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Fire-sale for Namaste?
Posted on Tuesday, 05 February 2019 15:09
Namaste Technologies, the Canadian online retailer of medical cannabis vaporisers and smoking accessories, has kicked off a strategic review after firing its chief executive for alleged securities fraud.
The Toronto-headquartered company said it is in the process of hiring an investment bank to weigh options following a recent expression of interest.
It added there is no definite timeframe to complete the review of a potential corporate transaction, which may or may not lead to a sale.
“Namaste remains in a strong financial position, with cash balances intact, and will continue to execute on its unique and effective business strategy.
“The company will provide an update regarding the outcome of the strategic review process once it has concluded.”
With regards to ousting chief executive Sean Dollinger, the board formed a special committee to investigate an allegation made by a short seller in October 2018.
Shares in Namaste closed down 14.5 per cent at CAD 1.18 (USD 0.90) and a market capitalisation of CAD 321.05 million following the announcement.
The vaporisers, glassware, accessories company operates an e-commerce platform with over 30 websites in more than 20 countries with distribution hubs located around the world.
It has operations in Europe, Australia, Canada and has opened new supply channels into emerging markets, which include Brazil, Mexico and Chile.
Wholly-owned subsidiary Namaste MD operates a vertically integrated patient portal, which provides remote access to healthcare practitioners for the purpose of acquiring a prescription for medical cannabis.
Namaste generated revenue of CAD 18. 56 million in the 12 months to 31st August 2018 (FY 2017: CAD 10.98 million) and widened an annual net loss to CAD 23.23 million (FY 2017: CAD 17.36 million loss).
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