The Weedmaps e-commerce platform for cannabis consumers will become a public company after merging with blank-check firm Silver Spike Acquisition Corp. in a transaction that values the combined entity at about $1.5 billion.
Shares of Silver Spike surged 40% Thursday after the deal with WM Holding Co. was announced. The transaction provides as much as $575 million of gross proceeds through the $250 million of cash held in trust by Silver Spike and a fully-committed common stock PIPE of $325 million. A PIPE, or private investment in public equity, is when an investor buys stock directly from a company below the market price.
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WM Holding operates Weedmaps, which provides an online platform for pot consumers and businesses, as well as WM Business, a software subscription offering sold to marijuana retailers and brands. Its revenues have grown at a compounded annual rate of 40% over the last five years and it’s on track to deliver $160 million in revenue and $35 million in Ebitda for 2020, the company said in a statement.
“With this merger, we will be able to continue scaling the Weedmaps marketplace in the U.S. and internationally in service of our users while expanding the functionality of our WM Business SaaS offerings in service of our clients,” Chris Beals, chief executive officer of WM Holding, said in the statement.
Weedmaps has over 10 million monthly active users and over 18,000 business listings across every U.S. state with a legal cannabis market, as well as the District of Columbia and Puerto Rico.
The deal, which has been unanimously approved by the boards of WM Holding and Silver Spike, is subject to approval by Silver Spike’s shareholders and other customary closing conditions.
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December 10, 2020 at 10:37PM
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Blank-Check Firm Silver Spike Soars After Weedmaps Deal - Bloomberg
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