Ottawa-area marijuana producer Canopy Growth Corp. (TSX:CGC) is offering to buy Mettrum Health Corp. (TSXV:MT) in a friendly all-stock deal valued at $430 million.
Mettrum shareholders will be entitled to receive 0.7132 of a common share of Canopy under the offer, which would create a company with six facilities licensed to produce medical marijuana products.
Canopy’s offer values Mettrum shares at $8.42 – $2.50 above the closing stock price Wednesday.
OBJ360 (Sponsored)
Giving Guide: Royal Canadian Naval Benevolent Fund
What we do The Royal Canadian Naval Benevolent Fund (RCNBF) stands as a beacon of support within the naval community. Over 82 remarkable years, the RCNBF earned the trust of
Giving Guide: Senators Community Foundation
What we do At the Senators Community Foundation, we share a deep love for our team and our city. Hockey isn’t just about any one of us—it’s about all of
Assuming the deal gets shareholder approvals at both companies, Mettrum will become a wholly owned subsidiary of Canopy and Mettrum shareholders will own about 22.3 per cent of the combined company.
Mettrum’s board has agreed to pay Canopy a $10-million termination fee under certain circumstances if the deal doesn’t go through. Canopy will also have the right to match a superior proposal from a rival buyer.
Canopy has grown into Canada’s largest publicly traded cannabis company since the federal government revised the rules for producing and distributing marijuana for medical purposes. It’s also is poised to sell so-called “lifestyle” or “recreational” pot if the federal government moves to a legalize marijuana for non-medical use.
“Mettrum has established a line of cannabis products that work well in a medical context and will transition naturally into a natural and healthy lifestyle market,” Canopy chairman and CEO Bruce Linton said in a statement Thursday.
The deal for Mettrum is Canopy’s second acquisition this week.
On Monday, Canopy announced a deal to buy pharmaceutical distributor MedCann, which has placed the Canadian marijuana company’s Tweed-branded cannabis strains in German pharmacies.
In a separate announcement, Mettrum said it plans to voluntarily add a small number of product lots to a voluntary recall announced on Nov. 1. It says some of the products were exposed to a plant spray with an undisclosed ingredient, a natural pesticide that Mettrum says has no impact on human health.
