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 a total transaction value of $9.2M during the week ended 4/17/25.
YTD Analysis
- YTD’s total M&A consideration is down 28.0% from the same period in 2024, and the deal count is down approximately 37.5%. However, transactions targeting the U.S. are up 244.2% from around $9M to $32M. LTM, 69 M&A transactions have closed with a total disclosed value of $1.14B, down only 2.3% from 2024, reflecting the fact that the LTM total is composed of 36 weeks of 2024 and 16 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 used in the large-cap index now include 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 decreased by 0.12 to -2.574 on 4/18/25, the lowest reading since we began tracking this series. Following the DEA announcement, the gap reached a recent peak of 3.55 on April 30, 2024. At -2.574, 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 cannabis have been public companies buying private companies, and the recently announced Vireo transaction continues this trend. The recently closed Cansortium/RIV transaction provides an isolated counterexample. At current price levels, companies should be looking to conduct selective share repurchases.
