There were 44 transactions in the North American Cannabis sector in December 2018, including 26 private placements, 2 public offerings, 13 mergers & acquisitions and 3 shelf registrations, with a total value of C$0.8 billion. Total deal volume decreased by 20% over December 2017 and transaction value decreased by 43%.
Some of the most significant transactions in the cannabis space included:
On December 19, 2018, Alefia Health, a vertically integrated cannabis company, announced the acquisition of Emblem Corp., a producer, distributor, and vendor of medical cannabis and cannabis derivatives. Combination will create Canada’s largest medical cannabis clinic network with access to 40 medical clinics and education centres. The all-share transaction currently values Emblem’s equity at $173.2 million and with the assumed net debt (debt less cash), the value increases to $226.5 million. Emblme’s shareholders received a 27% premium to the stock’s undisturbed trading price. Upon closing, Aleafia and Emblem shareholders will own approximately 59.0% and 41.0% of Aleafia, respectively.
Calculations include asset purchases and sales, joint ventures and minority and majority shareholdings that disclosed a transaction value and were announced within the time frame. Cannabis industry definition includes cannabis products producers as well as supporting industries such as suppliers, laboratories, and security, among others. Cancelled transactions were excluded. Exchange rates based on historical figures.
Sources: Capital IQ, analyst research.
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