Curaleaf Wants to Buy Aurora Cannabis for $272 Million. Is Canopy Growth the Next Marijuana Takeover Target?
Cannabis consolidation appears to be accelerating.
Overview
Curaleaf (OTC: CURLF) just made one thing clear: Consolidation is back on the cannabis industry's agenda. The U.S. cannabis giant recently launched an unsolicited $272 million bid to acquire Aurora Cannabis (NASDAQ: ACB), offering $4 per share, a roughly 45% premium to Aurora's 30-day volume-weighted average price.
Curaleaf believes the combined company could generate approximately $1.5 billion in annual revenue, $350 million in adjusted EBITDA, and at least $40 million in annual cost synergies. It's not a bad move, to be sure. But this does beg the question: Could Canopy Growth (NASDAQ: CGC) also become an acquisition target? It's certainly possible, but there are reasons to be cautious.
Details
Unlike Aurora, which has spent the past several years rebuilding its business around international medical cannabis, Canopy is still in the middle of its own turnaround. The company has reduced debt, exited noncore businesses, and shifted its focus toward higher-margin medical cannabis while maintaining strategic exposure to the U.S. market through Canopy USA. It also strengthened its balance sheet earlier this year through a recapitalization that significantly reduced debt.
Source
Originally published at www.fool.com.
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