The Green Organic Dutchman Holdings Ltd. (OTCQX:TGODF) (CSE:TGOD) and BZAM Holdings, have entered into a binding and definitive share exchange agreement dated October 18, 2022 with BZAM's sole shareholder, pursuant to which TGOD will acquire all of the issued and outstanding common shares of BZAM from the BZAM shareholder, in exchange for common shares of TGOD.
The combination of BZAM and TGOD is expected to deliver at least CA$10 million ($7,25 million) of annualized cost synergies within the first three quarters following completion of the transaction, aiding in the achievement of positive adjusted EBITDA by mid 2023. The combined entity expects to achieve cost synergies in the key areas of cultivation and production, cannabis and product purchasing, sales, marketing and corporate expenses. BZAM's Pitt Meadows, British Columbia facility will also provide TGOD with low-cost THC distillate and extraction capabilities, which is expected to improve cannabis 2.0 product margins. The combined entity expects to share a unified sales force leading to improvements of geographical coverage and increased retail distribution. The transaction is expected to result in a stronger balance sheet and provide the combined entity with access to lower cost capital.
