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Business Combinations | 3 Months Ended
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Mar. 31, 2022
Business Combinations [Abstract] |
Business Combinations |
8 | BUSINESS COMBINATIONS
Rose Acquisition On November 15, 2021, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”), with Rose and other parties, including the shareholders of Rose (collectively, the “Rose Sellers”), for the acquisition of a 70% interest in Rose pursuant to the terms of the Purchase Agreement (the “Acquisition”), for a total purchase price (the “Purchase Price”) of C$46.7 million, comprised of a cash purchase price of C$19.9 million and a total of 2,411,280 Common Shares of Village Farms (“Village Farms Shares”), subject to customary purchase price adjustments. The Village Farms Shares issued under the Purchase Agreement are subject to lock-up agreements, and subject to compliance with applicable securities laws, 33% of these shares will be released from lock-up restrictions four (4) months following the Closing Date, another 33% of these shares will be released from lock-up restrictions eight (8) months after the Closing Date and the remaining shares will be released from lock-up restrictions one (1) year after the Closing Date. Under the terms of the Purchase Agreement, the Company filed a prospectus supplement under our existing shelf registration statement on March 15, 2022 to register for resale all of the Village Farms Shares issued to the Rose Sellers on the Closing Date. Put/Call Option Two of the co-founders of Rose (the “Management Shareholders”), who were among the Rose Sellers of Rose in the Acquisition, have remained in their current roles with Rose post-Acquisition and have retained a non-voting 30% interest in Rose (the “Retained Interest”). In conjunction with the Acquisition, Village Farms and the Management Shareholders have entered into a unanimous shareholders agreement (the “USA”) providing Village Farms with a call option to acquire the Retained Interest between December 31, 2024 and March 31, 2025 or upon the occurrence of certain liquidity events with respect to Village Farms (the “Call Option”). As part of the Call Option, Village Farms can also acquire 34% of the Retained Interest between December 31, 2022 and March 31, 2023. A put right has also been granted to the Management Shareholders to require Village Farms to complete the acquisition of the Retained Interest upon their death or disability or the occurrence of certain liquidity events with respect to Village Farms (the “Put Option”, and together with the Call Option, the “Put/Call Option”). The price for the Put/Call Option was set at a multiple solely based on Rose’s adjusted EBITDA performance of the applicable prior calendar year. If exercised upon a liquidity event, the Option Price is subject to a minimum amount which varies depending on the year on which it is exercised. The consideration for the acquisition of the Retained Interest may, at Village Farms’ sole discretion, be payable solely in cash or in a pre-determined combination of cash and Village Farms Shares based on a formula similar to that used for the issuance of the Village Farms Shares comprising part of the Purchase Price. Based upon preliminary estimates, the Company identified goodwill of $34,548 and a redeemable NCI classified as temporary mezzanine equity of $16,479. The goodwill has been allocated to the Canadian Cannabis reporting segment. The Company expects to recognize intangible assets but is still in the process of identifying and valuing them as well as the fair value of the Put Option identified and classified as redeemable non-controlling interest. The Company expects the accounting for the business combination to be complete by June 30, 2022.
Consideration paid |  | Shares |  |  |  | Share Price |  |  | Amount |
Cash |  |  |  |  |  |  |  |  |  |  | $ |  | 15,859 |
Village Farms common shares issued |  |  | 2,411,280 |  |  |  | $ | 9.04 |  |  |  |  | 21,798 |
Working capital adjustment |  |  |  |  |  |  |  |  |  |  |  |  | 1,055 |
Total fair value of consideration |  |  |  |  |  |  |  |  |  |  | $ |  | 38,712 |
|  | November 15, 2021 |
ASSETS |  |  |  |  |
Cash and cash equivalents |  | $ |  | 1,118 |
Trade and other receivables, net |  |  |  | 1,595 |
Inventories |  |  |  | 3,586 |
Prepaid expenses and deposits |  |  | 498 |
Property, plant and equipment |  |  |  | 16,423 |
Goodwill |  |  |  | 34,548 |
Total assets |  |  |  | 57,768 |
LIABILITIES |  |  |  |  |
Trade payables |  |  |  | 774 |
Accrued liabilities |  |  |  | 1,803 |
Total liabilities |  |  |  | 2,577 |
Mezzanine equity |  |  |  | 16,479 |
Total liabilities and mezzanine equity |  |  |  | 19,056 |
Net assets acquired |  | $ |  | 38,712 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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