The cannabis company known as Tilray Brands Inc. announced it plans to buy its rival Hexo Corp. in a deal valued at US$56-million.
On Monday, Tilray officials said the company has entered into a "definitive agreement" to amalgamate its Leamington-based facility with Gatineau, Quebec's based Hexo.
Tilray also said it will issue 0.4352 shares of stock for each share of Hexo in the deal that still requires both shareholder and court approval which is expected to conclude in June. Tilray CEO Irwin D. Simon said in a statement that the company looks forward to focussing on being a "leading" and "diversified" cannabis lifestyle company.
"We are incredibly excited about our combined prospects moving forward with Hexo and expect a seamless integration of Hexo’s business into our efficient, built-to-last platform," said Simon. "At the same time, we will continue our relentless focus on cost and operational efficiencies and strengthening our industry-leading balance sheet to deliver sustained, profitable growth and shareholder value."
Hexo chairman Mark Attanasio said that with recent obstacles in the cannabis industry, board members determined its shareholders will benefit from being part of Tilray's business, adding they have a plan in place to strengthen the two brands.
"As we began working with Tilray last year, the value that could be achieved through the combination of our businesses in order to compete and drive profitable growth in the highly fragmented Canadian market was immediately clear," said Attanasio in a statement. "With Irwin and his leadership team, we are confident that our brands will continue to grow and thrive as part of Tilray Brands."
The announcement of the merger comes after Tilray reported a net loss of US$1.2 million during its third fiscal quarter which ended on February 28, compared with a net income of US$52.5 million during the same quarter in 2022.
