Aurora Cannabis to Buy CanniMed for $1.1 Billion

Aurora Cannabis and CanniMed Therapeutics Agree to Terms on Friendly Transaction

CanniMed’s Board and Special Committee Support Aurora’s Offer of Shares and Cash

January 24, 2018

EDMONTON, Alberta & SASKATOON, Saskatchewan–(BUSINESS WIRE)–Aurora Cannabis Inc. (“Aurora”) (TSX: ACB) (OTCQB: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) and CanniMed Therapeutics Inc. (“CanniMed”) (TSX: CMED) announce today that they have entered into a support agreement (the “Support Agreement”) whereby the Board of Directors and the Special Committee of the CanniMed Board have agreed to support a new offer made by Aurora for the acquisition of all of the issued and outstanding shares of CanniMed not owned by Aurora. In addition to the Board and Special Committee, the new offer (“New Offer”), as described below, will continue to be supported by certain CanniMed shareholders (the “Locked-up Shareholders”) representing 36% of CanniMed’s outstanding shares and by Brent Zettl, President and CEO of CanniMed.

Key Transaction Highlights

Under the New Offer, CanniMed shareholders may receive in respect of each CanniMed share, 3.40 Aurora shares or a combination of cash and shares at the election of each CanniMed Shareholder, subject to pro-ration with the maximum aggregate cash consideration of $140 million. Based on an implied Aurora share price of $12.65 and the 3.40 exchange ratio, the New Offer would equate to $43.00, representing a 181% premium over the closing price of CanniMed Shares on November 14, 2017, the last day prior to the public disclosure of Aurora’s intention to pursue a combination with CanniMed, and a 79% increase to the previous offer Cap Price of $24.00.

The total consideration for CanniMed under the New Offer is approximately $1.1 billion based on Aurora’s implied share price of $12.65. The maximum amount of cash available under the amended offer will be $140 million, and the number of Aurora shares to be issued will be between approximately 72 million (assuming full cash elections) and 84 million (assuming full share elections and no cash elections). Assuming maximum cash elections, each CanniMed shareholder would receive $5.70 in cash and 2.9493 Aurora shares.

Support Agreement

The Support Agreement provides that CanniMed will support the New Offer and will recommend to its shareholders in an amended directors circular that CanniMed Shareholders will tender to the Aurora New Offer. In addition to the foregoing, Aurora will receive customary non-solicitation protection and a right to match any competing proposal made to CanniMed and a break fee payable to Aurora in certain circumstances, together with customary representations and warranties. In addition to the Locked-up Shareholders certain CanniMed shareholders representing approximately 15% of the issued shares of CanniMed, including Brent Zettl, Chief Executive Officer, have agreed to support the New Offer.

The New Offer and the transaction are subject to customary closing conditions, including Canadian Competition Act approval.

Termination of Newstrike Arrangement Agreement

In connection with the New Offer, CanniMed has entered into a termination agreement with Newstrike Resources Ltd. (“Newstrike”), terminating the arrangement agreement between Newstrike and CanniMed, resulting in the payment of a $9.5 million break fee paid to Newstrike. As a result, the CanniMed shareholder meeting originally scheduled for January 23, 2018 and adjourned to January 25, 2018 has been cancelled.

Management Commentary

We are very pleased to have come to terms with CanniMed on this powerful strategic combination that will establish a best-in-class cannabis company with operations across Canada and around the world. Market recognition of Aurora`s continued performance and strategy execution since we first announced our intention to acquire CanniMed allows us to share that benefit directly with CanniMed shareholders by increasing the offer price, as well as by offering a cash component.

Terry Booth, CEO of Aurora

The amended offer includes value certainty and represents a full, compelling and immediate 75% premium over CanniMed’s 20-day average price ending January 17, 2018, the day prior to CanniMed and Aurora disclosing they were in discussions. Aurora now invites CanniMed shareholders to share in Aurora’s ongoing growth, as we continue to create superior shareholder value, by joining with the CanniMed Board of Directors and tendering their shares to our amended offer.

Brent Zettl, President and CEO of CanniMed, added, “A testament to the great team at CanniMed, this transaction clearly confirms that the Company has been highly successful in becoming a preeminent global leader in the medical cannabis industry. In this leadership position, CanniMed has provided invaluable education, resources, support and relief of symptoms for thousands of patients served around the globe.”

“This is an excellent outcome for both Aurora’s and CanniMed’s shareholders after a hard-fought and diligently negotiated process,” said Cam Battley, Aurora’s Chief Corporate Officer. “We now look forward to warmly welcoming CanniMed’s employees and forging one unified team. Together, under the Aurora banner we’ll continue to invest in domestic and international growth, and continue executing on our strategy of building the most dynamic, innovative integrated cannabis company in the world.”


Canaccord Genuity Corp. is acting as financial advisor to Aurora, McMillian LLP is acting as legal advisor and Laurel Hill LLP is acting as strategic shareholder advisor. Kingsdale Advisors is acting as strategic shareholder and communications advisor to CanniMed, AltaCorp Capital Inc. is acting as financial advisor to the board of CanniMed and Borden Ladner Gervais LLP is acting as legal advisor to the board of CanniMed. Cormark Securities Inc. is acting as financial advisor to the Special Committee of CanniMed and Stikeman Elliott LLP is acting as legal advisor to the Special Committee.

About Aurora

Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, known as “Aurora Mountain”, a second 40,000 square foot high-technology production facility known as “Aurora Vie” in Pointe-Claire, Quebec on Montreal’s West Island, and is currently constructing an 800,000 square foot production facility, known as “Aurora Sky”, at the Edmonton International Airport, as well as is completing a fourth facility in Lachute, Quebec through its wholly owned subsidiary Aurora Larssen Projects Ltd. The Company owns a 17.62% interest in the Green Organic Dutchman, as well as a 51% interest in Aurora Nordic, which is constructing a 1,000,000 hybrid greenhouse similar to Aurora Sky. Including prorated participations, Aurora is on track for a total production capacity of around 200,000 kg per annum.

In addition, the Company holds approximately 17.23% of the issued shares in leading extraction technology company Radient Technologies Inc., based in Edmonton, and is in the process of completing an investment in Edmonton-based Hempco Food and Fiber for an ownership stake of up to 50.1%. Furthermore, Aurora is the cornerstone investor with a 22.9% stake in Cann Group Limited, the first Australian company licensed to conduct research on and cultivate medical cannabis. Aurora also owns Pedanios, a leading wholesale importer, exporter, and distributor of medical cannabis in the European Union, based in Germany. The Company offers further differentiation through its acquisition of BC Northern Lights Ltd. and Urban Cultivator Inc., industry leaders, respectively, in the production and sale of proprietary systems for the safe, efficient and high-yield indoor cultivation of cannabis, and in state-of-the-art indoor gardening appliances for the cultivation of organic microgreens, vegetables and herbs in home and professional kitchens. Aurora’s common shares trade on the TSX under the symbol “ACB”.

About CanniMed

CanniMed is a Canadian-based, international plant biopharmaceutical company and a leader in the Canadian medical cannabis industry, with 17 years of pharmaceutical cannabis cultivation experience, state-of-the-art, GMP-compliant production process and world class research and development platforms with a wide range of pharmaceutical-grade cannabis products. In addition, the Company has an active plant biotechnology research and product development program focused on the production of plant-based materials for pharmaceutical, agricultural and environmental applications.

The Company, through its subsidiaries, was the first producer to be licensed under the Marihuana for Medical Purposes Regulations, the predecessor to the current Access to Cannabis for Medical Purposes Regulations. It was the sole supplier to Health Canada under the former medical marijuana system for 13 years, and has been producing safe and consistent medical marijuana for thousands of Canadian patients, with no incident of product diversion or recalls.

For more information, please visit our websites: (patients) and (investors).

Original press release

Published by NCV Newswire
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