đź’µ$120M Ceres Acquisition Corp. SPAC + Parallel valued at $1.9B

Over-subscribed $225M private placement at closing; combined public company expected to have $430M cash balance at closing.

Parallel, one of the largest privately-held multi-state cannabis operators (MSO) in the U.S. and Ceres Acquisition Corp. (NEO: CERE.U, OTCQX: CERAF) SPAC, have entered into a definitive business combination agreement involving a transaction that would result in Parallel becoming a public company. In addition, a group of investors, led by Ceres and Parallel, have committed to participate in the Transaction through an over-subscribed private investment in public equity (PIPE) of $225M. Subject to the satisfaction of Conditions, the Transaction is expected to close in Summer 2021.

Summary of Transaction Terms

Ceres has agreed to acquire Parallel at an implied enterprise value of $1.9B (Parallel maintains 81% ownership, PIPE at 11% ownership, Ceres at 6% ownership), and has received commitments from a group of investors in an over-subscribed PIPE of $225M at a price of $10.00/share issuable immediately prior to, and conditional on, completion of this business combination with Parallel. Substantial investment in the PIPE came from existing Parallel and Ceres investors, as well as institutions and private family offices in both the U.S. and Canada. The proceeds of the PIPE are intended to be used to fund Parallel's continued growth and market expansion. 

Following the close of the Transaction and subject to shareholder approval, Beau Wrigley will continue to serve as Parallel's Chairman and CEO, Scooter Braun will serve as a Special Advisor, and the Board of Directors will comprise of: 

  • Marina Bozilenko. 30+ years of investment banking and other healthcare industry expertise, currently serves as Strategic Advisor to William Blair, where she previously served as Managing Director and Head of Biotech & Pharma;

  • Kevin Douglas, M.D. 15+ years of U.S. and international biopharmaceutical industry experience, currently serves as Medical Director of U.S. Rheumatology and Study Designated Physician/Therapeutic Medical Director at Abbvie;

  • Sarah Hassan. Founding Partner of IM HealthScience and acting CFO through the sale of the company to NestlĂ© HealthScience in 2020, in addition to holding prior positions as a venture capital partner and fund manager;

  • Linda McGoldrick. Global business strategy leader and policy expert in healthcare, who has spent her entire 30-year career working in senior executive and advisory roles, including as CEO and independent board member of numerous healthcare and life sciences companies;

  • Joe Crouthers. Chairman and CEO of Ceres Acquisition Corp., who is a seasoned cannabis investor and entrepreneur who previously worked as a commodities trader and portfolio manager at Goldman Sachs; and

  • Phil Harris. Current General Counsel at Parallel, who has experience as a partner across several Chicago-based global law firms, where he served as a practice leader and on the management and diversity committees

The combined publicly listed company is anticipated to have Class A Subordinate Voting Stock and Class B Multiple Voting Stock. The Class B Multiple Voting Stock will have 15 votes per share and will be held by Beau Wrigley and his affiliate entities upon close. The Class A Subordinate Voting Stock will have one vote per share and will be the publicly traded class of stock upon the closing of the Transaction.

Parallel

  • 2021E Revenue / EBITDA: $447M / $102M (22.8% margin)

    • 2021E EV/Revenue: 4.2x / EV/EBITDA: 18.5x

  • 2022E Revenue / EBITDA: $785M / $264M (33.6% margin)

    • 2022E EV/Revenue: 2.4x / EV/EBITDA: 7.1x

  • Cash at close: $430M

  • Operations in five states: Florida (39 stores)Pennsylvania (medical cannabis research partnership with the University of Pittsburgh School of Medicine, expect to open 6 store allotment by EOY)Massachusetts (NETA, 2 stores/3rd opening in Q2)Texas (1 of 3 license in State), and Nevada (1 store that will be branded Cookies) — 42 dispensaries total

    • 8 markets; 86 stores by end of 2022

  • Pending license applications in Georgia, New Jersey and Virginia

  • Parallel intends to enter into a partnership with Cookies, a collaboration that will strengthen the Company's presence in Las Vegas with a well-known consumer retail brand

  • William "Beau" Wrigley Jr. is the former CEO of the Wm. Wrigley Jr. Company, growing the company to $5B+ in revenue with distribution in 180 countries before orchestrating its sale to Mars in 2008 for $23B

Ceres Acquisition Corp.

  • Ceres Group founded in 2016, have invested in 12+ cannabis deals in both the US and abroad including brand, supply chain, ancillary, and plant touching companies

  • SPAC formed March 2020, launched with participation from the founders of: 72andSunny, a global marketing, advertising, and design company; MGMT, a full-service talent management agency; and Red Light Management, an independent music management company that partners with music festivals

  • Ceres met with 200+ companies all around the country and across key verticals