MMJ Group Holdings Ltd (ASX:MMJ, OTC:MMJJF) has given its tacit agreement to an offer from BevCanna Enterprises Inc to acquire its investee Embark Health.

Embark Health is a Canada-based cannabis extraction business that has been making solid strategic business progress throughout 2021 as it eyes off a public listing, while BevCanna is a health & wellness beverage and natural products business listed on the Canadian Stock Exchange.

MMJ’s investment in Embark consists of shares and the current value stands at approximately C$2.4 million. MMJ expects that its share of the deal would approximate the current book value of its investment.

Good business

MMJ chairman Peter Wall said the company would look to accept the offer once its due diligence was completed.

“This proposed acquisition of Embark Health is beneficial for MMJ investors,” he said.

“It would allow us to exit our investment at its book value and retain a share in the potential upside of the larger merged BevCanna business.”

MMJ was a foundation investor in Embark in 2018 and now holds 3.697 million common shares for a shareholding of about 12% in Embark.

The company was also an early investor in BevCanna in 2018, selling its investment following BevCanna’s listing on the CSE the following year.

What’s in it for MMJ?

Under the terms of the offer, BevCanna would acquire all 46.7 million Embark shares for a purchase price of around C$21 million.

MMJ has been advised that it would be issued its owed BevCanna shares following the completion of BevCanna and Embark’s deal, by the end of 2021.