Aurora Cannabis Inc. agreed to buy fellow Canadian medical cannabis company MedReleaf Corp. in an all-share deal valued at about C$3.2 billion.
The deal is the largest transaction Aurora has announced so far this year. The company has been proactively investing in and acquiring stakes in fellow cannabis companies, including CanniMed Therapeutics Inc., which it agreed to buy for C$1.1 billion.
Vancouver, Canada-based Aurora will issue 3.575 of its share for every MedReleaf stock it acquires, valuing the target company's stock at C$29.44 — a 34% premium to its 20-day volume weighted average price on the Toronto Stock Exchange as of May 11.
Aurora shareholders will own about 61% of the combined company, with MedReleaf investors owning the remaining 39%. The combined company's board will comprise eight members, of which two — Norma Beauchamp and Ronald Funk — will join from MedReleaf.
The deal, which is backed by the boards of both companies, is subject to the approval of at least 66.7% of MedReleaf's shareholders.
BMO Capital Markets is acting as the exclusive financial adviser to Aurora, and McMillan LLP is acting as its legal counsel.
Canaccord Genuity is acting as the exclusive financial advisor to MedReleaf, which also received an independent financial diligence report from Deloitte LLP.
Stikeman Elliott LLP is acting as legal counsel to MedReleaf, and Davies Ward Phillips & Vineberg LLP is acting as legal counsel to the company's shareholders.
