Medicinal cannabis company AusCann Group Holdings has bought in to the animal health sector after announcing its acquisition of NSW business CannPal Animal Therapeutics.
Based in Wangara, AusCann is focused on developing cannabinoid-based medicines within Australia and internationally.
Its first products, medicinal cannabis capsules, launched in Australia earlier this year.
The business has entered into a scheme implementation deed with CannPal, based in Double Bay, where AusCann will acquire all of the shares in CannPal for 18.4 cents per share, or $17.5 million.
The combined group will have a market capitalisation of about $56 million.
AusCann says the businesses will be able to leverage off each other’s research and technology in both human and animal health.
Chairman Max Johnston said the combined business would also have the financial resources to commercialise its products.
“The complementary nature of developing new health solutions for both human and animal and creating a much larger addressable market makes this combination a game changer for both companies,” he said.
“The combined resources position the new company well to take a leadership position within this new health industry sector.”
The CannPal board has unanimously recommended shareholders vote in favour of the deal, which is also subject to court approvals.
The group's largest shareholder, Merchant Group's Merchant Opportunities Fund, intends to vote in favour of the scheme.
CannPal chairman Geoff Starr said the merged business would have stronger commercial pathways.
“The synergies around local and overseas market knowledge and research and development know-how will enable faster to market solutions,” he said.
“It represents a unique and compelling value proposition for both companies.”
The combined group would have two products already in market, with two more expected to launch within the next 12 months.