Amir Marketing (AMRK.TA), which owns 36% of the cannabis company BOL Pharma, published today a report according to which BOL has signed an agreement to purchase all the shares of the online pharmacy Telepharma from ‘Fishman Chains’. Telepharma is an online pharmacy that sells medical cannabis products (through Green Pharma), medicines, products for the elderly, pharma products to private customers, and provides home deliveries.
The agreement also includes options to buy Telpharm Pharmaceuticals, which is also wholly owned by Fishman Chains. TelPharm is a company that markets and sells medicine, adult products and other Pharm products, to pharmacies.
In exchange for Telepharma, BOL will pay Fishman Networks an amount of NIS 21 million. This amount is not final, and depends on Telepharma’s shareholders’ equity, which will reflect in Telepharma’s financial statements as of the end of 2021.
In addition, the transaction includes options for the purchase of the TelPharm trading house. The price of the options has not been published, but the validity of this deal is quite long – 12 months.
The deal will make BOL a complete vertically integrated company, by providing it with an arm for the direct sale of medical cannabis to patients.
The deal to acquire Telpharma is the second deal announced by BOL this year. In the previous deal, BOL invested $ 4 million in the startup Neswell. In return, Neswell will develop for BOL ten CBD oil-based health products in the areas of women’s and seniors’ health, aimed at the international wellness market.
As for Fishman Marketing Networks, this is a deal that comes amid a dispute between the company’s shareholders. Fishman Networks is currently held 50% by Eliezer Fishman’s heirs and 50% by the banks. As you may recall, Eliezer Fishman was among the well-known businessmen in Israel, until he went bankrupt in 2017. Fishman chains is, apparently, the last asset left to his three children. Now, Fishman’s children want to purchase the remaining 50% of the shares from the banks, for an amount of NIS 165 million.
According to reports in Globes, Bank Hapoalim, which is one of Fishman’s largest creditors, opposes the deal, despite a recent mediation conducted by the former president of the Tel Aviv District Court, (retired) Judge Eitan Orenstein.
Fishman Chains’ main activities include ZER4U flower retailer, Toys R Us and Red Pirate toy chains, non-bank credit card company Power Card, and online pharmacy Telepharma and Telepharm. As previously revealed in Globes, these activities together generated Fishman combined revenue valued at more than NIS 500 million in the year 2020.
Another key asset of Fishman Chains is about 25% of the shares of Globrands, which markets smoking products, sweets and snacks, and is traded on the stock exchange at a market value of about NIS 540 million. This holding, with a current market value of approximately NIS 135 million, is also included among the assets sold under the company.
In light of the dispute between the shareholders of Fishman Networks, it is possible that the company seeks to realize some of its assets. A less positive scenario may occur if Bank Hapoalim decides not to allow the company to sell some of its assets before deciding on the dispute about the company’s shares.
Another interesting angle in the deal is BOL’s funding sources. As of the end of the third quarter of 2021, BOL has only about $ 4.5 million in cash, which means that it will have to find additional sources for financing the transaction.
For BOL, this is great timing for a funding round, since its recent financial report indicated a significant increase in revenue and moving to net profit. BOL’s revenue in the third quarter of 2021 was approximately UD 17$ million, a 2.4 times increase from the corresponding quarter in 2020.