CV Sciences, a consumer wellness company specialising in nutraceuticals and plant-based foods, has completed its acquisition of Elevated Softgels in a deal valued at up to $1m.

Based in Grand Junction, Colorado, Elevated Softgels is a manufacturer of encapsulated softgels and tinctures for the supplement and nutrition industry.

The company is said to have operational flexibility that accommodates low to large minimum order quantity (MOQ) production runs. This flexibility allows for efficient capital use and faster market entry for new products, said CV Sciences.

Elevated Softgels is GMP-certified and US Food and Drug Administration (FDA)-registered.

CV Sciences stated that the acquisition offers an opportunity to increase sales to both current and new clients. Additionally, CV Sciences plans to in-source the production of some of its key products.

The acquisition was structured as an equity purchase, with Elevated Softgels set to operate as a wholly-owned subsidiary of CV Sciences.

CV Sciences CEO Joseph Dowling said: “The acquisition synergies should allow us to leverage our key assets including our relationships with other hemp and supplement companies to drive long-term growth and shareholder value.

“Elevated Softgels is a stand-alone profitable business. Our immediate plan is to increase the existing business of Elevated Softgels to further leverage its existing capacity.”

Dowling further said that CV Sciences plans to in-source the manufacturing of select +PlusCBD branded products, offering a significant opportunity for cost savings.

In 2023, sales of softgels and tinctures together accounted for approximately 50% of CV Sciences’ total business. Elevated Softgels` ability to handle low-MOQ production runs enables CV Sciences to provide flexible and cost-efficient services to the latter’s clients and meet its internal production needs effectively, said Dowling.

The acquisition consideration included an upfront cash payment of $100,000 and 17.4 million shares of CV Sciences` common stock, valued at $700,000 based on the 30-day volume-weighted average price.

There is also a potential earn-out of up to $200,000 in cash and stock if Elevated Softgels meets certain performance thresholds within 12 months post-closing.