YORK, Sept. 19, 2023 /PRNewswire/ -- In the
business world, one of the cardinal reasons for mergers and
acquisitions (M&As) is the potential for synergistic growth.
Successful companies usually measure this in terms of revenue
streams, market share and product offerings. However, in the age of
digital technology and globalization, a significant facet of growth
potential is often found a company's core customer base and digital
reputation. Lucy Scientific Discovery (NASDAQ: LSDI)
(Profile) is astutely following this road map utilized by hugely
successful corporations by uniquely leveraging user bases to
rapidly amplify shareholder value. This well-established, albeit
counterintuitive, M&A strategy has been utilized by several
major companies including Meta Platforms Inc. (NASDAQ:
META), Microsoft Corp (NASDAQ: MSFT), Amazon.com Inc.
(NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL) with the
unconventional process producing results that vastly exceeded
expected typical M&A metrics.
- Strategic acquisitions prove that harnessing the power of
niche user bases can lead to parabolic growth.
- Lucy Scientific Discovery has recognized the value of
uniquely leveraging user bases to rapidly amplify shareholder
- Earlier this year the company entered into a share purchase
agreement to acquire the total IP of High Times.
- Most recently, Lucy announced the signing of an amalgamation
agreement to acquire BlueSky Wellness, a move that expands its
footprint into the growing global wellness category.
Click here to view the custom infographic of
the Lucy Scientific Discovery editorial.
Meta's strategic acquisition of Instagram in 2012 for
$1 billion was less than one week
after the roll out of its Android app, when it accumulated more
than a million downloads in a day. Then, in 2014, Meta's radar
locked onto WhatsApp, boasting more than 200 million users. The
acquisition price was steep at $19
billion, but the value wasn't just in the application's
functionality — it was in its colossal global user base.
Microsoft deployed a similar aggressive acquisition strategy of
identifying opportunities to diversify and strengthen position and
market share by tapping into vast niche user networks. In 2011,
Microsoft's $8.5 billion acquisition of Skype, a platform with more
than 660 million global users, became a classic example of how the
tech giant was looking beyond just software integration to a global
platform integration strategy. Then, in 2016, Microsoft made
headlines again by acquiring LinkedIn for $26.2 billion. LinkedIn, unlike other social
media platforms, was the first mover and dominant in the
professional networking space.
A Golden Opportunity
These moves by Meta and Microsoft underscore a clear strategy:
Harnessing the power of niche user bases can lead to parabolic
Enter Lucy Scientific Discovery (NASDAQ: LSDI), a company that
has recognized the value in this counterintuitive approach. Lucy's
recent share purchase agreement to acquire the total
intellectual property (IP) of High Times shows that the
company truly understands the immense value of a large, loyal
audience. In an all-stock transaction, the acquisition provides a
stream of high-margin licensing and royalty income from the
well-regarded High Times. More importantly, with its massive
following, the High Times acquisition offers a golden opportunity
for Lucy Scientific Discovery to introduce and distribute its
products to a captive, engaged audience, while benefitting from
significant early-stage revenue.
On closing, Lucy will acquire all the brand rights and fully
intends to monetize the broad-based IP through both current and
future royalty agreements. Lucy also plans to extend and enhance
the existing domestic and international licensing arrangements
currently held by High Times, including consumer products and
merchandise. The company expects to preserve the core essence of
the High Times brands and its followers while simultaneously
expanding the follower base and pursuing new avenues of growth and
"Lucy expects this acquisition to drive high margin revenue
quickly and sustainably," said Richard
Nanula, Lucy Scientific Discovery CEO and executive chair.
"This is a great opportunity to grow the market presence of the
nearly 50-year-old High Times brand globally through licensing and
online distribution. We are confident that this opportunity can add
significant value for our shareholders."
Lucy Scientific Discovery's move also appears to be a strategic
play to leverage an established niche audience for direct product
sales, reputation and influence — just like Meta and Microsoft
purchased platforms with vast niche user bases to expand their
The message is clear: Niche user bases are invaluable, as they
offer immediate access to engaged consumers, a chance for
cross-selling, and opportunities for expansion and diversification.
As these cases illustrate, sometimes the most compelling asset
isn't a product, patent, or technology—it's the people using them.
In the digital age, where user engagement is currency, companies
that recognize and act upon this fact will often find themselves in
an enviable position of growth and influence.
Testament to Shareholder Commitment
High Times isn't the only M&A move that Lucy Discovery has
made. In another all-stock deal, the company continued its savvy
strategy with the amalgamation agreement to acquire BlueSky
Wellness, a move that quickly expands Lucy's footprint into the
growing global wellness category on closing. BlueSky Wellness built
an impressive a portfolio of plant-based wellness brands that have
generated more than $20 million in
each of its last two years that complement High Times' products and
platforms and should positively impact the bottom line of Lucy
"The addition of the BlueSky portfolio and its team will allow
us to capitalize on revenue opportunities," said Nanula. "Coupled
with our High Times acquisition, this will strategically position
us for substantial near- and long-term growth. The recent
announcements are a testament to our commitment to expand and grow
our business, adding revenue that diversifies our company and
should deliver significant value to our Lucy Scientific
BlueSky is led by a team of seasoned CPG executives with
experience at Fortune 500 companies, including PepsiCo, SC Johnson,
General Mills and Robert Half. They
have built and exited a number of successful companies over the
last decade. The acquisition brings a unique suite of marketing
capabilities, brand-building prowess and a highly skilled team
with extensive relationships to the Lucy Discovery table.
Major League Acquisitions
Meta Platforms Inc. (NASDAQ: META) builds technologies
that help people connect, find communities, and grow businesses.
When Facebook launched in 2004, it changed the way people connect.
Apps such as Messenger, Instagram and WhatsApp further empowered
billions around the world. Now, Meta is moving beyond 2D screens
toward immersive experiences like augmented and virtual reality to
help build the next evolution in social technology. The company
continues to make key acquisitions that support its strategic
Microsoft Corp. (NASDAQ: MSFT) enables digital
transformation for the era of an intelligent cloud and an
intelligent edge. Its mission is to empower every person and every
organization on the planet to achieve more. The company has a long
history of acquisitions, with more than a hundred acquisitions
Amazon.com Inc. (NASDAQ: AMZN) is guided
by four principles: customer obsession rather than competitor
focus, passion for invention, commitment to operational excellence,
and long-term thinking. Amazon strives to be the most
customer-centric company, best employer, and safest place to work
in the world. The company has a rich history of acquisitions; most
recently the company added One Medical to its roster of strategic
Apple Inc. (NASDAQ: AAPL) designs,
manufactures, and markets smartphones, tablets, personal computers
and wearable devices. The company offers software applications and
related services, accessories, and third-party digital content.
Apple's product portfolio includes iPhone, iPad, Mac, iPod, Apple
Watch and Apple TV. Earlier this year, the company acquired
Mira, a Los Angeles-based AR
startup that makes headsets for other companies as well as the U.S.
military. Apple typically doesn't discuss acquisitions, but it did
confirm the acquisition and issued the statement it traditionally
provides when buying a company: "Apple buys smaller technology
companies from time to time, and we generally do not discuss our
purpose or plans."
Lucy Scientific Discovery's last few weeks action of
unconventional strategic acquisitions is a clear indication that
the company fully recognizes the inherent value of large and loyal
user networks. More importantly than just the inherent value of
these networks, the company is fast tracking the integration and
expansion of these networks and maximizing revenue streams that
will ultimately impact shareholder value. Utilizing part of an
unconventional playbook from some major league successful
acquisitions, Lucy Scientific Discovery is intent on writing a new
chapter of success aimed at benefiting all stakeholders.
For more information about Lucy Scientific Discovery Inc.,
please visit Lucy Scientific Discovery.
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