The Largest M&A Deal of the Week:

• On December 15, 2022, RIV Capital (RIV: CSE)(CNPOF: OTC), an acquisition firm focused on building a leading multistate platform, announced the final closing of its transaction of Etain, LLC for approximately US$4M.
  • The $48M consideration for the final closing was paid through approximately $42M in cash and the issuance of 5.27M Class A common shares in RIV Capital.
  • RIV, in March, agreed to pay approximately $243M to acquire Etain, the NY cannabis market’s only women’s owned and operated business and of the ten approved vertically integrated operators in the state.
  • RIV took a $138.9M writedown for Etain in its third-quarter financial statements representing a 42% reduction in the value of the investment.
  • On December 20, 2022, RIV’s largest shareholder, JW Asset Management (with approximately 20% of outstanding shares), requisitioned a special meeting of the Board. JWA alleges that “an immediate overhaul of the Board with independent and experienced directors is necessary to prevent further value destruction and to construct an effective strategy for growth moving forward.” RIV completed the Etain acquisition without a shareholder vote and without obtaining a fairness opinion.
  • RIV’s shares are down 83.4% YTD compared to 73.7% for the MSOS ETF.
  • Two large transactions geared towards entering the New York market have been canceled this year: Ascend’s (AAWH: OTC) purchase of MedMen’s NY operations and Verano’s (VRNOF: OTC) acquisition of Goodness Growth (GDNSF: OTC). These two cancellations evidence the decline in the valuation of NY licenses.