Full Press Release Details
Aurora Cannabis to Strategically Enter
the United States with Acquisition of Reliva, LLC A Market Leading Mass Retail CBD Platform
All Share Transaction
- Immediately Accretive to Shareholders on an Adjusted EBITDA Basis
Profitable Today, Reliva
Adds Strategic Entry to the U.S. that is Aligned to Aurora's Business Transformation Plan
Adds Miguel Martin, Veteran
International Consumer Packaged Goods Executive to Aurora Management Team
Reliva Provides Aurora
with Top Ranked Retail Hemp-Derived CBD Brand Currently Sold in Over 20,000 Mass Retail U.S. Locations
20, 2020 /CNW/ - Aurora Cannabis Inc. (the "Company" or "Aurora") (NYSE | TSX: ACB), the Canadian
company defining the future of cannabinoids worldwide, and Reliva, LLC ("Reliva") a leader in the sale of hemp-derived
CBD products in the United States, are pleased to announce that they have entered into an agreement pursuant to which Aurora
will acquire all of the issued and outstanding membership interests of Reliva. Under the terms of the agreement, members of Reliva
will receive approximately US$40 million of Aurora common shares. The transaction also includes a potential earn-out of
up to a maximum of US$45 million payable in Aurora shares, cash or a combination thereof, over the next two years contingent upon
Reliva achieving certain financial targets. The structure of the earn-out is designed to align risk and reward between Aurora
shareholders and Reliva management to focus on continued strong operational and financial execution. The transaction is expected
to close, subject to customary closing conditions, in June 2020. It is anticipated that the transaction will be immediately accretive
to Aurora on an Adjusted EBITDA basis, consistent with Aurora's objective to drive towards Adjusted EBITDA profitability in its
fiscal first quarter of 2021.
will combine Aurora's leading Canadian recreational brands, and Canadian and European medical market position with the leading
U.S. hemp-derived CBD brand in retail stores. Consistent with the announcement of Aurora's business transformation plan in February
2020, the Company has aligned its U.S. investment strategy with the goals of the transformation plan, namely: financial discipline,
operational focus, and strong execution. The transaction represents the culmination of a multi-month strategic evaluation of the
U.S. hemp-derived CBD industry. Reliva stood out among a lengthy list of potential partners for its: (1) focus on regulatory,
testing and compliance protocols; (2) proven management team with extensive experience selling and marketing regulated consumer
packaged goods; (3) deep relationships with critical trade partners that provide a U.S. national distribution footprint; and (4)
financial discipline and track record of growth and profitability. Together with Reliva, Aurora is expected to be positioned as
a meaningful player in the United States, the world's largest cannabinoid market.
Aurora and Reliva will partner to create an international cannabinoid leader that we believe can deliver robust revenue and profitable
growth," said Michael Singer, Executive Chairman and Interim CEO of Aurora. "We have taken the time necessary to carefully
assess the Company's entry into the U.S. market and we firmly believe that the combination with Reliva will create significant
long-term value as Reliva provides us options to grow in hemp-derived CBD internationally. Similar to Aurora, Reliva has a strong
entrepreneurial spirit and successful track record of transforming categories and creating growth brands. We welcome Miguel Martin
and his team to Aurora, and look forward to the opportunity to increase our operating scale, international reach, and product
and brand diversity as we drive to Adjusted EBITDA profitability. We plan to capitalize on each company's market leadership and
sales infrastructure to drive higher revenue growth than either company could independently accomplish."
CEO of Reliva commented, "We're excited to join Aurora's leading platform as we combine our highly complementary businesses
and brands to build an even stronger company for future international success. We were fortunate enough to be able to choose our
long-term partner and believe this partnership provides a significant opportunity to accelerate sales growth for Reliva in the
United States and internationally. I am particularly pleased about the benefits that this combination will have for current and
future trade partners. With the assistance of Aurora, we believe enhancements to Reliva's innovation, consumer insights and marketing
systems will allow our portfolio of hemp-derived CBD products to become even more attractive to retailers and consumers in this
exciting new category."
and Financial Highlights:
will create a large and diversified pure-play international cannabinoid company. Aurora believes the combination will provide
the following strategic and financial benefits:
Immediately Accretive
to Aurora Shareholders: Transaction is aligned with Aurora's business transformation plan announced in February 2020 and provides
immediate benefit to Aurora's objective to achieve Adjusted EBITDA profitability in the first quarter of fiscal 2021
Reliva has generated positive
EBITDA in the last 12 months ended March 2020
Transaction is expected
to be Adjusted EBITDA accretive to Aurora shareholders in fiscal 2020 and fiscal 2021
capital expenditures or additional working capital investment is currently required
Addition of Experienced
Management Team: The transaction will add a talented U.S. management team, with strong international consumer packaged goods
backgrounds and a proven track record of growth, to the core Aurora team
Management has 40+ years
of experience in sales and marketing of regulated consumer packaged goods led by Miguel Martin, a 25 year CPG veteran
Former President and General
Manager of Logic Technology, one of the largest manufacturers of electronic cigarettes
Former Senior Vice President
and General Manager of Altria Sales & Distribution
Upon closing of the transaction,
Reliva's management team will remain in place with Miguel Martin continuing on as President of Aurora USA, and joining the Executive
Leadership Team of Aurora, reflecting his commitment and belief in the future success of the combined company
culture is deeply rooted in operating in highly regulated industries and producing and marketing products with high degree of
testing and compliance
Creation of the Leading
Global Cannabinoid Platform: The combined company will have a leadership position in the global medical and Canadian recreational
cannabis markets along with a leading market position in hemp-derived CBD in the U.S.
CBD opportunity expected
to be as large as US$24 billion at retail in 2025, according to the Brightfield Group
Reliva ranked #1 in topicals
and #2 overall market share according to IRI with product availability in over 20,000 retail locations and via e-commerce
Creates opportunity to
leverage Reliva's leading U.S. brand position into international markets
Only CBD company in the
three largest U.S. wholesale distributors
Contracts with leading
retailers including 8 of the top 20 national convenience store chains
Positions Reliva at the
forefront of the growing sports category supporting Aurora's UFC partnership
assets afforded to Aurora through the UFC partnership may eventually support awareness of Aurora/Reliva CBD products
Combines Aurora's best-in-class
scientific and product innovation expertise with Reliva's nation-wide distribution footprint and speed to market experience:
Portfolio of high quality,
rigorously tested and compliant hemp-derived CBD product formats
Leverage Aurora's existing
scientific expertise to further advance cannabinoid product innovation
Cowen served as exclusive financial advisor
and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal counsel to Aurora. Saul Ewing Arnstein & Lehr LLP acted
as legal counsel to Reliva.
Aurora is a global leader in the cannabis industry
serving both the medical and consumer markets. Headquartered in Edmonton, Alberta, Aurora is a pioneer in global cannabis dedicated
to helping people improve their lives. The Company's brand portfolio includes Aurora, Aurora Drift, San Rafael '71, Daily Special,
AltaVie, MedReleaf, CanniMed, Whistler, and ROAR Sports. Providing customers with innovative, high-quality cannabis products, Aurora's
brands continue to break through as industry leaders in the medical, performance, wellness and recreational markets wherever they