Aurora Cannabis (NYSE: ACB) announced Wednesday afternoon it will acquire CBD platform Reliva for $40 million in Aurora common shares.
What To Know About The Deal
Aurora Cannabis is a Canadian licensed cannabis producer, headquartered in Edmonton.
The transaction includes a potential earn-out of up to a maximum of $45 million payable in Aurora shares over the next two years contingent upon Reliva achieving financial targets.
The transaction is expected to close in June.
Why It's Important For Aurora Cannabis
This is a chance for Aurora to enter the U.S. market. Reliva is sold in Circle K convenience stores and other retail locations.
"We have taken the time necessary to carefully assess the company's entry into the U.S. market and we firmly believe that the combination with Reliva will create significant long-term value as Reliva provides us options to grow in hemp-derived CBD internationally," said CEO Michael Singer.
“It’s creative and profitable,” Singer told CNBC. “Reliva [also] has access to 20,000 retail locations and even more important strong relationships with the leading wholesalers and distributors in the U.S.”
Aurora Cannabis shares were trading up 26% at $16.08 in Wednesday’s after-hours session.
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