공고 • Feb 24
Canopy Growth Corporation (TSX:WEED) completed the acquisition of an interest in TerrAscend, Tweed Tree Lot, and Vert Mirabel from Canopy Rivers Inc. (TSX:RIV).
Canopy Growth Corporation (TSX:WEED) entered into a non-binding term sheet to acquire an interest in TerrAscend, Tweed Tree Lot, and Vert Mirabel from Canopy Rivers Inc. (TSX:RIV) for approximately CAD 240 million on November 20, 2020. Canopy Growth Corporation entered into a definitive agreement to acquire an interest in TerrAscend, Tweed Tree Lot, and Vert Mirabel from Canopy Rivers Inc. (TSX:RIV) for approximately CAD 240 million on December 21, 2020. Canopy Growth will pay CAD 115 million in cash and will issue 3.65 million common shares and the cancellation of all 36.468318 million Multiple Voting Shares and 15.223938 million Subordinate Voting Shares of Rivers held by Canopy Growth. Under the agreement, Canopy Growth will receive 19.445285 million exchangeable shares of TerrAscend owned by Canopy Rivers Corporation will be transferred to Canopy Growth in exchange for (a) the issuance by Canopy Growth of a promissory note to CRC in the amount of CAD 57.523069 million (the “CGC Note”); (b) CAD 64.306740 million in cash; and (c) 3,410,437.08 Canopy Growth Shares, a loan in the principal amount of CAD 13.243 million owed by TerrAscend Canada to Canopy Rivers Corporation, warrants to purchase 2.2 million common shares in the capital of TerrAscend at an exercise price of CAD 5.95 per share, warrants to purchase 3.3 million common shares in the capital of TerrAscend at an exercise price of CAD 6.49 per share exercisable upon the federal legalization of cannabis in the U.S, the TerrAscend I warrants held by CRC will be transferred to Canopy Growth in exchange for 99,122 Canopy Growth shares; (v) the TerrAscend II warrants held by CRC will be transferred to Canopy Growth in exchange for 13,558 Canopy Growth shares, its 260 common share interest in Les Serres Vert Cannabis and its 15 million Class A preference shares in the capital of Vert Mirabel. In connection with the transaction, the Tweed NB agreement will be terminated in consideration for CAD 15 million. Canopy Growth is acquiring the TerrAscend Securities for investment purposes only. Except as permitted by the Trademark License, Canopy Rivers has not assigned its rights or obligations pursuant to the Trademark License. Canopy Growth will be increasing its direct conditional ownership to 21% from 13% and it will also bringing its stake to about 67% from roughly 41% in Vert Mirabel. Canopy Rivers will change its name to reflect the split from Canopy Growth to RIV Capital Inc. or such other name that does not include the word "Canopy". The name change is subject to certain regulatory approvals, including acceptance by TSC and Directors under OBCA. Canopy Rivers may de-list from the TSX following completion of the arrangement and list its securities on a stock exchange that permits such activities. Canopy Rivers is also in the process of seeking new directors to replace the two outgoing nominees of Canopy Growth following the completion of transaction.
The transaction will proceed by way of a court-approved plan of arrangement under the Business Corporations Act. Rivers will convene a special meeting of shareholders in early 2021 to approve the transaction. The transaction will require approval of at least (a) 66% of the votes cast by both: (i) Canopy Growth as the holder of all of the MVS; (ii) Rivers shareholders that hold SVS and (iii) a simple majority of the votes cast on the resolution by the holders of SVS present in person or represented by proxy at the meeting, excluding for purposes of (iii) above, the votes attached to SVS held. Completion of the transaction is also subject to other customary approvals and conditions, including approval from Ontario Superior Court of Justice, TSX and Nasdaq, shareholders shall not have exercised Dissent Rights or have instituted proceedings to exercise Dissent Rights, in connection with the transaction, other than 7.5% of shareholders; the Directors of Canopy Rivers nominated by Canopy Growth shall have resigned, the TSX Listing Approval and NASDAQ Listing Approval shall have each been obtained, subject only to the filing of documentation that cannot be filed prior to the effective date such that the Canopy Growth shares issuable pursuant to the Arrangement shall be listed and posted for trading on the TSX and Nasdaq immediately following the effective time in accordance with TSX policies. Other than the VM ROFR, the VM consent and the TerrAscend consent, no consents, approvals of or notices to any third party are required to be made by Canopy Rivers in order for Canopy Rivers to proceed with the execution and delivery of this agreement. The Board of Canopy Growth or TerrAscend, unanimously approved the arrangement following a unanimous recommendation of the special committee and after receiving legal and financial advice, including the formal valuation and fairness opinions. The members of Board of Directors of Canopy Rivers entitled to vote unanimously recommend the shareholders to vote in favor of the transaction. JW Asset Management, LLC, on behalf of certain funds managed by it, and all of the directors and executive officers of Canopy Rivers have entered into voting and support agreements pursuant to which they have agreed to vote all of their respective subordinated voting shares in the capital of Canopy Rivers in favor of the transaction. As of January 14, 2021, transaction was granted an interim order by the Ontario Superior Court of Justice (Commercial List) (the "Court") authorizing various matters, including the holding of the meeting and the mailing of the circular. As of February 16, 2021, the shareholders approved the plan of arrangement. As of February 18, 2021, transaction was granted an approval by the Ontario Superior Court of Justice for the plan of arrangement. Assuming the satisfaction or waiver of these closing conditions, the Arrangement is expected to be completed on or about February 23, 2021.
The transaction is expected to close in the first quarter of calendar year 2021. Eight Capital Corp. acted as a financial advisor and provided fairness opinion provider to Canopy Growth and Special Committee. Echelon Wealth Partners Inc. also provided fairness opinion to special committee. Derek D. Ricci, Aaron Atkinson and Zain Rizvi of Davies Ward Phillips & Vineberg LLP acted as a legal advisor to the special committee of Canopy Rivers Inc. Shane McLean of LaBarge Weinstein LLP acted as legal advisor to Canopy Growth. Kingsdale Advisors acted as proxy solicitor and strategic shareholder advisor to Canopy Rivers. Echelon Wealth Partners Inc. acted as fairness opinion provider to Canopy Rivers. John Picone of CASSELS BROCK & BLACKWELL acted as legal advisor to Canopy Growth.
Canopy Growth Corporation (TSX:WEED) completed the acquisition of an interest in TerrAscend, Tweed Tree Lot, and Vert Mirabel from Canopy Rivers Inc. (TSX:RIV) on February 23, 2021.
