Canopy Growth Corporation (TSX: WEED) said it has acquired New Brunswick-based Spot Therapeutics Inc.
SmallCapPower | August 29, 2017: Canopy Growth Corporation (TSX: WEED) Monday announced that it has acquired Spot Therapeutics Inc., an ACMPR applicant based in Fredericton, New Brunswick. Additionally, through an affiliated entity, the Canopy Growth has entered into a definitive agreement to complete the previously-announced purchase of the industrial building and property where the Company’s Fredericton-based production and distribution platform is being established. These strategic acquisitions solidify Canopy Growth’s commitment to expand operations into New Brunswick with a large-scale indoor production facility cost efficiently.
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The facility will operate under the Tweed brand and support the Company’s global operations with high quality, large scale cannabis production capabilities. The existing building and infrastructure is in excellent condition and includes almost 40,000 sq. ft. of dedicated production space. Once licensed, this initial footprint is anticipated to produce over 4,000 kg of dried cannabis annually, which will double the current production of 4,500 kg from Canopy Growth. With the property appropriately zoned and suited for expansion to over 100,000 sq. ft., this location creates an ideal platform for future growth.
Under the terms of the transaction, shareholders of Spot will receive up to $2,250,000 in total consideration, less adjustments for all liabilities of Spot as of the closing date and certain payments to be made by Spot between closing and the second tranche payment. At closing, and in satisfaction of the first tranche payment of $1 million, Canopy Growth issued 111,669 common shares to the shareholders of Spot. The second tranche payment will be satisfied by the issuance of additional common shares, subject to completion of certain licensing and operational milestones. Closing of the acquisition of the industrial building and property in Fredericton is anticipated in early September.
In terms of valuation, Canopy Growth Corporation currently trades at TTM price to sales value of 31.17x, price to book value of 2.40x, and forward P/E of 49.44x.
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