Aurora Cannabis Inc. (ACB.TO) (ACBFF) continues to execute on all cylinders and put its capital to work.
The licensed Canadian medical marijuana producer has over $300 million of cash on hand and the company has been using its stock as a currency to make strategic investments and acquisitions.
Although Aurora has been making significant moves like this all year, the acquisitions made yesterday are significant and further enhance the company’s long-term outlook. Today, we want to highlight the updates from yesterday and provide some insight into how these developments will further improve the company’s positioning.
Increases Potential Production Capacity
Yesterday, Aurora Cannabis increased its production capacity potential after it entered a binding share purchase agreement to acquire H2 Biopharma, a late-stage ACMPR applicant based in Lachute, Quebec. The acquisition will be Aurora’s fourth production facility in Canada and its second in Quebec.
H2 is currently completing a 48,000 square foot cannabis production facility, less than an hour from Montreal and near the Pierre-Elliott Trudeau International Airport. Upon completion (expected before the end of 2017), the facility is projected to produce approximately 4,500 kilograms of cannabis per year.
An initial payment of $10 million will be made, with further payments in consideration of the acquisition to be made upon the achievement of certain performance-related milestones, including completion of the facility, the granting of cultivation and sales licenses by Health Canada, and municipal approval for expansion of the facility. The total contingent consideration for the acquisition of H2, including closing and milestone payments, is $25 million and all payments will be satisfied through the issuance of Aurora common shares.
Makes Strategic Acquisition of Leading Greenhouse Builder
Yesterday, Aurora Cannabis signed a definitive agreement for the acquisition of Larssen Ltd. The terms of the transaction are undisclosed but include performance-based milestone payments, such as those related to profitability metrics, as well as certain Aurora standards. The company anticipates completing the acquisition within the coming weeks.
