Entrepeneur Gabriel Theron (pictured above) has made his first move since listing Cilo Cybin Holdings as a Special Acquisition Vehicle (SPAC) on the JSE’s AltXs six months ago: he’s sold the company he founded, CC Pharmaceuticals, to the holding company for R845 million in what is essentially a ‘reverse take-over by a related party’.

The purchase price will be paid for with Cilo Cybin Holdings shares.

CCH says the rationale for the takeover is party technical – SPAC rules are that an acquisition has to be made within 36 months of listing. In a newsletter to stakeholders on 23 December 2024, Theron said CCH had ‘De-SPAC’d’ in record time: “No other SPAC has completed a viable acquisition within a year of listing, especially not in the medicinal cannabis industry. The deal, once approved and new shares issued, may lead to CCH’s transfer to the JSE’s main board in the year ahead.

The reason for the high valuation is cost of the groundwork in preparing CC Pharmaceuticals for market since its establishment in 2019. By purchasing CCP, which was the plan all along, CCH secures access to:

• A state-of-the-art, integrated facility in Gauteng that is the first South African entity to be awarded three licenses for cultivation and export to European standards (Good Agricultural and Collection Practice (GACP),Good Agricultural Management (GAP) and Good Manufacturing Practice (GMP));

• Advanced manufacturing capacity and scalability to meet the growing global demand for GMP compliant medicinal cannabis products; and

• Industry-leading expertise in cannabis-based product development and APIs (Active Pharmaceutical Ingredients)

Says Theron: “This isn’t just another acquisition – it’s a strategic leap forward. With this acquisition, we’re entering personalised medicine and innovative therapies, tapping into the next frontier of healthcare.”

He says that ahead of the acquisition, CCP “strategically pivoted toward large-scale drug development and manufacturing, emphasising value-added services and the production of high-quality cannabis-based products. Additionally, CC Pharmaceutical has reached profitability, underscoring the strength of its business model and operational capabilities. This acquisition provides CCH with an immediate revenue-generating asset, enhancing the company's financial position and enabling further investment into its strategic objectives.”

Theron and the Malaysian underwriters who listed the SPAC in June 2024, have entrenched their control through the issue of two classes of shares. The Class A shares they and their nominees will hold have 10 times the voting power of ordinary shares that will be issued during the transaction process.

Theron says: “As South Africa’s legal frameworks for cannabis continue to evolve, CC Pharmaceutical will be strategically positioned to expand its offerings to the domestic market, ensuring access to high-quality medicinal cannabis products for local consumers. This forward-looking capability aligns with the company's commitment to being a key player in both global and emerging local markets.”

Cilo Cybin’s broad vision is to deliver ‘personalised and innovative therapeutic solutions’ that span a variety of product ranges. “Furthermore, the transaction provides a platform for future growth in adjacent markets, including the psychedelics industry, which represents a natural progression in addressing emerging healthcare needs” says Theron.

CCH shareholders will receive a circular early in the new year with all the specifics to finalize the transaction bfore 31 March 2025.  The cautionary notice on trading in CCH shares has now been lifted.

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