The Ottawa-based Hexo Corp announced a deal to buy cannabis producer Redecan for $925 million in a bid to become Canada’s top recreational cannabis seller.
ebastien St-Louis, the CEO and Co-founder of HEXO said “We articulated a plan to become a top three cannabis player in the Canadian adult-use market.”
St-Louis further added “With today’s announcement, we believe that we are on the verge of surpassing that objective to become the no.1 licensed producer by recreational market share. Building on our strong market momentum, the combination of HEXO and Redecan reinforces our position as an industry leader and creates a robust foundation for growth, efficiency at scale and improved financial results.”
“The Canadian adult-use industry continues to evolve at a rapid pace, and we are at the forefront of that change,” St-Louis said, adding that “With the addition of Redecan, we intend to leverage our combined expertise in product development, manufacturing and branding in Canada. We will also be able to provide consumers across Canada with a diverse and innovative range of high-quality products, with an enhanced brand offering that will enable us to better compete against other LPs in Canada, while positioning the company for future expansion in the United States.”
Under the terms of the Share Purchase Agreement, HEXO will pay the shareholders of Redecan $400 million of the consideration due on closing and $525 million of consideration due on closing through the issuance of HEXO common shares (the “Consideration Shares”) at an implied price per share of $7.53.