Post by
WiTSL22 on Jan 28, 2021 12:33pm
Aphria AMA
Aphria Inc. AMA - January 27, 2021 Carl Merton CFO
The majority of our current M&A team is former Hain employees. That part of our team had great success with M&A at Hain, completing 55 deals while working together. I am sure they had one or two that they wish they could do something different on, but the vast majority were extremely successful. They grew a company in a new industry from scratch to over $3 billion in revenue. They had enormous success identifying companies with revenue between $30 million and $80 million (USD) and growing them into $200 to $300 million revenue companies (USD). We think that success, strategy and game plan can be applied to Latam and SweetWater and whatever is next on our list of acquisitions.
I think it is also important to understand the M&A landscape in 2018 versus the M&A landscape today. For us and many of our competitors, 2018 was about international expansion, it was about preparing for legalization in countries without a history of legal cannabis. There were risks associated with timing of legalization as well as also an expectation that cash burns were going to be incurred prior to realizing on those investments. This is what many investors expected and demanded.
The environment today is very different. We are very clear; we are not looking for investments that burn cash. We are looking for investments that have both significant topline growth and profitability trajectories, synergistic benefits with our brands, create (or enhance) distribution systems or allow us to leverage our existing footprint. Ultimately this management team will be judged based on our ability to deliver against that investment thesis.
Carl, thank you for being here!
With the details of the Tilray merger released, I'd like to know if there were any stalled talks with other LPs, MSOs, or drug/beverage giants that reignited as a result of the news. Has this forced anyone's hand, and brought potential partners back to the table, or is this merger the final nail in the coffin for stalled talks Aphria was in?
Cheers, and thank you again for taking the time to be here.
Bulahka – we don’t comment on rumours or speculation related to M&A.
The lawyers choked on their coffee when they read your question and just fell over when they read my response. They were expecting to have to censor whatever I wrote. I tricked them..
The following is my continued view that somehow at the end of the day Aphria will have an affect on our share price - positive or negative.
IMO - one thing is certain Aphria and Supreme have had conversation.
The questions are:
Did nothing come of it?
Does Supreme have takeaways that need to be dealt with to aid in the synergies and merger requirements of Aphria?
Did MM sell off shares because deal is dead? And now back to their old ways?
Did Supreme believe deal was to happen, now that it is off the table, they are scrambling to stay afloat again?
All just conjecture - but something to think of as we wait to be told WTF is going on.
Comment by
WiTSL22 on Jan 28, 2021 4:26pm
Certainly another possibility Johnale. For me, not a great scenario. Each aquisition will come at the expense of the shareholder for some time to come. Great long term plan though. Who knows, maybe a prerequsite to an Aphria deal. :)
Comment by
tongyboi on Jan 28, 2021 8:06pm
That's a lot of shares combined with the 2 companies LOL. 1.4 billion? hahahah. oh man, dust will have to settle on that one to invest.
Comment by
RetailInvestor9 on Jan 28, 2021 8:47pm
I agree, however that's one of many reasons why it may end up working out and it all depends on how a merger is structured... Anyway, as things stand today all this is at best a guess.