HEXO Corp. (
TSX.HEXO) and
Zenabis Global Inc. (TSX-V.ZENA) have entered into a definitive 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 deal, which will see Hexo acquire two indoor growing facilities and get access to a greenhouse, comes as the Canadian pot market is starting to consolidate amid talk of potential U.S. cannabis legalization.
Sebastien St-Louis, CEO and co-founder of HEXO Corp., commented:
“We're thrilled to welcome the Zenabis team into the HEXO family. Zenabis has built solid relationships and they share HEXO’s vision of bringing exceptional branded cannabis experiences to adults everywhere, in Canada and abroad. We are proceeding with this transaction because we believe it should be accretive for our shareholders, and it also positions HEXO for accelerated domestic and international growth while supporting near-term requirements for additional licensed capacity. HEXO’s growth strategy includes expanding our global presence, and this acquisition is an important step in that direction.”
Both HEXO and Zenabis's stocks were up by almost 20% in early Tuesday trading, bringing HEXO's to $11.19 and Zenabis’s to $0.19.
By late afternoon HEXO shares retained the increase, while Zenabis shares were up by about 16%
Full news release
here.
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