공시 • Sep 02
HEXO Corp. (TSX:HEXO) completed the acquisition of 48North Cannabis Corp. (TSXV:NRTH) from Canopy Growth Corporation (TSX:WEED), Wallington Investment Holdings Limited and others.
HEXO Corp. (TSX:HEXO) entered into a definitive agreement to acquire 48North Cannabis Corp. (TSXV:NRTH) from Canopy Growth Corporation (TSX:WEED), Wallington Investment Holdings Limited and others for CAD 39.6 million on May 17, 2021. The consideration will be paid in common shares of HEXO wherein each share of 48North will be exchanged for 0.02366 common shares of HEXO. 48North’s outstanding common share purchase warrants will be adjusted in accordance with their terms to ultimately become exercisable to receive common shares of HEXO based on the exchange ratio. Upon completion, existing HEXO and 48North shareholders will hold approximately 96% and 4% of HEXO. The transaction will be completed by way of court-approved plan of arrangement. Additionally, HEXO will provide 48North with a CAD 5 million subordinated bridge loan with a 6-month term within 30 days following signing of the agreement to fund 48North’s short term working capital requirements. In the event the arrangement agreement is terminated by 48North Cannabis, 48North Cannabis shall pay CAD 750,000 to HEXO. In the event the arrangement agreement is terminated by HEXO, HEXO shall pay CAD 750,000 to 48North Cannabis.
The transaction is subject to 48North’s shareholders’ approval, receipt of certain regulatory, court and stock exchange approvals and the satisfaction of customary conditions precedent in transactions of this nature, the aggregate number of 48North Shares held, directly or indirectly, by those holders of such shares who have validly exercised Dissent Rights and not withdrawn such exercise in connection with the Arrangement (or instituted proceedings to exercise Dissent Rights) shall not exceed 5% of the aggregate number of 48North Shares outstanding immediately prior to the Effective Time; the current officers and directors of 48North and each of its Subsidiaries shall have resigned as required by HEXO, each of the Voting Support Agreements shall be in full force and effect and there shall not have occurred any breach of any covenant or agreement or any epresentation or warranty by the parties thereto other than HEXO, all Third-Party Consents shall have been obtained, as well as certain other specified conditions precedent set out in the agreement. The transaction has been unanimously approved by both the Boards of HEXO and 48North. The Board of 48North approved the transaction based on the recommendation of a Special Committee of Independent Directors and they recommend that the shareholders of 48North vote in favour of the transaction. HEXO has entered into voting and support agreements with 48North’s directors and officers with and as a result, in total approximately 25.9% of 48North’s issued and outstanding common shares are subject to signed voting and support agreements with commitments to support and vote in favour of the transaction. The special meeting of the shareholders of 48North will be held on July 22, 2021. A Special Committee of Independent Directors comprised of William Assini, Anne Darche, and James Gervais was formed. On July 14, 2021, 48North obtained an interim order of the Ontario Superior Court of Justice (Commercial List) (the “Court”), which, among other things, authorizes the calling and holding of the Meeting, stipulates the dissent rights granted to the Company Shareholders, and specifies certain other matters relating to the conduct of the Meeting. As of July 21, 2021, HEXO has obtained the conditional approved of the TSX for the listing of such HEXO Shares. As of August 17, 2021, 48North shareholders approved the transaction. The transaction obtained the final court order from the Ontario Supreme Court of Justice on August 26, 2021. The Transaction is expected to close by August 31, 2021 or sooner. As of July 20, 2021, the transaction is expected to close in third quarter of 2021. As of August 26, 2021, the transaction is now expected to complete on or about September 1, 2021. HEXO estimates that, assuming completion of the transaction, it may realize annual synergies of up to CAD 12 million within one year of close, through cost of goods reductions, additional capacity utilization in HEXO’s Belleville Centre of Excellence and selling, general and administrative savings, which, if realized, should allow HEXO to continue its path towards positive earnings.
Echelon Wealth Partners Inc. acted as fairness opinion provider to the Board of Directors of 48North. Cormark Securities Inc acted as financial advisor; and Bennett Jones LLP acted as legal advisor to 48North. Amar Leclair-Ghosh, Rujuta Patel, Gatlin Smeijers, Derek G. Chiasson, Andrew Schafer and Elliot Shapiro of Norton Rose Fulbright Canada LLP acted as legal advisors to HEXO. Computershare Investor Services Inc. acted as transfer agent to 48North Cannabis. Gryphon Advisors Inc acted as proxy solicitation agent to 48North. TSX Trust Company is the depositary bank for 48North shares.
HEXO Corp. (TSX:HEXO) completed the acquisition of 48North Cannabis Corp. (TSXV:NRTH) from Canopy Growth Corporation (TSX:WEED), Wallington Investment Holdings Limited and others on September 1, 2021. 48North shares will be de-listed from the TSX Venture Exchange as of the close of trading on or about September 2, 2021.