Break Out Ahead? Salona Global Medical Device Corporation (CVE:SGMD)

Salona Global Medical Device Corporation (CVE:SGMD) stock continues to gain momentum and extending its weekly gains to 80%.

Market Action

As of 1:54, SGMD stock is up by 7.78% at C$0.97. The stock has traded 111K shares compared to its average volume of 128K shares.  The stock opened at C$0.95 and moved in a range of  C$0.9100 – 0.9800.

Major Trigger:

Salona Global Medical Device Corporation Announces $6.4 million Order Book for Recently Acquired SDP Business Unit

Key Highlights:

• SGMD announced today that South Dakota Partners, Inc. (“SDP”), a business that operates a FDA-approved medical device and robotics facility that served as the Company’s first acquisition in its new acquisition strategy, has $6.4 million (US$5.2M) in standing purchase orders as of June 2021. SDP had audited 2019 revenues (pre-COVID) of $15.8 million (US$12M).
• The current order book is already 40% of the pre-Covid annual revenues for the unit with more than a full 11 months remaining during the earn-out measurement period under the purchase agreement for SDP, making it increasingly likely a full earn-out will be achieved.

Key Quote:

“We are pleased to announce we have purchase orders booked for $6.4 million, giving us a huge head start on revenue for the year,” said Les Cross, Chairman and Interim CEO of SGMD. “We have a strong foundation with our first acquisition to build upon and the fact that they have standing orders for 40% of their earn-out revenue for the next 12 months gives me great confidence. The earn-out structure gives sellers a strong incentive to beat revenue and other financial targets making SGMD more valuable. We are working hard to close on additional acquisitions in the near future with a similar structure.”