HEXO Corp (NYSE-A: HEXO) just announced that it has entered into a definitive agreement to fully acquire Newstrike brands Ltd. (TSX-V: HIP).
The agreement is an all-share transaction that acquires all of the outstanding and issued common shares of HIP for an estimated $263 million in HEXO shares. This transaction has been previously approved with a unanimous decision by the board of directors in both corporations. The board of directors within Newstrike has recommended to shareholders of HIP to vote for the transaction.
Sebastien St-Louis, Chief Executive Officer and Co-founder of Newstrike, stated: “We’re thrilled to welcome the Newstrike team into the HEXO family. Jay Wilgar (CEO of Newstrike) and his team have built incredible relationships, including teaming up with The Tragically Hip, and they share HEXO’s vision of bringing exceptional branded cannabis experiences to adults everywhere. With Newstrike, we’re adding talented employees and infrastructure to take HEXO to the next level on our journey to become one of the largest cannabis companies in the world. We’re extremely proud of our record of execution, and today are committing to achieving over $400 million in net revenue in 2020.”
The transaction is yet to receive the minimum 2/3% votes from shareholders that are in favor of the acquisition in order to proceed. After completion of the acquisition, HEXO shareholders would own 86% of the combined entity and former HIP shareholders would own 14%.
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