Aurora’s $3.2B All-Stock Takeover Of MedReleaf

business

MedReleaf, a major Canadian licensed producer (LP) started the month of May by responding to market rumours, and The Globe and Mail coverage indicated that Aurora made a friendly offer for MedReleaf. Although they confirmed engaging “from time to time in discussions with other industry players,” MedReleaf denied entering into the agreement suggested by the media.

 

roottie-medreleaf-cannabis

 

Today, Aurora Cannabis has announced a deal to acquire MedReleaf (LEAF.TO) in an all-stock takeover valued at $3.2 billion.

roottie-aurora-canadaFor Aurora, MedReleaf is an admirable get. The LP earned Top Licensed Producer at the 2017 Lift Canadian Cannabis Awards, with a high-yield cultivation that could benefit from the lower production costs at Aurora’s automated greenhouses. And that’s not all.

 

  • Both companies are committed to excellence in innovation and medicinal solutions. 
  • Both hold a exceptionally strong track record for execution. 
  • Both companies have established distribution agreements with Alberta ‘s Alcanna (formerly Liquor Stores), Quebec’s SAQ, Pharmasave and Shoppers Drug Mart in Canada, and others. Combined, they have licensed agreements on five continents, including Germany, Italy, Brazil and Australia. 
  • Combined, they represent a mighty arsenal of products: San Rafael ’71, Woodstock, and AltaVie.
  • Both companies are actively engaged in initiatives to expand internationally.

 

The takeover agreement allows for an $80-million break fee, plus an additional $15-million reimbursement fee in certain circumstances. If a superior bid is presented for either MedReleaf or Aurora, the other company will have five business days to match it. Based on how the two companies closed the market on Friday, Aurora and MedReleaf have a combined market cap of over $7 billion. Subsequent to the deal closing, Aurora shareholders will own 61% of the combined cannabis company. MedReleaf shareholders will get 3.575 Aurora shares for each share held.

Top five Canadian bank, BMO (Capital Markets), served as financial advisor to Aurora, while Canaccord Genuity advised MedReleaf.

May 14, 2018

by Parker Wallace

Profile photo of Parker Wallace
Parker is a cannabis enthusiast to the core who shares a keen interest in listening to what others have to say and understanding what’s important to them. Those who know Parker know that his passion for health and wellness runs deep, and his love of Canada even deeper!

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