Aurora buys Medreleaf for $3.2 billion in cannabis industry’s biggest deal yet

Aurora buys Medreleaf for $3.2 billion in cannabis industry’s biggest deal yet

At 10:00 AM ET today, the CEOs of Aurora Cannabis and MedReleaf held a joint press conference to announce Aurora’s acquisition of MedReleaf for $3.2 billion dollars in the biggest deal yet for the Canadian cannabis industry, ending weeks of speculation from investors and denials from company representatives.

By joining forces, the combined firm would have a production capacity of 570,000 kg of cannabis each year through nine facilities in Canada and two in Denmark, according to the press release.

While the deal was approved by the boards of both firms and the boards recommend that shareholders vote in favour of it, it still awaits shareholder approval. If the deal is approved, the newly combined firm could have a market cap of nearly $7 billion, that would make it larger than Canopy Growth Corp.. , Canada’s biggest cannabis company for now.

This landmark deal follows Aurora’s $1.1 billion purchase of CanniMed Therapeutics that was just completed in early May and was, until now, the biggest deal in the Canadian cannabis market.

Now, some of the biggest LP brands in the country will be under one roof- Aurora, CanniMed, and MedReleaf.

The deal will enable Aurora to scale and lower costs, along with combining their supply network and capabilities with MedReleaf’s.

Under the conditions of the agreement, Aurora shareholders would have 69% with MedReleaf shareholders owning the remaining 31%.

“This is a transformational trade that brings together two pioneering cannabis businesses, both dedicated to high technology, high quality and low-cost production, to create a powerful platform for rapid expansion and success on a worldwide scale,” stated Terry Booth, CEO of Aurora.

MedReleaf CEO Neil Closner stated, “By combining with Aurora, an integrated producer with an exceptionally strong track record for execution, and deep domestic and international distribution capabilities, we’ll be ideally positioned to set the worldwide standard for our industry at a pace that will be tricky to match.

According to the Financial Post, now’s bargain between Aurora and MedReleaf puts BMO Capital Markets in second place (behind Canaccord Genuity) for advising on Canadian pharmaceutical acquisitions, which includes medical cannabis.

Featured image courtesy of O’Canna Biz.

Sources

CBC: Aurora Cannabis to buy MedReleaf in $3.2 billion takeover.

Cision: Aurora Cannabis to obtain MedReleaf.

Financial Post: Aurora scores MedReleaf for $3.2 billion in biggest pot deal yet.

Financial Post: Bank of Montreal muscles to bud M&A by advising Aurora in biggest deal yet.

Published at Mon, 14 May 2018 19:50:48 +0000

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