trending Market Intelligence /marketintelligence/en/news-insights/trending/q_p9EgrTu4aLGT2hStdDQQ2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

HEXO acquiring Newstrike Brands in C$263M all-share deal

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020

HEXO acquiring Newstrike Brands in C$263M all-share deal

Canadian cannabis company HEXO Corp. will acquire Toronto-based Newstrike Brands Ltd. in an all-share transaction valued at about C$263 million.

Newstrike is the parent company of Up Cannabis Inc., a licensed producer of cannabis that is licensed to both cultivate and sell cannabis in all acceptable forms.

Under the terms of the transaction, Newstrike shareholders will receive 0.06332 of a HEXO common share for each Newstrike common share held.

HEXO shareholders will own about 86% and Newstrike shareholders will own 14% of the combined company after the completion of the deal.

In a March 13 news release, HEXO said the acquisition has been approved by boards of both companies and that Newstrike's board is advising shareholders to vote in favor of the deal.

Completion of the deal is subject to approval from Newstrike's shareholders at a special meeting, the receipt of certain regulatory court and stock exchange approvals and the satisfaction of other customary conditions.

HEXO, a packaged goods cannabis company, has entered into irrevocable hard voting support agreements with Newstrike's directors and officers, along with certain other shareholders, which represent about 25% of Newstrike's issued and outstanding common shares.

The deal includes a termination fee of C$7.5 million payable by Newstrike to HEXO if the agreement is terminated in certain specified circumstances, as well as a reciprocal C$1 million expense reimbursement fee to either party if the deal is terminated based on certain other specified cases.

The transaction will bolster HEXO's cannabis production capacity through the acquisition of cultivation space.

In addition, the acquisition will help HEXO achieve diversified domestic market penetration since the two companies combined have distribution agreements in eight provinces of Canada including Ontario, Quebec, British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia and Prince Edward Island.

RBC Capital Markets is acting as the exclusive financial adviser to Newstrike, with Stikeman Elliott LLP as legal counsel. Osler Hoskin & Harcourt LLP is acting as legal counsel to special committee of the board of Newstrike. Norton Rose Fulbright Canada LLP is acting as legal counsel to HEXO.

Financial outlook

HEXO estimates net and gross revenues from the sale of cannabis in Canada for fiscal 2020 will be in excess of C$400 million and C$479 million, respectively, assuming the completion of the deal. In addition, the combined entity is estimated to realize annual synergies of C$10 million.