Please ensure Javascript is enabled for purposes of website accessibility

Charlotte's Web Closes Abacus Health Acquisition

By Eric Volkman – Jun 12, 2020 at 8:33AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's paying around $73 million to acquire the Canadian CBD products company.

A recent asset purchase by Charlotte's Web Holdings (CWBHF 7.50%) is now in the books. The company announced Thursday that its buyout of Abacus Health Products has closed.

The two companies announced the all-stock deal in March, agreeing that Abacus Health investors would receive 0.85 of one Charlotte's Web common share in exchange for each share they held of their company. All told, this valued Abacus at roughly 99 million Canadian dollars ($73 million).

US currency in the shape of a marijuana leaf.

Image source: Getty Images.

Like Charlotte's Web, Abacus Health, whose stock was listed on the Canadian Securities Exchange before the acquisition, concentrates on the manufacture of cannabidiol (CBD) products. It produces and sells both medical and recreational products infused with the ingredient. With its new asset, Charlotte's Web is notably raising its presence in the CBD segment.

"The addition of Abacus Health cements a market leading position in both topical and ingestible products in the CBD category, representing approximately 33% market share of the U.S. CBD food/drug/mass retail channel," Charlotte's Web said in the press release heralding the closure of the deal.

The company said that several of Abacus' topicals would be made available through Charlotte's Web's e-commerce platform.

In the wake of the closing, Charlotte's Web said, it now has almost 90.3 million shares of its common stock outstanding. This represents a significant rise from the recent tally of just under 72 million, as reported by Yahoo! Finance. Abacus' shares on the Canadian Securities Exchange were expected to have been delisted.

Investors didn't catch much of a buzz from this deal. Charlotte's Web shares closed down by nearly 9.7% on Thursday, a worse performance than that of the broader equities market and many peer cannabis stocks.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Charlotte's Web. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Charlotte's Web Holdings, Inc. Stock Quote
Charlotte's Web Holdings, Inc.
CWBHF
$0.43 (7.50%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
331%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.