Canadian cannabis company Aurora Cannabis is selling its entire stake in Alcanna to an underwriting syndicate led by Cormark Securities Inc.
Canada-based Alcanna is one of the largest private sector retailers of alcohol in North America and the largest in Canada by number of stores, operating 231 locations in Alberta and British Columbia. The company also operates 31 cannabis retail stores under the “Nova Cannabis” brand.
Alcanna and Aurora Cannabis said they have entered into an agreement with a syndicate of underwriters led by Cormark Securities Inc., under which the underwriters will buy 9.2 million common shares of Alcanna currently held by Aurora Cannabis on a “bought deal” basis.
The underwriting syndicate will purchase the shares for C$3.00 per share and offer them to the public by way of short form prospectus for total gross proceeds to Aurora of about C$27.6 million. The underwriters have not been granted an over-allotment option.
The shares being sold represent about 23 percent of the issued and outstanding common shares of Alcanna. Following the share sale, Aurora will no longer own any shares in Alcanna.
The net proceeds from the offering will be paid directly to Aurora Cannabis, while Alcanna will not receive any proceeds. The closing of the offering is expected to occur on or about June 24, 2020.
Aurora Cannabis initially acquired a nearly 20 percent stake in Alcanna in early 2018 and later raised its holding to about 25 percent.
Following the initial investment by Aurora Cannabis, Alcanna had said it intends to use the net proceeds to launch a brand of cannabis retail outlets and to strengthen its liquor retail brands.
Under a license agreement in August 2018, Alcanna was given exclusive rights by Aurora Cannabis to open retail cannabis stores under the brand name “Aurora” across Canada.
In late May, Aurora Cannabis announced its entry into the lucrative U.S. marijuana market with its acquisition of Massachusetts-based Reliva LLC, a seller of hemp-derived cannabidiol or CBD products.
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Source: https://mmpconnect.com/aurora-cannabis-to-sell-entire-stake-in-alcanna/
