The Valens Company closes C$24.9M deal for edibles manufacturer LYF Food Technologies
LYF produces chocolate, confectionery, baked and health food cannabis-infused edibles. The group offers white label and private label services and a comprehensive portfolio of in-house brands.
Kelowna-based Valens acquired LYF for C$24.9 million, plus about C$17.5 million in post-closing consideration, subject to achieving certain earn-out EBITDA milestones.
The company told shareholders that it has accelerated its footprint in the edibles category, which is one of the fastest-growing segments of the Cannabis 2.0 and 3.0 markets. Valens now has the platform to produce a wide range of edible products in various formats and doses, as well as additional product development and manufacturing capability, thanks to LYF’s purpose-built, 10,500 square foot manufacturing facility, just minutes away from the Valens headquarters.
In the first quarter of 2021, Valens and LYF launched edible products with shared partners A1 Cannabis Co and Verse Cannabis. In partnership with A1 Cannabis, LYF launched the Summit Wild Berry Soft Chews, made with real-fruit juice, no added colours or flavours and 5mg of THC per soft chew. Additionally, The Valens Company and Verse Cannabis launched Verse Soft Chews, a new line of edible formulations.
The Verse Baked Apple Soft Chews are now available in Alberta and are expected to start sales shortly in BC and Ontario, while the Verse Sour Medley Soft Chews will be on the market in Alberta and BC in the coming weeks.
Valens CEO Tyler Robson told investors that the acquisition will strengthen its manufacturing leadership position, thanks to LYF’s confectionary expertise and broad network of partners and retailers.
“The closing of the LYF acquisition, and the addition of their leading edibles platform, signifies the completion of a key milestone in our strategy to drive SKU growth in new product categories and maximize market share gains across the country,” Robson said in a statement.
“We have already begun diversifying our product offering with the launch of various soft chews manufactured in LYF's facility, and we have a strong pipeline of new innovative edible products we believe will increase both quality and variety in the existing edibles segment in Canada today."
LYF’s co-founders Paolo Pero and Matthew Amado added that the team is “ready to hit the ground running” as a unified manufacturing force in the Canadian recreational market.
“Our shared passion for putting consumers at the forefront of product development, formulation and commercialization will be demonstrated as we begin rolling out various edible products that the Canadian market has never seen before,” the two co-founders said in a statement.
Valens said it expects to ramp up shipments of edible products to provincial retailers in the coming weeks, including existing SKUs such as Citizen Stash Strawberry Mac gummies from LYF's white label agreement with Experion Biotechnologies Inc. It also plans to launch an assortment of unique, consumer-driven edible products into the market in 2Q.