Company Interview / Little Green Pharma plants roots to acquire Health House

Little Green Pharma (ASX: LGP) has signed a non-binding Letter of Intent (LOI) to acquire Health House Australia Pty Ltd for $1.25 million, pending due diligence and a binding agreement expected by January 31, 2025. Health House is a cashflow breakeven medicinal cannabis distributor with annualized revenue of approximately $7.5 million.

CEO Paul Long described the proposed acquisition as a strategic move to enhance vertical integration, streamline distribution, and reduce costs, aligning with the company's growth objectives in the Australian medicinal cannabis market.

Under the deal, LGP gains exclusivity to negotiate and conduct due diligence during the exclusivity period. The purchase price is structured on a cash-free, debt-free basis, with adjustments for net payables and receivables. A $75,000 deposit, partially refundable, has been paid to secure exclusivity.

Health House's established distribution network and operational capabilities are expected to complement LGP's existing production expertise, potentially strengthening revenue and operational efficiencies while supporting broader market expansion.