Aphria Poised to Become a Latin America Cannabis Player

Aphria Inc. (TSX:APH) has acquired LATAM Holding from Scythian Biosciences Corp. (CSE:SCYB) for stock and assumption of debt

SmallCapPower | October 2, 2018: Aphria Inc. (TSX:APH) announced on September 27, 2018, that it has closed its acquisition of LATAM Holding from Scythian Biosciences Corp. (CSE:SCYB). Aphria acquired all of the issued and outstanding common shares of LATAM Holdings by issuing 15.7 million Aphria shares at a price of $12.31, plus assumption of $1 million in existing debt. The closing was pursuant to the terms of the definitive share purchase agreement announced on July 17, 2018.

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Aphria is consolidating operations in Latin America and the Caribbean regions through inorganic growth strategies – acquiring industry-leading cannabis companies in Colombia, Argentina and Jamaica as well as a right of first offer and refusal in respect of a majority interest in a Brazilian entity seeking a cannabis cultivation and sales license.

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Aphria Chief Executive Officer Vic Neufeld said, “Aphria continues to execute on its plans for strategic international expansion, including in Latin America and the Caribbean. With a combined population of nearly 640 million, and with significant momentum from numerous countries introducing new or modernizing existing medical cannabis legislation, the region represents a significant opportunity for long-term growth. It also hosts some of the most favorable conditions for cultivating high-quality medical cannabis at substantial efficiencies – ideal for both regional supply and export opportunities. This acquisition firmly cements Aphria’s leadership in the region and on the global cannabis stage.”

As a result of the Agreement, the Company has acquired a 90% ownership interest in Colcanna S.A.S, the first company in the Coffee Zone of Colombia with cultivation and manufacturing licenses for the production of medicinal extracts of cannabis; a 100% ownership interest in ABP, S.A., an established and successful pharmaceutical import and distribution company in Argentina; a 49% ownership interest in Marigold Projects Jamaica Limited, which has received one of the only Tier 3 cultivation licenses in the country to cultivate and conditional licenses to process, sell, provide therapeutic or spa services using cannabis products.

Aphria trades at a market capitalization of C$4.2 billion with a price-to-book multiple of 3.25x.

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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