Canopy to buy fellow Canadian pot producer Mettrum in $430M all-stock deal
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SMITHS FALLS, Ont. — Marijuana producer Canopy Growth Corp. (TSX:CGC) is offering to buy Mettrum Health Corp. (TSXV:MT) in a friendly all-stock deal valued at $430 million.
Mettrum shareholders will be entitled to receive 0.7132 of a common share of Canopy under the offer, which would create a company with six facilities licensed to produce medical marijuana products.
Canopy's offer values Mettrum shares at $8.42 — $2.50 above the closing stock price Wednesday.
Assuming the deal gets shareholder approvals at both companies, Mettrum will become a wholly owned subsidiary of Canopy and Mettrum shareholders will own about 22.3 per cent of the combined company.
Mettrum's board has agreed to pay Canopy a $10-million termination fee under certain circumstances if the deal doesn't go through. Canopy will also have the right to match a superior proposal from a rival buyer.
Canopy has grown into Canada's largest publicly traded cannabis company since the federal government revised the rules for producing and distributing marijuana for medical purposes. It's also is poised to sell so-called "lifestyle" or "recreational" pot if Ottawa moves to a legalize marijuana for non-medical use.
"Mettrum has established a line of cannabis products that work well in a medical context and will transition naturally into a natural and healthy lifestyle market," Canopy chairman and CEO Bruce Linton said in a statement Thursday.
The deal for Mettrum is Canopy's second acquisition this week.
On Monday, Canopy announced a deal to buy pharmaceutical distributor MedCann, which has placed the Canadian marijuana company's Tweed-branded cannabis strains in German pharmacies.
In a separate announcement, Mettrum said it plans to voluntarily add a small number of product lots to a voluntary recall announced on Nov. 1. It says some of the products were exposed to a plant spray with an undisclosed ingredient — a natural pesticide that Mettrum says has no impact on human health.
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