Charlotte’s Web Holdings, Inc. have entered into a definitive arrangement agreement pursuant to which Charlotte’s Web proposes to acquire all of the issued and outstanding subordinate voting shares of Abacus, after conversion of all outstanding proportionate voting shares of Abacus into Abacus Shares. Under the terms of the Arrangement Agreement, shareholders of Abacus will receive 0.85 of a common share of Charlotte’s Web for each Abacus Share held.
This acquisition combines Charlotte’s Web, the market leader in hemp-derived CBD wellness products, with Abacus, the market leader in OTC topical products combining active pharmaceutical ingredients with hemp extract, to create the world’s largest vertically integrated hemp-derived CBD company. For Charlotte’s Web the combination benefits from the current U.S. regulatory environment which favors topical- CBD products within the food/drug/mass (“F/D/M”) channel. For Abacus, the acquisition provides the advantages of joining an established and industry leading platform and benefiting from leading CPG management and brand equity with a low-cost vertical supply chain producing “the world’s most trusted hemp extract™”. The combined entity is anticipated to represent approximately 34.7%3 of U.S. CBD sales within the F/D/M channel. Combined sales for the third quarter of 2019 were $29.1 million.
Since its inception in 2014, Abacus has focused on becoming the leading practitioner and consumer choice for OTC topical medications with active pharmaceutical and natural ingredients, including a cannabinoid-rich hemp extract containing CBD. Abacus currently distributes over 50 SKUs through approximately 12,000 unique doors and 16,500 health-care practitioners. Combined with Charlotte’s Web, the Transaction will reinforce Charlotte’s Web’s leading position in the CBD market, and substantially expand its existing topical offerings and presence in the key F/D/M channel.