadian exchange
The cannabis craze continues to manifest
itself in some creative transactions.
US grower and dispensary operator
CURALEAF debuted on the Canadian Securities
Exchange after raising C$520m (US$400m)
of equity, the largest-ever initial
institutional raising by a cannabis company
globally.
In a tough start in a session that saw big
cannabis stocks take a hit, Curaleaf shares
closed CSE trading at C$7.30, 36.4% below
the C$11.47 price set on the earlier sale of
45.4m new shares to institutional
investors.
“The markets are volatile,” Curaleaf CEO
*OSEPHû,USARDIûTOLDû)&2ûh4HISûISûOURûlRSTûDAYû
of trading, not our last.”
By midday on Friday, Curaleaf shares had
rebounded to C$11.44.
GMP Securities and Canaccord Genuity were
co-lead agents on the private placement,
part of a reverse takeover (RTO) by Curaleaf
of Canadian junior miner Lead Ventures.
#URALEAF ûHEADQUARTEREDûINû7AKElELD û
Massachusetts and operating 28 cannabis
dispensaries in 12 US states, is now pursuing
a US OTC stock listing to add liquidity,
Lusardi said.
“Because we’re a US-touching, touching-
the-plant business, we could not list on a US
exchange,” Lusardi said.
More than 100 institutions spanning US,
Canada and Europe participated in the stock
sale, despite the regulatory workaround.
h4HISûISûDElNITELYûAûNEWûINDUSTRY vûSAIDû
Lusardi. “The level of understanding certainly
varied, depending on the institution and
whether they had invested in the sector before.”
GMP and Canaccord increased the offering
size from a US$100m initial target, a banker
involved in the process previously told IFR.
Curaleaf is just the latest US cannabis grower
to list on the CSE. MedMen Enterprises,
Charlotte’s Web and Green Thumb Industries
have all raised money through stock sales on the
#3%ûEARLIERûTHISûYEAR ûACCORDINGûTOû2ElNITIVûDATA
Cresco Labs, a vertically integrated grower
based in Chicago, Arizona-based Harvest
Enterprises, and New York-based Acreage
Holdings are among the US companies that
are planning to list on the CSE.
The Canadian federal government
legalised cannabis effective October 17 for
recreational and medicinal uses. Cannabis is
legal to varying degrees in 30 US states, but
remains illegal at a federal level.!SûAûRESULT ûTHEûmOWûOFûCANNABISû
companies listing on US exchanges has been
limited to Canadian growers, such as
Canopy Growth and Aurora Cannabis, both
of which are listed on the NYSE. Tilray and
Cronos are listed on Nasdaq.
Curaleaf has already completed several
acquisitions, including dispensaries in
Arizona for US$7m, another in Nevada for
US$4m, a vertically integrated operator in
Maryland for US$29m, and another
vertically integrated operator in Arizona for
US$27.6m, among others.
The company plans to spend roughly
US$166m of the offering proceeds on those
acquisitions and to buy out minority investors,
and another US$80m on infrastructure build,
the company outlined in its offering prospectus.
“We are going to be disciplined in how we
use the money,” Lusardi told IFR. “We will look
at acquisitions that are accretive to earnings
and at opportunities to grow organically in
ways that create shareholder value.”
In 2017, Curaleaf reported a net loss of
US$3.9m on revenue of US$19.3m. That
compares with the US$4.4bn valuation
achieved on the new listing.
Stephen LaceySlovenia plans to exit NLB through €898m IPO
State has to sell 50% plus one share before end of year but could exit full 75% stake
Roadshows were in London last Monday for
the €515m-€898m London GDR and Ljubljana
Stock Exchange IPO of NOVA LJUBLJANSKA BANKA
as the Slovenian government seeks to meet its
commitment to sell at least 50% plus one share
of the bank before the end of the year.
Price guidance of €51.50-€66.00 per share
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õûPERû'$2ûONûTHEûBASISûOFûlVEû
GDRs per share) was released the previous
Friday, October 26, with books opening on
Monday and running through to 12pm
London time on November 8. The up to 10%
retail offer closes on November 7.
Management also travelled to Frankfurt
and the US last week, having visited Slovenia
and Croatia the previous Friday.
The Slovenian state is aiming to sell its
entire 75% stake in one go, including the 10%
greenshoe, well ahead of the European
Commission mandate to sell out by the end
of 2019, though it may sell as little as half the
bank, hence the wide range for the deal size.
Given the market conditions, and the
Slovenian government’s price sensitivity on an
earlier attempt to sell the bank in the public
markets, the NLB deal would in any other
circumstance most likely opt to wait for better
conditions, but the state has run out of road,
given the European Commission deadline.
The market cap based on the price range is
€1.03bn-€1.32bn, which gives a dividend yield
of 13.8% at the bottom of the range and 10.8%
at the top. There are no close peers, with
investors expected to look at the likes of Erste
Group (€14bn market cap, 4% dividend yield)
or Raiffeisen Bank International (€8bn, 4%).Trading begins in London and Slovenia on
November 14.
An earlier attempt to complete the IPO in
June 2017 valued the bank at €1.1bn-€1.4bn.
However, the deal collapsed when the lead
banks were unable to agree a price range with
the government at the time. Deutsche Bank was
sole global coordinator on that attempt, with JP
Morgan and UBS as joint bookrunners and
Wood & Co as co-lead manager with NLB as
domestic co-lead. An attempt in 2016 was
cancelled at the early look stage.
For this attempt, Deutsche Bank and JP Morgan
are joint global coordinators and joint
bookrunners with Citigroup. Wood & Co is
stabilisation manager and co-lead manager,
with NLB as domestic co-lead manager.
Robert VenesEQUITIES
Australia 82 China 82 India 84 Singapore 84 Austria 85 France 85 Germany 85 Israel 86
Italy 86 Romania 87 UK 87 United States 88 Structured Equity 90