Abacus Health Products acquires Harmony Hemp

WOONSOCKET, R.I. — Abacus Health Products has acquired the principal assets of the companies owning the Harmony Hemp brand for an aggregate consideration of $5.5 million, payable in cash and subordinate voting shares of Abacus over a 24 month period in accordance with the terms of the acquisition agreement entered into on February 10.

Harmony Hemp is a leading brand in CBD-infused personal care products with national distribution to more than 4,000 locations in major grocery and drug stores.

Through this strategic acquisition Abacus will be expanding its retail footprint by approximately 50% to over 12,000 retail locations and have, to the best of management’s knowledge, the largest retail footprint of topical CBD and hemp-infused products in the United States. Additionally, Abacus’ offering will expand to include a range of beauty and bath products currently offered by Harmony Hemp.

“This acquisition is highly synergistic and brings our national distribution to the next level,” Perry Antelman, CEO of Abacus. “With this acquisition, Abacus is one of the largest, if not the largest, suppliers and distributors in the United States of topical products infused with CBD and hemp in the F/D/M industry. Harmony Hemp has long-standing relationships with quality retailers in the F/D/M channel and highly complementary products with Abacus. Our shared desire to bring innovative products to market makes this strategic combination a natural fit. We are excited to have them join our dynamic team.”

Harmony Hemp, established in 2017 and based in Salt Lake City, markets personal care product lines in OTC Topicals, Bath and Beauty. The assortment of over 25 unique products includes:

Bath and Beauty: Hemp Bath — Bath bombs, lotions, bath salts, oils, and soaps.
OTC Topicals: Flexible & Neurocomfort — joint relief sprays, pain relief gels, roll-ons and lotions with active pharmaceutical ingredients.

The product variety provides retail partners cross-category assortment to help drive additional consumers and generate incremental sales.

Courtney Roundy, founder and president of Harmony, said: “We chose to partner with Abacus because of their dedication to science, research and product efficacy; the primary reason we entered the CBD industry in the first place. Abacus was one of the only companies in the country that knew how to launch CBD topicals within the confines of regulatory compliance. This alliance allows us to utilize innovative research to bring the most effective CBD-infused products to our retail partners and their customers.”

Harmony Hemp has a presence in over 4,000 retail locations across the United States, of which approximately 3,400 do not overlap with Abacus’ retail presence. Approximately 2/3 of Harmony Hemps’ sales in 2019 were derived from the personal care bath products, with the other 1/3 derived from topical analgesic products. Harmony Hemp generated approximately US$2.2 million in revenue in 2019 and Abacus expects that revenue from the Harmony Hemp brand will grow over the next 12-24 months, mainly driven by increased retail store adoption.

In addition to the acquisition of the assets of Harmony Hemp, its two founders, Courtney Roundy and Miki Stephens, will be joining Abacus’ senior management team and support the growth of the combined business. Courtney Roundy has over 35 years of experience and existing relationships with major retail chains and will work closely with Abacus’ existing Sales team to further secure Abacus’ dominant position within the food/drug/mass channel.

Abacus currently intends to maintain the Harmony Hemp brand and expects to have the opportunity to leverage relationships with retailers carrying Harmony Hemp products. All of Harmony Hemps’ products are manufactured by third-party contract manufacturers. All commercial activities related to Harmony are planned to be integrated into Abacus’ existing infrastructure.