Ceres, Parallel Call Off SPAC Deal - Grow Life 420

Ceres, Parallel Call Off SPAC Deal

October 01, 2021

#KahliBuds #MMJ #CBD #THC

Ceres Acquisition Corp. (NEO: CERE.U)(OTCQX: CERAF) has decided to call off the Business Combination Agreement dated February 21, 2021, with SH Parent, Inc. also known as Parallel. Ceres said it plans to continue looking for another company for its qualifying transaction before the deadline of March 3, 2022, unless of course that date is extended, with shareholder approval.

Premium Price

Back in February, the deal was valuing Parallel (formerly Surterra Wellness) at an implied enterprise value of $1.884 billion saying the expected net revenues would $447 million in 2021. The expected pro forma cash on hand was to be $430 million at the close, including the $225 million from the PIPE and $120 million of cash held in Ceres’ escrow account assuming no redemptions. At the time, the deal was expected to close in Summer 2021.

Parallel has ongoing operations in four medical and adult-use markets with approximately 50 locations nationwide, including 42 retail stores, and cultivation and manufacturing sites. The company has retail brands using the name Surterra Wellness in Floridagoodblend in Texas; New England Treatment Access (NETA) in Massachusetts; and The Apothecary Shoppe in Nevada. Parallel also has a license under its goodblend Pennsylvania brand for vertically integrated operations and up to six retail locations, in addition to a medical cannabis research partnership with the University of Pittsburgh School of Medicine. Subject to regulatory approval, Parallel said it will add Illinois as a sixth market when its announced acquisition of six Windy City Cannabis licenses is complete.

No Confidence

Reuters reported that “several investors had lost confidence in Parallel’s ability to deliver on lofty financial projections it provided in February when the merger was announced.” With just 42 stores and in some small markets like Texas, the ability to deliver more revenue than companies twice its size had to give investors pause. Reuters also reported that several investors who had committed to the $225 million private investment had refused to invest over the following months. Since Parallel is a private company, actual revenue figures aren’t disclosed. Various estimates for revenues at Parallel from market data sources have ranged between $36 million a year to $74 million a year, a far cry from $447 million a year.

 

 

The post Ceres, Parallel Call Off SPAC Deal appeared first on Green Market Report.



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Debra Borchardt, KahliBuds, 420GrowLife

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