Newstrike Buy OutYou might recall Hexo buying out Newstrike (HIP) - and then selling that facility due to oversupply and lack of demand.
Now - despite having 1.3 million sq ft themselves that's not fully planted out (due to oversupply and lack of demand), HEXO is merging with Zenabis and taking on an additional 380,000 sq ft in Atholville, 255,000 in Stellarton and a lease/access to 435,000 sq ft in Langley.
Zenabis's own information indicates they produce/utilize only 50% of their sq footage available - due to oversupply and demand.
Additionally, while it's an all share deal - Hexo would be absorbing Zena's debt - which remains over $100 million total, short and long term.
So - if we agree that they don't actually need he production area right now and that they're simply trying to be an Aphria/Tilray and ACB player in Europe - it's just Zena's EU-GMP certification they were after.
If they have to address the debt theyr'e acquiring but have Eurpean expansion plans - it'll be interesting to see Hexo's moves in the next few years - but you'd think they'll withdraw from the Langley lease? and that there'll be facility sales?
Technically, if they ever actually do something with the U.S., Truss and Europe/Isreal sales - they just might be a player after all.
Good deal for Hexo.
As for Zena shareholders and 'the deal' - after all tehse years of incompetent mis-management, Zena shares are worth about .19 cents at close tonight.
Yikes! All that shareholder loyalty, despite bad move after bad move - .02 lousy cents for your trouble, but don't worry about your CEO and Board - they'll be fine.