HERBL, a weed supplier based in Santa Barbara, California, is in talks to go public via a SPAC merger according to sources in a Reuters report.
The company would go public by merging with blank check company BGP Acquisition, at a valuation of about $600 million, sources familiar with the matter said.
In recent weeks, HERBL has seen its post-merger enterprise value cut to between $450 million and $500 million compared to over $630 million in the original agreement reached with BGP around June, the sources also said.
That would translate to an equity valuation of about $600 million, down from around $800 million in the previous agreement, the undisclosed sources continued.
BGP is a Special Purpose Acquisition Company (SPAC) formed by former Goldman Sachs banker Ruth Epstein. The SPAC has been trying to raise roughly $50 million from investors as part of a so-called public investment in private equity (PIPE) round, said the sources.
By merging with BGP, HERBL’s shares will be listed on the NEO exchange in Canada. The company however does not do any business in the country.
The sources warned that there is no certainty that BGP will succeed in raising its PIPE funding or completing the deal. HERBL could also decide to stay private.
HERBL declined to comment, while BGP did not respond to Reuters’ requests.
