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article imageAurora Cannabis to acquire MedReleaf in $3.2 billion deal

By Karen Graham     May 14, 2018 in Business
Toronto - In the largest acquisition to date in the Canadian marijuana industry, Aurora Cannabis will acquire MedReleaf Corp. for C$3.2 billion ($2.51 billion) in an all-stock transaction.
Under the terms of the Arrangement Agreement, announced by the companies on Monday, holders of MedReleaf common shares would get 3.575 common shares of Aurora for each MedReleaf common share held - called an “Exchange Ratio."
When the transaction is finalized, Aurora shareholders will own close to 61 percent of the newly combined company, following the all-stock deal, while MedReleaf shareholders would own about 39 percent of the new company, according to the press release.
Aurora offered to buy all the MedReleaf shares for C$29.44, representing an 18.2 percent premium to MedReleaf’s Friday closing price, according to Reuters.
“Our complementary assets, strategic synergies, and strong market positioning will provide us with critical mass and an excellent product portfolio in preparation for the adult consumer use market in Canada,” Aurora chief executive Terry Booth said in a statement, reports Toronto City News.
About the two companies
Edmonton, Ontario-based Aurora Cannabis is Canada's second largest federally regulated, publicly traded cannabis producer. As of April 2018, Aurora is the fastest growing cannabis company in North America, with a market value of C$4.5 billion and revenue in 2017 totaling C$31.1 million, according to Market Watch.
Markham, Ontario-based MedReleaf Corp. is an R&D-driven company dedicated to innovation, operational excellence and the production of top-quality cannabis. The company has two state of the art ICH-GMP and ISO 9001 certified facilities in Ontario allowing them to deliver a variety of premium products for the global medical market.
On May 1, MedReleaf moved up to the No. 3 position among Canada’s most capitalized cannabis companies, right behind Canopy Growth, in the No. 1 position, and Aurora Cannabis in the No. 2 position, according to Midas Letter Live.
The combined companies will have nine production facilities in Canada and two in Denmark and distribution agreements with Alcanna liquor stores in Alberta, SAQ provincial liquor stores in Quebec, Pharmasave and Shoppers Drug Mart.
In a separate announcement on Monday, Aurora’s chief rival Canopy Growth said it would buy out a stake in a British Columbia joint venture and also announced a plan to list its shares on the New York Stock Exchange.
More about aurora cannabis, MedReleaf, allstock transaction, Marijuana, Canada
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