Hexo Corp. will try to boost its market share with a $50-million deal to buy 48North Cannabis Corp.<\/p>\n<\/p>\n
Ottawa-based Hexo said Monday that purchasing Toronto-based 48North will bring the company closer to its goal of achieving a top two position in Canada for adult-use cannabis sales.<\/p>\n<\/p>\n
“48North\u2019s innovative product portfolio complements Hexo’s existing brands which, combined with their additional market penetration, will further strengthen Hexo\u2019s position in the Canadian market,” Sebastien St-Louis, Hexo’s chief executive and co-founder, said in a release.<\/p>\n<\/p>\n
Within one year of closing, he estimates the deal could generate up to $12 million worth of accretive synergies through reductions, additional capacity utilization at Hexo’s Belleville facility and selling, general and administrative savings.<\/p>\n<\/p>\n
St-Louis also believes the deal will help Hexo edge closer to reporting positive earnings and position the company to keep growing domestically and internationally.<\/p>\n<\/p>\n
Like many other Canadian cannabis companies, acquisitions have become a cornerstone in Hexo’s growth plan. It announced it would buy pot company Zenabis Global Inc. for $235 million in February.<\/p>\n<\/p>\n
Meanwhile, Tilray Inc. and Aphria Inc. merged, Canopy Growth Corp. snatched up Supreme Cannabis and Ace Valley Cannabis and Sundial Growers Inc. said it will buy Inner Spirit Holdings Ltd.<\/p>\n<\/p>\n
48North announced in March that it would lay off about 20 per cent of its staff and end outdoor cultivation at an Ontario facility.<\/p>\n<\/p>\n
The company had been able to cultivate 12,000 kilograms at a cost of 25 cents per gram outdoors at its Good Farm location, while typical growers often spend $2 per gram on indoor cultivation.<\/p>\n<\/p>\n
Under the deal, shareholders will receive 0.02366 of a Hexo common share for each 48North common share.<\/p>\n<\/p>\n
It also “contemplates” Hexo providing 48North with a $5-million subordinated secured bridge loan with a six-month term to fund 48North\u2019s short-term working capital requirements and includes a $2-million fee 48North will have to pay Hexo if the deal is terminated.<\/p>\n<\/p>\n
The deal has been unanimously approved by both company’s boards, but still needs the approval by a two-thirds majority vote by 48North shareholders.<\/p>\n<\/p>\n
This report by The Canadian Press was first published May 17, 2021.<\/p>\n<\/p>\n
Companies in this story: (TSX:HEXO, TSX:ZENA)<\/p>\n<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Hexo Corp. will try to boost its market share with a $50-million deal to buy 48North Cannabis Corp. Ottawa-based Hexo said Monday that purchasing Toronto-based 48North will bring the company closer to its goal of achieving a top two position in Canada for adult-use cannabis sales. “48North\u2019s innovative product portfolio complements Hexo’s existing brands which, […]<\/p>\n","protected":false},"author":522,"featured_media":1622,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"guid":"","source":"The Canadian Press","byline":"Tara Deschamps","published":"2021-05-17T00:36:08","updated":"","_infotelid":"CP2080108610","_prepressid":"","_multisite_post_sync":"","_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[383,2,381],"tags":[],"region":[309,310,311,312],"class_list":["post-323","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-in420","category-topnews","region-kamloops","region-kelowna","region-penticton","region-vernon"],"blocksy_meta":[],"parsely":{"version":"1.1.0","canonical_url":"https:\/\/infonews.ca\/in420\/news\/323\/hexo-to-buy-48north-in-deal-valued-at-50-million\/","smart_links":{"inbound":0,"outbound":0},"traffic_boost_suggestions_count":0,"meta":{"@context":"https:\/\/schema.org","@type":"NewsArticle","headline":"Hexo to buy 48North in deal valued at $50 million","url":"http:\/\/infonews.ca\/in420\/news\/323\/hexo-to-buy-48north-in-deal-valued-at-50-million\/","mainEntityOfPage":{"@type":"WebPage","@id":"http:\/\/infonews.ca\/in420\/news\/323\/hexo-to-buy-48north-in-deal-valued-at-50-million\/"},"thumbnailUrl":"https:\/\/infonews.ca\/in420\/wp-content\/uploads\/sites\/3\/20210517090512-60a26c3bb7f209342d90b4ffjpeg.jpg?w=150&h=150&crop=1","image":{"@type":"ImageObject","url":"https:\/\/infonews.ca\/in420\/wp-content\/uploads\/sites\/3\/20210517090512-60a26c3bb7f209342d90b4ffjpeg.jpg"},"articleSection":"business","author":[{"@type":"Person","name":"The Canadian Press"}],"creator":["The Canadian Press"],"publisher":{"@type":"Organization","name":"iN420","logo":""},"keywords":[],"dateCreated":"2021-05-17T07:36:08Z","datePublished":"2021-05-17T07:36:08Z","dateModified":"2021-05-17T14:36:08Z"},"rendered":"