Core Viewpoint - CEA Industries has completed the acquisition of Fat Panda Ltd., the largest independent vape retailer in Central Canada, enhancing its position in the rapidly growing regulated nicotine market [1][3]. Company Overview - CEA Industries Inc. is focused on building leading businesses in regulated consumer markets, particularly in the high-growth Canadian nicotine vape industry [8]. - Fat Panda, founded in 2013, operates 33 retail locations across Manitoba, Ontario, and Saskatchewan, and has a national e-commerce platform [2]. Financial Performance - Fat Panda generated approximately CAD $38.5 million (USD $28.5 million) in revenue with 39% gross margins and CAD $8.0 million (USD $5.9 million) in adjusted EBITDA for the fiscal year ending April 30, 2024 [2]. - The acquisition price for Fat Panda is CAD $18.0 million (USD $12.6 million), consisting of CAD $12.1 million in cash, 39,000 shares of CEAD common stock valued at CAD $700,000, and seller notes totaling CAD $2.56 million [5][6]. Strategic Benefits - The acquisition establishes CEA as a leader in Central Canada's regulated vape market with over 50% regional market share [5]. - It combines a national e-commerce presence with high-traffic retail locations, driving over CAD $2 million in annual online sales [5]. - Fat Panda's vertical integration supports high gross margins and profitability, enhancing CEA's overall financial performance [5]. - The acquisition allows for future growth through expansion and potential mergers and acquisitions, leveraging CEA's capital and strategic support [5]. Management and Operations - Fat Panda will continue to operate under its existing brand with the current management team to ensure a smooth transition [3]. - The integration efforts will be led by Fat Panda's Co-Founder and President, Jordan Vedoya, focusing on retail and digital channel expansion [3].
CEA Industries Enters Canadian Vape Market with Completion of Fat Panda Acquisition