US-based Compass Diversified Holdings (CODI) has completed the sale of its hemp food manufacturing company Manitoba Harvest to Tilray for an aggregate price up to C$419m ($318m) in a cash and stock deal.

Shareholders of Manitoba Harvest, including CODI, will receive up to C$419m ($318m), of which C$277.5m ($210m) is payable at closing, comprised of C$150m ($114m) in cash and C$127.5m ($96.9m) in Tilray shares.

Manitoba Harvest and CODI shareholders will receive an additional C$49m ($37.2m) in Tilray shares after Manitoba Harvest achieves certain performance milestones in 2019.

“Are proud to have partnered with the company to raise awareness of Hemp as a superfood, growing the customer base across North America.”

Six months after closing, Manitoba Harvest shareholders, including CODI, will receive C$92.5m ($70m), comprising C$50m ($38m) in cash and C$42.5m ($32.3m) in Tilray shares.

Earlier this month, CODI entered an agreement to sell its hemp food business Manitoba Harvest to Tilray.

At the time of signing the agreement, CODI CEO Elias Sabo said: “We acquired a majority interest in Manitoba Harvest over three years ago and are proud to have partnered with the company to raise awareness of Hemp as a superfood, growing the customer base across North America, more than doubling household penetration in the US and driving category expansion.”

CODI anticipates a gain between $100m and $120m through the sale and intends to use the proceeds to repay outstanding debt under its revolving credit facility.

For the deal, Stikeman Elliott served a legal counsel to sellers, while Jefferies acted as the financial advisor to CODI.

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