HEXO Corp HEXO HEXO announced Monday the completion of the previously announced $925 million acquisition of Redecan, Canada’s largest privately-owned licensed producer.
At closing, HEXO paid the selling shareholders of Redecan $400 million in cash (subject to certain customary closing adjustments) and delivered 69.7 million newly issued common shares of HEXO.
“This is an exciting day for HEXO and Redecan employees, investors, consumers and stakeholders,” HEXO CEO and co-founder Sebastien St-Louis said. “The completion of this transaction is aligned with our corporate growth strategy and will further strengthen our position as a leader in the Canadian cannabis industry, bolstering the combined company as we look towards becoming a top three global cannabis products company and continue on the path towards positive EPS.”
In connection with the closing of the transaction, HEXO entered into an investor rights agreement with certain Redecan sellers to provide for certain customary governance rights, including limited demand and piggyback registration rights. Furthermore, pursuant to the share purchase agreement entered into in connection with the transaction, the resale of the consideration shares by Redecan sellers will be restricted by a 24-month hold period.
Pursuant to the transaction and terms of the Investor Rights Agreement, Peter James Montour joins the HEXO board of directors, which also includes Emilio Imbriglio, Vincent Chiara, Jason Ewart, Adam Miron, Michael Munzar, Sébastien St-Louis and Rose Marie Gage. Will Montour will act as a non-voting observer on the board of directors until his election to the board in accordance with the Investor Rights Agreement.
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Hexo’s shares were trading 1.23% higher at $2.46 per share during Tuesday's pre-market session.
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