The transaction consists of an up-front payment of $20 million, of which $1 million was paid in cash and $19 million has been allocated in Cure stock at a valuation of $2.75 per share. The transaction also includes an initial, additional commitment of $4 million for working capital in support of accelerating Sera Labs’ growth, and earn out incentives of up to an additional $20 million in Cure stock at a valuation of $3.34 per share within two years.
The structure of the earn out balances the risk and reward between Cure stockholders and Sera Labs’ management. It also aligns Sera Lab’s high-margin, retail and direct-to-consumer business platform with Cure’s cGMP manufacturing of differentiated dosage forms for superior delivery of actives, that includes nutraceutical, health & wellness and pharmaceutical products delivered via Cure’s oral dissolvable thin film technology.
“Our acquisition of Sera Labs has been validated over the last few months as we have seen a strong cultural fit and expanded opportunities including a pivot to tele-wellness through which we will deliver to consumers science-based products that meet their personalized wellness objectives,” said Rob Davidson, Cure pharmaceutical CEO. “Consumers will soon have access to Cure’s proprietary formulations under the Sera Labs brand in the coming weeks. We believe the rest of 2020 will set the stage to make 2021 a breakout year for the Sera Labs wellness business as well as for Cure Pharmaceutical.”
Jonathan Berlent, chief business officer added, “It is clear that Sera Labs brings to Cure the best platform to effectively deliver our innovative products and dosage forms to the market. With Sera Labs’ expertise in brand marketing and multi-channel distribution platform, we can now give consumers greater access to the dosage forms and drug delivery technologies they seek. The next step is to educate the consumer and deliver on consumer preference for direct access to science-based therapeutics.”
Nancy Duitch, founder and CEO of Sera Labs, who will continue as the CEO of Sera Labs, as well as assuming the additional role as chief strategic officer of Cure’s Wellness Division, stated, “Since founding Sera Labs, we have fast become a standout leader in the CBD beauty and health & wellness industries. Before forming Sera Labs, our team drove billions of dollars in sales for well-recognized brands. Today, this same team has reached another milestone by joining with Cure. With the consummation of the transaction, the Sera Labs’ team is excited to introduce consumers to Cure’s innovative delivery system, which we believe will change the way they take daily nutraceuticals. With the combined strength of Sera Labs in the categories of health, wellness and beauty and with Cure Pharmaceuticals’ cutting-edge technology, we have a unique opportunity to become the leading brand known for excellence, innovation and differentiation.”