| Aurora Cannabis Inc. (the “Company” or “Aurora”) (NASDAQ: ACB) (TSX: ACB), the Canadian company defining the future of cannabinoids worldwide, is pleased to announce today that the Company has reached an agreement to acquire all of the issued and outstanding shares of TerraFarma Inc. (parent company of Thrive Cannabis) (“Thrive”) (the “Transaction”). The Transaction is based upon aggregate consideration of $38 million (the “Initial Consideration”) payable in cash and Aurora common shares (“Aurora Shares”), plus two earnout amounts (the “Earnout Consideration”) payable in Aurora Shares or cash (at the election of Aurora), if applicable, based on Thrive achieving certain revenue targets within two years of closing of the Transaction. The Transaction is expected to strategically strengthen Aurora’s position in the Canadian market by placing the Thrive team in charge of Aurora’s Canadian recreational portfolio, advancing the shift in focus to innovative premium products including dried flower, pre-rolls, vapour products, and concentrates. The Transaction is expected to close, subject to customary closing conditions, in Aurora’s fiscal Q4 2022. It is anticipated that the Transaction will provide immediate positive Adjusted EBITDA to Aurora, and support the Company’s path to Adjusted EBITDA profitability in the first half of fiscal 2023. Founded in 2018, Thrive is a licensed producer of super-premium cannabis concentrates and craft dried flower, and leverages innovative cultivation and extraction techniques with a singular focus on achieving the highest quality standards. Thrive is most widely known for its award-winning flagship recreational brand, Greybeard Cannabis Co. (“Greybeard”), which amongst other accolades was recognized as the #1 brand recommended by Canadian budtenders in 2021, and was the 2021 winner of Best Concentrate from the Kind Magazine Awards, as voted for by budtenders. |
| Management Commentary “As consolidation among licensed producers accelerates, it’s vital that any transactions we make, now or in the future, be strategic, accretive, and centred around adding exceptional talent and brands that align with our path to profitability,” said Miguel Martin, Chief Executive Officer of Aurora. “In these respects, Geoff and the Thrive team have a track record seldom found elsewhere in the Canadian market. They are truly exceptional cultivators who have gained trust with consumers and developed products that have been recognized and acclaimed by Canadian budtenders and industry peers. We see a unique opportunity to leverage their expertise to deliver near and long-term benefits for both our recreational and medical markets,” he continued. “This transaction supports our path to profitability while ensuring that we are strategic in our M&A activity. Thrive’s achievement of positive standalone EBITDA, combined with their exceptional operational and brand capabilities, truly set them apart, and we look forward to leveraging their expertise as we embark together on Aurora’s path to profitability,” he concluded. “We are excited to be joining a team that shares our vision for delivering the highest quality, premium cannabis products to consumers in a way that generates sustainable profitability,” said Geoff Hoover, Chief Executive Officer of Thrive. “We look forward to combining our best-in-class products and innovation pipeline with Aurora’s depth of operational capabilities, robust route to market and shared focus on superior science and genetics that is critical for advancement in this sector. This combining of two great companies will be transformative.” Strategic Rationale Supports Aurora’s Timeline to Profitability with Positive and Growing EBITDA: Transaction is aligned with Aurora’s plan to achieve profitability in H1/FY23 on an Adjusted EBITDA basis. Thrive has achieved positive standalone EBITDA in the last 12 months ended December 2021, with additional cost synergies expected to drive further EBITDA growth. Acquisition of Two Leading Cannabis Brands Synonymous with Quality & Consistency: Thrive adds two new brands to Aurora’s portfolio, both of which have rapidly gained market share over the last twelve months and are expected to flourish with additional resources on Aurora’s platform: Greybeard is an ultra-premium, high-terpene, high-potency brand with a world class lineup of concentrates that has quickly developed recognition with budtenders and cannabis connoisseurs. Concentrates are produced using a proprietary hydrocarbon extraction and refining process that maximizes the cannabinoids and terpene content, resulting in aromatic and flavourful products that highlight the unique characteristics of each strain. Greybeard also utilizes industry leading cultivation practices to offer super-premium, small batch, AAAA quality dry flower and pre-rolls, featuring large pristine buds grown in its indoor facilities. Being Cannabis is a wellness-oriented brand known for their sublingual THC and CBD strips. These fast-acting and precisely dosed sublingual strips dissolve under the tongue and don’t require any accessories or preparation. Addition of Highly Experienced Management Team with Leading Operational and Cultivation Expertise: Transaction will add a talented management team comprised of industry veterans with leading cannabis cultivation, extraction, and product development expertise. The Thrive team leading Aurora’s Canadian recreational business will drive significant improvements to the consistency, quality, and yield of Aurora’s cannabis products across the portfolio. Robust Product Pipeline Led by Expansive Genetics Library: Thrive brings a genetics library that has consistently delivered 24%+ THC potency, high yielding (80g+ / plant) and disease-resistant cultivars. These new cultivars, along with various SKUs in the development pipeline for Greybeard and Being, will deliver innovative and on-trend products to Canadian consumers. |
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