SYDNEY: Australian medicinal cannabis company Little Green Pharma Ltd (ASX: LGP) has entered into a binding agreement to acquire 100% of rival Cannatrek Ltd via a scheme of arrangement, the companies announced on Wednesday.
The all-scrip transaction will see Cannatrek shareholders receive 1.835806 new LGP shares and 0.727502 new contingent value (CV) shares for each Cannatrek share held. Upon completion, Cannatrek shareholders are expected to own approximately 60.5% of the combined entity, with existing LGP shareholders holding 39.5%. The CV shares provide a mechanism to adjust the final ownership split based on the settlement of certain contingent liabilities over a two-year period, which could increase Cannatrek shareholders’ stake to a maximum of 68.2%.
The merger will create one of the largest vertically integrated medicinal cannabis operators in Australia and Europe, with combined pro forma revenue of A$112.3 million and adjusted EBITDA of A$13.0 million for the 2025 financial year.
“This transaction will ensure the combined group emerges as one of the largest and most vertically integrated medicinal cannabis businesses globally,” said LGP Managing Director Paul Long, who is set to become Group CEO of the merged company.
Cannatrek Chair Brent Dennison, who will assume the role of Chair of the combined group, said the merger would accelerate growth in LGP’s European operations while strengthening profitability in Australia.
The deal brings together LGP’s European cultivation and distribution footprint – including what it says is the largest production facility in Europe – with Cannatrek’s Australian manufacturing, clinic, and digital platform operations. The companies identified significant synergy opportunities, including shared use of GMP-certified manufacturing capacity, combined clinic networks, and optimized supply chains.
The transaction is subject to approval by shareholders of both companies, court approval, and other customary conditions. Scheme meetings are expected to be held on April 2, 2026, with implementation targeted for May 1, 2026.
Both boards have unanimously recommended the deal in the absence of a superior proposal.
Hamilton Locke and Canaccord Genuity advised LGP. K&L Gates and Intrinsic Partners advised Cannatrek.
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