RE:RE:RE:HEXO Merger or Acquisition ? (Here's Who & Why)igalaaq wrote: @Quinlash: don't you think that 3/4 of a billion in debt would scare away other LP's? I guess there is a number that the SP would need to reduce to in order to makes sense for any LP to want to acquire HEXO. For example the market cap plus the debt needs to make sense.
Marketcap is purely the current price of shares x the number of shares outstanding and will vary day over day, month over month etc as the SP changes. Basing the potential of a company based on nothing more than the market cap will leave you short when it comes to picking up those with the best upside potential.
I am sure total debt would be considered in any bid to acquire HEXO and would be part of the negotiations when settling on a price per share. The deal would need to be approved by shareholders so that calls for a vote.. again, why it is worthwhile considering this is something that the CEO is eluding to in the NR where it is noted that we will be voting on various items to the benefit of Shareholders.
You should be checking over the QTR report itself for current debt etc. Here are the highlights that were published by the company
Q1 2022 Highlights
Total net revenue increased 29% to $50.2 million from $38.7 million in Q4’21, and up 70% from the comparative quarter of fiscal 2021.
The Company closed its acquisitions of Redecan and 48North which contributed net revenues of $13.5 Million and $1.1 Million respectively during the two months ended October 31, 2022.
The Company’s total non-beverage gross margin before adjustments increased to 28% from 25% in the previous quarter.
Revising expected synergies from acquisitions to over $50M from previously reported $35M.
Forecasting positive cash flow within the next four quarters based on incremental cash flow of $37.5 million in fiscal 2022 and an additional $135 million in 2023 for a total of $175 million over the two years.
“We are taking immediate steps through our new strategic plan, The Path Forward, to strengthen our capital position, improve operations, accelerate organic growth and complete our transformation to be cash flow positive from operations within the next four quarters,” said Scott Cooper, President & CEO, HEXO. “Having visited all our core sites, and in meeting with our employees and customers, I am more confident than ever in HEXO’s future and our ability to accelerate the creation of short and long-term value for shareholders.”
The Path to Growth: A Strengthened Balance Sheet
As part of its plan to ensure the Company has adequate capital to meet its requirements, it is taking immediate action to reduce the dilutive effect of its senior secured convertible note (“Convertible Note”). The Company is working with investment banks, as well as its current debt holder towards a holistic solution to reduce its debt overhang.
The Company is actively evaluating alternatives in a manner which maximizes shareholder value. HEXO continues to be actively engaged in positive, ongoing conversations with its senior secured note holder on potential restructuring options of the note. As of December 14, 2021, USD$118 million and USD$375 thousand of principal on the Convertible Note has been redeemed and converted, leaving USD$241.625 million of principal outstanding.
Link to full Summary
https://www.globenewswire.com/news-release/2021/12/14/2351553/0/en/HEXO-Reports-First-Quarter-2022-Results-and-Launches-New-Strategic-Plan-The-Path-Forward-to-Solidify-its-Position-as-Canada-s-Leading-Cannabis-Company.html