NEW YORK-- Ayr Wellness Inc., a vertically integrated cannabis multi-state operator, has entered into a binding letter of intent to acquire PA Natural Medicine LLC, an operator of three licensed retail dispensaries, deepening Ayr’s presence in the rapidly growing medical market in the commonwealth of Pennsylvania.
“Our goal across our footprint is to develop scale and meaningful presence in each of our markets. Today’s announcement builds on our already strong position in Pennsylvania, where we have built a tremendous foundation since entering the state just a few months ago. Our three Ayr Wellness stores, open an average of less than six months, are run-rating at over $7 million in annualized revenue per dispensary and our cultivation facilities are producing some of the best reviewed flower in the state,” said Jonathan Sandelman, Ayr Wellness founder, chairman and CEO. “ With such great momentum in this market, we are expanding our retail presence with the acquisition of PA Naturals, a three-store operation in central Pennsylvania with some of the best operating metrics in the state and a complementary footprint to our existing six licenses. We look forward to welcoming the great people of PA Naturals to the Ayr team."
PA Naturals has locations in the college towns of Bloomsburg and State College, as well as Selinsgrove, and operates under the retail banner “Nature’s Medicine.” The acquisition is expected to close in Q4 2021 and the company expects to rebrand the dispensaries under the Ayr Wellness banner shortly after closing.
Ayr intends to purchase 100% of the membership interests of PA Natural. The terms of the transaction include upfront consideration of $80 million, made up of $20 million in stock, $25 million in seller notes and $35 million in cash. An earn-out of up to $40 million, based on 2021 EBITDA hurdles, is payable in Q1 2022 and includes a maximum additional cash payment of $10 million with the remainder paid in stock and notes.
The acquisition is subject to customary closing conditions and regulatory approvals. Operations of PA Naturals will remain unchanged pending the closing.