- Curaleaf (TSX:CURA) intends to make a takeover bid for Aurora Cannabis (TSX/NASDAQ:ACB) at US$4 per share, representing a 45 per cent premium to the company’s 30-day volume-weighted average price, which would make the resulting entity one of the largest and most diversified cannabis companies in the world.
- Curaleaf stock has added 16.14 per cent year-over-year.
- Aurora Cannabis stock is up by 13.90 per cent on the news, but has given back 36.07 per cent year-over-year.
Curaleaf (TSX:CURA) intends to make a takeover bid for Aurora Cannabis (TSX/NASDAQ:ACB) at US$4 per share, representing a 45 per cent premium to the company’s 30-day volume-weighted average price, which would make the resulting entity one of the largest and most diversified cannabis companies in the world.
The cash and shares deal, capped at US$5 per share or an 82 per cent premium, follows Curaleaf’s repeated attempts to engage with Aurora privately, as detailed in Tuesday’s news release, prompting the company to make its intentions public.
This article is a journalistic opinion piece which has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Curaleaf’s rationale for the acquisition, laid out in the news release, focuses on the combined companies’ global platform, which would expand to 17 countries, strengthened by European and North American EU-GMP manufacturing, Aurora’s medical cannabis leadership position, and an attractive financial profile of more than US$1.5 billion in revenue and almost US$350 million in adjusted EBITDA over the past year to foster future growth.
Curaleaf estimates that Aurora would enable at least US$40 million in annual cost synergies, not counting potential value from integrating its extensive genetics portfolio across Aurora’s facilities.
Aurora shareholders would, in turn, gain extensive exposure to the US market, as highlighted by Curalef’s leading positions in strategic states and product categories, positioning them to benefit from potential federal legalization.
The transaction remains subject to a formal takeover bid to be filed with Canadian securities regulatory authorities and the US Securities and Exchange Commission and mailed to shareholders.
Leadership commentary
“We believe this combination represents a win-win for Curaleaf and Aurora shareholders. We are offering Aurora shareholders a unique opportunity to participate in a more highly diversified global platform and increase their exposure to US regulatory tailwinds,” Boris Jordan, Chair and Chief Executive Officer of Curaleaf, said in a statement. “By combining Curaleaf’s global distribution platform with Aurora’s leading international medical cannabis franchise and EU-GMP cultivation and manufacturing capacity, we see significant potential to unlock value through substantial cost and revenue synergies.”
“We approached Aurora privately and constructively on multiple occasion,” Jordan added. “We were very disappointed that the board refused to meaningfully engage. We will now take our proposal directly to Aurora shareholders because the premium is significant, the strategic rationale is compelling and further delay is unjustified. Curaleaf remains ready to engage constructively with Aurora’s board to advance this value-maximizing transaction, and we are prepared to move quickly towards a definitive agreement.”
About Curaleaf Holdings
Curaleaf is a top international cannabis consumer products provider. Its brand portfolio includes Curaleaf, Select, Grassroots, Find, Anthem and Dark Heart.
Curaleaf stock (TSX:CURA) is up by 1.22 per cent on the news, trading at C$13.24 as of 9:39 am ET. The stock has added 16.14 per cent year-over-year.
About Aurora Cannabis
Aurora Cannabis is a top medical cannabis company serving markets in Canada, Europe, Australia and New Zealand. Its brand portfoio includes Aurora, MedReleaf, Pedanios, IndiMed, San Raf and Whistler Medical Marijuana Corporation.
Aurora Cannabis stock (TSX/NASDAQ:ACB) is up by 13.90 per cent on the news, trading at C$4.59 as of 9:44 am ET. The stock has given back 36.07 per cent year-over-year.
Join the discussion: Find out what investors are saying about these cannabis stocks on the Curaleaf Holdings Inc. and Aurora Cannabis Inc. Bullboards and make sure to explore the rest of Stockhouse’s stock forums and message boards.
