Canopy Growth Corporation and the Supreme Cannabis Company announced today that they have entered into a definitive arrangement agreement under which Canopy will acquire all of Supreme Cannabis’ issued and outstanding common shares.
The value of the transaction is approximately $435 million dollars on a fully-diluted basis.
Supreme Cannas Company has a hybrid greenhouse cultivation facility in Kincardine, Ontario which has a capability of producing product at a low cost with potential of scaling.
The arrangement sees Supreme Cannabis share holders receive 0.01165872 of a Canopy common share and $0.0001 in cash in exchange for each Supreme Cannabis Share held.
This is a 66% premium on the closing price of both companies common shares on the TSX as of April 7th.
The deal needs to be approved by at least two-thirds of the votes cast by the shareholders of Supreme Cannabis at a special meeting of shareholders at the end of June 2021.
Canopy has the support of certain of Supreme Cannabis’ directors and officers in which they commit to voting their Supreme Cannabis Shares in favour of the Transaction.
The deal is also subject to regulatory approvals from the TSX and approval under the Competition Act in Canada.
The deal has a termination fee of $12.5 million payable to Supreme Cannabis by Canopy in certain circumstances if the deal is not finalized.
