MTech Acquisition Corp. Announces Merger Agreement with MJ Freeway
by Kristi Marvin on 2018-10-11 at 9:31am

MTech Aquisition Corp. (“MTEC”), announced Thursday morning that they have entered into a definitive merger agreement with MJ Freeway LLC, a leading seed-to-sale technology provider and developer of the cannabis industry’s first enterprise resource planning platform. The combined company is estimated to have an initial equity value of $70 million, with shares of the new company valued at $10.16 per share.

It is estimated that MJ Freeway captures more than 30% of the global cannabis technology market based on management’s estimates.  MJ Freeway has tracked more than $10 billion in sales for its clients in AustraliaEuropeSouth AmericaNew ZealandAfricaCanada, and the United States in 29 states and the District of Columbia. Additionally, MJ Freeway’s software, MJ Platform®, includes compliance tracking of cannabis from seed-to-sale, as well as enterprise scale business management tools across the entire supply chain. Its Leaf Data Systems® software solution enables governments to track cannabis plants from seed-to-sale to help ensure patient, public and product safety.

Furthermore, Roger McNamee, founder of the venture capital firm Elevation Partners, and who is a current MJ Freeway investor and Senior Strategic Advisor to their Board, supports the transaction.

TRANSACTION

Under the terms of the merger agreement, MTech and MJ Freeway will merge with newly formed subsidiaries of Pubco, which itself is a newly formed subsidiary of MTech.  As a result of such mergers, MJ Freeway equityholders will receive new shares of Pubco and MTech security holders will exchange their securities of MTech for securities of Pubco.  Cash proceeds released from MTech’s trust account, which is currently estimated at $58 million, will remain with the combined company.

Following the closing of the transaction, if there are no redemptions by MTech shareholders in connection with the MTech shareholder vote to approve the transaction, it is currently anticipated that the combined entity will be debt free and have over $60 million of balance sheet cash to take advantage of strategic growth opportunities.

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