Aurora Cannabis to acquire remaining interest in Hempco Food and Fiber
Aurora Cannabis and Hempco Food and Fiber announced that the companies have entered into a binding letter agreement in regard to the basic terms and conditions upon which Aurora will acquire all of the issued and outstanding common shares of Hempco not already owned by Aurora. In consideration of the transaction, Aurora has agreed to pay $1.04 per Hempco Share, payable in common shares of Aurora, reflecting a valuation of approximately C$63.4M on a fully diluted basis. Hempco's Board of Directors have determined that the proposed Transaction is in the best interest of shareholders, having taken into account advice from its financial advisor and the recommendation of the special committee of the Board of Directors, and have approved the Transaction. Under the terms of the Letter Agreement, the proposed Transaction is expected to be effected by way of a court approved plan of arrangement under the Business Corporations Act or by way of an alternate structure as determined by Aurora and Hempco based upon tax, securities and corporate law and other relevant considerations. Aurora has agreed to pay $1.04 per Hempco Share, payable in Aurora Shares at a deemed value of $12.01 per Aurora Share, being the volume-weighted average trading price of Aurora Shares on the Toronto Stock Exchange in the five trading days immediately prior to the date of the Letter Agreement. Hempco's outstanding options and warrants will be adjusted in accordance with their terms such that the number of Aurora Shares received upon exercise and the exercise price will reflect the Exchange Ratio. As Aurora owns approximately 52% of the issued and outstanding Hempco Shares, it is expected that the Transaction would constitute a "business combination" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Shareholders in Special Transaction and that Hempco will obtain a formal valuation and a fairness opinion from an independent valuator. Upon completion of the Transaction, Hempco will become a wholly owned subsidiary of Aurora and Hempco's shares will be de-listed from the TSX Venture Exchange and it is expected that Aurora will apply to cause Hempco to cease being a reporting issuer under applicable Canadian securities laws. It is currently expected that, subject to receipt of all regulatory, court, shareholder and other approvals, and the satisfaction or waiver of all conditions, the Transaction will be completed in the second quarter or such other date as the parties may agree. The parties expect to execute a Definitive Agreement on or before May 15.