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Mar 5, 2021

The Valens Company Completes Acquisition of Leading Canadian Edibles Manufacturer LYF Food Technologies Inc.

Jeffrey K. Merk, Liam Tracey-Raymont, Francesco Gucciardo and Michael F. Horvat

On March 5, 2021, LYF Food Technologies Inc., a premier edibles manufacturer based in Kelowna, British Columbia with expertise in novel product creation, white label manufacturing and infusion technologies, was acquired by The Valens Company Inc., a leading manufacturer of cannabis products.

The upfront purchase price was C$24.9 million, including the assumption of C$2.9 million in mortgage related debt and the issuance of up to C$22.0 million in common shares of the Company, of which up to C$5.0 million was payable in cash and the remainder payable in common shares of the Company. Up to an additional C$17.5 million is subject to be payable upon the business achieving certain earn-out EBITDA milestones (the “Milestones”). The acquisition is expected to be accretive to the Company's EBITDA and diluted EPS in 2021, and if all of the Milestones are met, the transaction represents an approximate ~4.2x multiple on the last milestone achieved.

Aird & Berlis LLP acted as legal counsel to LYF with a team led by Jeffrey Merk and including Liam Tracey-Raymont (Capital Markets/M&A), Francesco Gucciardo (Tax) and Michael Horvat (Employment & Labour).

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