Canopy Growth announces deal for rights to acquire Acreage Holdings

Canopy Growth (CGC) announces a definitive arrangement agreement that grants Canopy Growth the right to acquire 100% of the shares of and Acreage Holdings (ACRGF), with a requirement to do so at such time as cannabis production and sale becomes federally legal in the United States, subject to obtaining the requisite prior approval of the shareholders of each of Acreage and Canopy Growth, respectively, as well as the approval of the Supreme Court of British Columbia. Following the approval of Canopy Growth and Acreage shareholders as well as the Supreme Court of British Columbia, under the terms of the arrangement agreement, Acreage Holders will receive an immediate aggregate total payment of $300M or approximately $2.55 per Acreage Subordinate Voting Share based on the currently outstanding Subordinate Voting Shares of Acreage and conversion of certain convertible securities described below. In addition, upon the exercise of the Right, holders of subordinate voting shares of Acreage will receive 0.5818 of a common share of Canopy Growth for each Acreage Subordinate Voting Share held at the time of closing of the transaction. Upon exercise of the right, the total consideration payable pursuant to the transaction is valued at approximately $3.4B on a fully-diluted basis, represents a premium of 41.7% over the 30-day volume weighted average price of the Acreage Subordinate Voting Shares on the Canadian Securities Exchange ending April 16. "Today we announce a complex transaction with a simple objective. Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists. By combining Acreage's management team, licenses and assets with Canopy Growth's intellectual property and brands, there will be tremendous value creation for both companies' shareholders," said Bruce Linton, Chairman and co-CEO, Canopy Growth.

CGC

Canopy Growth

$42.83

1.08 (2.59%)

ACRGF

Acreage Holdings

$0.00

(0.00%)