Mergers & Acquisitions
Each week, Viridian publishes insights and analysis on completed M&A transactions in the prior week. Our analysis includes:
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- M&A Market Commentary
- Public and Private Companies
- Buyers & Sellers
- YTD M&A Analysis
- M&A by Industry Sector
- Deal Structure and Valuation Analysis
- Pending Deal Risk Arb Analysis
- Valuation Gap Analysis
Transaction Summary
- One M&A deal closed for an undisclosed total value during the week ended May 23, 2025.
YTD Analysis
- YTD’s total M&A consideration is down 26.2% from the same period in 2024, and the deal count is down approximately 44.1%. However, transactions targeting the U.S. are up 26.4% from roughly $90 million to $ 113 million. LTM, 63 M&A transactions have closed with a total disclosed value of $1.12B, down 4.5% from 2024, reflecting the fact that the LTM total is composed of 31 weeks of 2024 and 21 weeks of 2025.
Pending Risk Deal Arb Analysis
Valuation Gap Analysis
- The Valuation Gap
- The Valuation Gap measures the difference between the EV/ NTM EBITDA multiple for the largest MSOs and the same multiple for the next smaller group. This measure has been a significant driver of M&A activity since a larger gap creates an opportunity for more accretive transactions.
- The companies included in the large-cap index are Cresco (CL: CSE), Curaleaf (CURA: CSE), Green Thumb (GTII: CSE), TerrAscend (TSND: TSX), Trulieve (TRUL: CSE), and Verano (VRNO: CSE). The small company index now includes Ascend (AAWH: OTCQX), AYR (AYR.A: CSE), Cannabist (CBST: Cboe), Front (FFNT: CSE), Jushi (JUSHF: OTCQX), and Schwazze (SHWX: OTC)
- The gap increased by 0.065 to -1.345 on May 23, 2025, marking the seventh consecutive week of increases. Following the DEA announcement, the gap reached a recent peak of 3.55 on April 30, 2024. At -2.135, the gap indicates that, in the aggregate, the climate is inhospitable for transactions in which Tier 1 MSOs purchase Tier 2 MSOs. This may not be the case for individual combinations, however, as there are broad valuation metric spreads between the companies in each tier. For example, TerrAscend, GTI, and Curaleaf all trade well above the Tier 1 average, while Ascend trades well below the Tier 2 average.
- Historically, the vast majority of M&A transactions in the Cannabis Industry have involved public companies acquiring private companies, and the recently announced Vireo transaction continues this trend.
