Aurora Cannabis said Wednesday it is acquiring privately-held Reliva in an all stock deal worth $40 million in order to gain entry to the U.S. cannabinoid markets.
Canadian-based Aurora said the deal should be “immediately accretive to Aurora on an adjusted EBITDA basis.”
The transaction is expected to close in June.
The move comes just days after Aurora completed a 1-for-12 reverse stock split to avoid being delisted on the New York Stock Exchange.
“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 in a statement.
The move will facilitate Aurora’s “entry into the U.S. market and we firmly believe that the combination with Reliva will create significant long-term value,” Singer said in the statement.
Aurora offers recreational and medical cannabis products in Canada, and medical marijuana products in Europe. Reliva offers hemp-derived CBD products in U.S. retail stores.
Shares of Aurora rose $3.25, or 25%, to $16 in after-hours trading.
Cowen served as 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.
Elsewhere, cannabis stocks were mixed Wednesday.
Among notable cannabis stocks, five rose while nine fell.
Among ETF's, the Alternative Harvest ETF rose 4 cents, or 0.32%, to $12.70, the AdvisorShares Pure Cannabis ETF rose 12 cents, or 1.23%, to $9.87 and the Horizon Marijuana Life Sciences ETF traded flat at $5.01.