Level Brands Inc (NYSEAMERICAN: LEVB) is climbing early on in the trading session this morning, and for good reason. The comapny announced that it has entered into a definitive merger agreement to acquire a CBD-related brand. Of course, the news excited investors, sending the stock on a run for the top. Today, we’ll talk about:
- The acquisition news;
- what we’re seeing from LEVB stock as a result; and
- what we’ll be watching for ahead.
LEVB Climbs On Acquisition News
As mentioned above, Level Brands is having a great day in the market today after announcing acquisition news. In a press release issued early this morning, the comapny said that it has entered into a definitive merger agreement. Under the terms of the agreement, LEVB will acquire Cure Based Development, LLC.
Cure Based Development is the owner, operator and manufacturer of a nationally recognized consumer cannabidiol brand known as cbdMD.
In the release, the company said that the merger will come in two steps. First, the company will provide Cure Based Development with 15.525 million shares of common stock with an earnout potential of up to an additional 15.525 million shares of common stock. The additional shares of common stock will only be provided should net revenue come to $300 million within 60 months of the closing date.
In the release, LEVB said that the closing of the transaction is subject to a number of customary closing conditions as well as the passage of the Agricultural and Nutrition Act of 2018, commonly refered to as the 2018 Farm Bill.
In a statement, Martin A. Sumichrast, Chairman and CEO at LEVB, had the following to offer:
With the passage of the 2018 Farm Bill, CBD will no longer be listed as a Schedule 1 controlled substance which we believe will open the access to national retailers for CBD consumer products. We believe that the next three to five years will produce a few leading CBD brands, and our goal is to be the leader in the space.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Level Brands, the news proved to be positive. After all, investor interest in CBD-related products is climbing, and the acquisition will allow the company to break into the industry. So, it’s not surprising to see that excited investors are pushing the stock for the top in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:03), LEVB is trading at $5.10 per share after a gain of $1.24 per share or 32.12% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on LEVB. In particular, we’re interested in following the acquisition to see if the transaction does close. After all, while the agreement is a definitive one, it is still subject to customary closing conditions and regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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