Canopy Growth Corp. (TSE:CGC) would dominate the Canadian market
Canopy Growth Corp. (TSE:CGC) has offered to acquire Toronto-based Mettrum Health Corp. (CVE:MT) for $430 million, forming a Canadian marijuana mega-company with a patient base that would dominate the Canadian market.
The all-stock definitive agreement announced early Thursday would see Canopy add two brands to its portfolio and increase its production capacity to six licensed facilities and 665,000 sq. ft. It also diversifies its offerings into hemp through Mettrum Originals. Smith Falls, Ont.,-based Canopy already owns the Tweed and Bedrocan Canada brands.
A combined company would have some 39,730 patients as of Sept. 30 — nearly half of Canada’s current medical marijuana patient base.
“From day one, Canopy Growth has viewed production capacity, brand diversity, and highly-skilled management as the foundational aspects of our business,” said Bruce Linton, Chairman and CEO of Canopy Growth.
“Their substantial production facilities will add to our growing production platform as we expand to meet the needs of patients, and their experienced personnel will help Canopy Growth drive our vision forward to the next level.”
Canopy is on the hunt for growth opportunities, looking to deploy its post-Mettrum acquisition cash balance of $68 million into further investments ahead of Canada’s legalization of a recreational market for the burgeoning global sector.
Mettrum shareholders will receive 0.71 shares — worth $8.42 based on Canopy’s closing price Wednesday — for every Mettrum stock — about 42 per cent higher than its closing price of $5.92 per share on the TSX Venture Exchange.
Mettrum, valued at some $282 million based on Wednesday’s closing price, reported a loss of $1.9 million on revenues of $4.8 million in its latest quarter, ended Sept.30.
Read the full article at: business.financialpost.com
