Canada's Aurora Cannabis Inc. said it was acquiring ICC Labs Inc. in a C$290 million deal that would increase its presence in the South American cannabis market.
ICC Labs, also based in Canada, is a licensed producer of cannabis in both Colombia and Uruguay, and also has necessary approvals to distribute medicinal cannabinoid extracts, recreational cannabis and industrial hemp products in the latter country, where it holds 70% of the market share.
Aurora said it will pay C$1.95 for every ICC share it acquires, representing a 34% premium to the 20-day average weighted price of the target company on the TSX Venture Exchange for the period ended Aug. 22.
The payment will be made in Aurora shares, meaning each ICC shareholder will receive 0.2448 of a common stock of the company for a total of 36.2 million new shares.
Union Group International Holdings Ltd., which holds 29% of ICC, has consented to the agreement, which also has the backing of ICC's board, which asked that shareholders approve it in a meeting scheduled for later this year.
ICC shareholders will represent about 3.6% of outstanding Aurora shares following deal completion during the fourth quarter of 2018, once customary regulatory and other conditions are met.
Canaccord Genuity Corp. is acting as financial adviser to ICC and Norton Rose Fulbright Canada LLP is acting as legal counsel to ICC. INFOR Financial Inc. was also engaged by the ICC Board as an independent financial adviser.
McMillan LLP is acting as legal counsel to Aurora.
The announcement is the latest in a list of buys Aurora has announced this year, the largest of which were that of MedReleaf Corp. for C$3.2 billion and CanniMed Therapeutics for C$1.1 billion.