- HEXO Corp. (TSX:HEXO) and Tilray Brands (TSX:TLRY) have closed a previously announced transaction
- The transaction between HEXO and Tilray solidifies the companies’ partnership and provides HEXO with a recapitalized balance sheet and financial flexibility
- HEXO and Tilray have also entered into several commercial agreements, providing the companies with cost-saving synergies and production efficiencies
- Under the terms of the agreement, Tilray acquired 100 per cent of the remaining outstanding principal balance of US$173.7 million from an amended note
- Shares of HEXO remain steady at C$0.27 while shares of Tilray are up 2.44 per cent to C$4.19 as of 4:10 p.m. EDT
HEXO Corp. (TSX:HEXO) and Tilray Brands (TSX:TLRY) have closed their previously announced transaction.
This transaction solidifies Tilray’s and HEXO’s partnership as one of Canada’s top cannabis alliances.
The transaction will also provide HEXO with a recapitalized balance sheet and the financial flexibility to accelerate itself as a cash flow-positive business within the next year.
“This partnership with Tilray Brands is a game-changer for HEXO,” said Charlie Bowman, CEO of HEXO Corp. “It provides us with the opportunity to reset the organization onto a path of profitable, sustainable growth and allows us to leverage our leading market share into becoming the preferred cannabis experience for consumers. We’re now able to proactively plan for the second half of 2022 and beyond, focusing on meeting evolving consumer demand and innovative product development.”
Tilray CEO Irwin D. Simon said the transaction gives the companies the opportunity to build Canada’s leading cannabis alliance.
“The partnership will create substantial synergies and commercial benefits, as well as allow us to capitalize on our respective strengths in product innovation, accelerating growth across global markets,” Simon added.
The strategic alliance will provide a range of financial and strategic benefits to HEXO, including:
- Deleveraging
- Operational flexibility
- Substantial synergies
- Increased product breadth and commitment to innovation
Additional terms of the transaction include Tilray acquiring 100 per cent of the remaining outstanding principal balance of US$173.7 million of the amended note.
The companies have also entered into various commercial agreements that will strengthen each company’s independent position and include: co-manufacturing, international sales, procurement and cost savings and advisory services and monthly fees.
Shares of HEXO remain steady at C$0.27 while shares of Tilray are up 2.44 per cent to C$4.19 as of 4:10 p.m. EDT.