HEXO Corp (HEXO)

[edzon]

HEXO announces agreement to acquire Zenabis Global in all-share transaction valued at approx. $235 mln (halted)
11:32 AM ET 2/16/21 | Briefing.com
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2:28 PM ET 2/16/21
Symbol Last % Chg
HEXO
8.59 15.47%
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HEXO and Zenabis Global have entered into a definitive arrangement agreement under which HEXO will acquire all of Zenabis' issued and outstanding common shares in an all-share transaction valued at approx. $235 mln. Under the terms of the arrangement agreement, Zenabis shareholders will receive 0.01772 of a HEXO common share in exchange for each Zenabis common share held. The exchange ratio implies a premium per Zenabis common share of approx. 19% based on the 20-day volume-weighted average price of Zenabis common shares on TSX and HEXO common shares on TSX as of February 12.HEXO estimates that the combined entity may realize annual synergies of approx. $20 mln within one year of close, through cost of goods reductions, additional capacity utilization in HEXO's Belleville Centre of Excellence, and selling, general, and administrative savings, which, if realized, should allow HEXO to continue its path towards positive earnings. The transaction gives HEXO immediate access to the European medical cannabis market through Zenabis' local partner, with an established facility in the EU supplying pharmaceutical products to the European market. The proposed transaction would give HEXO access to licensed capacity to produce approx. 111,200 kg of additional high-quality cannabis annually.