22nd Century acquires private equity company GVB Biopharma

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22nd Century acquires private equity company GVB Biopharma

22 nd Century Group, Inc. XXII announced the acquisition of privately held GVB Biopharma.

GVB, a contract development and manufacturing organization, provides hemp-derived active ingredients for the pharmaceutical and consumer goods industries worldwide.

The aggregate consideration included the assumption of $4.5 million of debt, GVB's closing costs, and the issuance of 32.9 million unregistered shares of the common stock of the company.

Grant Thornton provided an independent valuation for the 22nd Century.

The legal counsel to GVB was provided by Dorsey Whitney LLP, and 22nd Century's legal counsel was Shulman Rogers PC.

GVB's strengths complement 22 nd Century's existing upstream and downstream value chains, including expertise in cannabinoid receptor science with CannaMetrix, plant research and proprietary genetics through its KeyGene partnership, breeding expertise with Extracts and cultivation capabilities at Needle Rock Farms.

The combination with the 22 nd Century creates a global one-of-a-kind asset to serve the growing hemp cannabis ingredient market.

GVB expects to have revenue of approximately $48 million in the year 2022, a 58% increase year-over-year, a gross margin in excess of 44% and positive cash flow.

James A. Mish, the company's CEO, said that the GVB is a transformational acquisition for the 22 nd century that will allow us to grow our hemp cannabis franchise. GVB is one of the largest suppliers of CBD in the world, with innovative, vertically integrated cannabinoid product manufacturing technologies that drive industry-leading scale and cost-efficiency. The transaction is expected to generate positive cash flow from the acquired assets in the near term, as well as double 22 nd Century's revenue upon closing.

GVB is well-positioned to lead international expansion, including several international joint ventures in Europe in order to co-develop and co-own processing and distribution companies aligned to market needs. GVB currently has offices in the United Kingdom and Brussels.