Abattis Explores Diversifying with a Strategic Acquisition


Ryan Allway

January 18th, 2017

News, Top News


Abattis Bioceuticals Corp. (OTC: ATTBF) (CNS-X: ATT), a specialty agricultural technology firm focused on the legal cannabis industry, recently commissioned an independent valuation on Green Nature Health Care Products Inc. in advance of a potential strategic acquisition. The move would follow the company’s international licensing and co-branding agreement signed in November of last year and Green Nature’s strong financial performance since then.

In this article, we will take a closer look at the potential strategic acquisition and the company’s other efforts to bolster its revenue and profitability moving forward.

Green Nature’s Extensive Distribution

Green Nature provides dried fruit products to over 400 customers throughout China, including 388 Wal-Mart stores, five Shanghai Duty Free stores, and 20 Yangzhou Pharmacies. Since 2012, the company has expanded its footprint with customs clearance through six Chinese cities including Shanghai, Nantong, Qingdao, Tianjin, Guangzhou, and Hong Kong. The company’s products can also be found in TNT Markets and 50 other stores throughout Canada.

Recently, Green Nature received a large purchase order from a prominent Japanese supplier that operates about 250 stores. Under the terms of the deal, the company will send a monthly container shipment containing its signature dried fruit products. The company has also started final packaging on several new product lines, including hemp and granola products that it plans to unveil through its tradeshow and sales schedule in 2017.

The initial agreement between Abattis Bioceuticals and Green Nature provides Abattis with the right to acquire Green Nature through a common stock transaction if it is deemed accretive by the Board of Directors. With the independent valuation in progress, Abattis is positioning itself to potentially execute a strategic acquisition that could add top-line revenue and bottom-line profitability while opening valuable distribution channels into China’s economy.

Targeting Functional Foods

The functional food industry is expected to grow at a 6.84% compound annual growth rate to reach over $300 billion by 2022, according to a recent press release. Abattis Bioceuticals is well positioned to capitalize on the opportunities in this market through its wholly owned subsidiary, Vergence Sales and Marketing Group, which has an aggressive sales schedule planned in the Asia-Pacific region moving into 2017 and beyond.

Recently, Vergence Sales and Marketing announced a Memorandum of Understanding with VitaminGum to expand their sales channels into the South Korean market through Global Damon Pharma (GDP), with whom it has sales and distribution agreements in place for proprietary products. The agreement marks another key win for the segment as it expands its global presence with proprietary product lines in the functional food space.

The Vergence Sales and Marketing Group’s efforts also dovetail nicely with Abattis Bioceuticals’ potential acquisition of Green Nature. With its extensive distribution throughout China, the acquisition could help the company significant expand its revenue as it launches proprietary functional food products. Investors may want to keep an eye on these developments given the potential to significant improve the company’s top- and bottom-line performance.

One more thing to consider is the potential for these distribution lines to benefit another of Abattis’ businesses, Northern Vine Labs. Northern Vine is an analytical and testing lab certified to handle controlled substances by Health Canada. As the company develops, the plan is to go beyond cannabis testing services and develop cannabis-based bioceuticals that would fit naturally into the markets developed by Vergence and Green Nature.

Looking Ahead

Abattis Bioceuticals Corp. (OTC: ATTBF) (CNS-X: ATT) is well-positioned to capitalize on the functional food industry’s growth through its Vergence Sales and Marketing Group and its potential strategic acquisition of Green Nature. If consummated, the transaction could open significant distribution into China’s largest cities and hundreds of retail locations, which could in turn help accelerate revenue growth and drive long-term profitability.

With a market capitalization of just $12 million, investors may want to take a closer look at the stock given these near-term catalysts.

For more information, visit the company’s website at www.abattis.com or see CFN Media’s Company Profile.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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