HEXO to gobble up Redecan in nearly $1B deal
Published on May 28, 2021 by oz. staff
HEXO plans on buying the country’s biggest private cannabis producer, Redecan, for nearly $1 billion.
The acquisition, announced Friday morning, means the combined company would take the No. 1 market share in the Canadian recreational market, including top spot in four of Canada’s largest markets: Alberta, British Columbia, Quebec and Ontario.
The agreement is worth $925 million payable in cash and through the issuance of common shares of HEXO.
“We articulated a plan to become a top three cannabis player in the Canadian adult-use market,” says HEXO CEO and co-founder Sebastien St-Louis. “With today’s announcement, we believe that we are on the verge of surpassing that objective to become the No. 1 licensed producer by recreational market share.”
“The Canadian adult-use industry continues to evolve at a rapid pace, and we are at the forefront of that change.”
Redecan co-founder Will Montour credited, in part, the company’s highly efficient automated manufacturing technology in establishing a significant presence in the Canadian market. Redecan’s pre-rolls are unmatched.
Meanwhile, HEXO has established its beverage presence through Truss Beverages.
If the deal goes through, Redecan shareholders will collectively hold approximately 31% of HEXO’s issued and outstanding common shares. The transaction requires a simple majority approval of HEXO’s shareholders, and HEXO expects to hold a vote in August.