Aurora Cannabis Inc. shareholders have received a thumbs up from advisory firms Institutional Shareholder Services Inc., or ISS, and Glass Lewis & Co. LLC to vote in favor of the company's acquisition of fellow Canadian medical cannabis company MedReleaf Corp.
Vancouver, British Columbia-based Aurora Cannabis in May agreed to buy MedReleaf in an all-share deal valued at about C$3.2 billion.
ISS and Glass Lewis in a July 6 release recommended that Aurora shareholders vote in favor of a resolution to move forward with the acquisition of the Markham, Ontario-based company. The ISS report noted that the combined companies will have a total funded capacity of 570,000 kg per year of high-quality cannabis. MedReleaf's high-yield cultivation is expected to enhance productivity and reduce costs for the combined entity's facilities.
"The proposed arrangement makes strategic sense as it combines two companies in the same cannabis segment with complementary assets and products, distribution networks, and capabilities," the ISS report said.
The advisory firms also recommended that Aurora stakeholders vote in favor of the proposed spinout of unit Australis Capital Inc., an investment company intended to acquire assets in the U.S. cannabis and real estate sectors.