April 10, 2023 at 9:49 pm
A cannabis company called Tilray Brands Inc. announced plans to buy rival Hexo Corp. for $56 million.
On Monday, Tilray officials said the company had reached a “definitive agreement” to combine its Leamington-based plant with Quebec-based Hexo Gatineau.
Tilray also said it would issue 0.4352 shares for each Hexo share in the deal, which still requires shareholder and court approval and is expected to close in June. Tilray CEO Irwin D. Simon said in a statement that the company looks forward to focusing on becoming a “leading” and “diversified” cannabis lifestyle company.
“We are very excited about our shared prospects with Hexo and look forward to seamlessly integrating Hexo’s business into our efficient and durable platform,” said Simon. “At the same time, we will continue to focus relentlessly on cost and operational efficiencies, and strengthen our industry-leading balance sheet to deliver continued profitable growth and shareholder value.”
Hexo Chairman Mark Attanasio said that because of the cannabis industry’s recent hurdles, board members determined its shareholders would benefit from being part of Tilray’s business, adding that they had plans in place to strengthen both brands.
“When we began working with Tilray last year, the value that could be realized by combining our businesses in order to compete and drive profitable growth in the highly fragmented Canadian market was immediately apparent,” Attanasio said in a statement. “With Irwin and his leadership team, we are confident our brands will continue to grow and thrive as part of Tilray Brands.”
Before announcing the merger, Tilray reported a net loss of $1.2 million in its fiscal third quarter ended Feb. 28, compared with net income of $52.5 million in the same quarter in 2022.