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[jayoneill]

OTTAWA and VANCOUVER, British Columbia, Feb. 16, 2021 (GLOBE NEWSWIRE) -- HEXO Corp. ("HEXO") (TSX: HEXO; NYSE: HEXO) and Zenabis Global Inc. ("Zenabis") (TSX: ZENA) are pleased to announce that they have entered into a definitive arrangement agreement (the "Arrangement Agreement") under which HEXO will acquire, by way of court-approved plan of arrangement under the Business Corporations Act (British Columbia), all of Zenabis’ issued and outstanding common shares in an all-share transaction valued at approximately $235 million (the "Transaction"). Under the terms of the Arrangement Agreement, Zenabis shareholders will receive 0.01772 of a HEXO common share in exchange for each Zenabis common share held (the “Exchange Ratio”). The Exchange Ratio implies a premium per Zenabis common share of approximately 19% based on the 20-day volume-weighted average price ("VWAP") of Zenabis common shares on TSX and HEXO common shares on TSX as of February 12, 2021. Warrants and incentive securities of Zenabis will be adjusted in accordance with their terms to ultimately become exercisable to receive common shares of HEXO based on the share exchange ratio. 

The Transaction was unanimously approved by the board of directors of each of HEXO and Zenabis (in the case of Zenabis’ board of directors, after receiving the unanimous recommendation of a special committee formed for purposes of the Transaction), and Zenabis’ board of directors unanimously recommends that its shareholders vote in favour of the Transaction.