Canopy Growth To Acquire Medical Cannabis Firm Mettrum For C$430 Mln

(RTTNews) - Canopy Growth Corp. (CGC.TO), a diversified cannabis company, on Thursday said it has entered into a definitive arrangement agreement to buy Mettrum Health Corp., a licensed producer of medical cannabis.

The total transaction is valued at approximately C$430 million and will be satisfied by the issuance of common shares in Canopy Growth. Under the deal terms, Mettrum shareholders will be entitled to receive 0.7132 common shares of Canopy Growth for each common share of Mettrum. This represents consideration of C$8.42 per Mettrum common share based on Wednesday's closing price.

Closing remains subject to approval of the shareholders of both Canopy Growth and Mettrum, court approval, and other customary approvals.

Existing Canopy Growth and Mettrum shareholders are expected to own approximately 77.7% and 22.3%, respectively, of the pro forma company.

Upon closing of the deal, Mettrum will become a wholly-owned subsidiary of Canopy Growth.

The acquisition would create a diversified cannabis company with six licensed facilities, and a licensed production footprint of approximately 665,000 sq. ft., with significant acreage for expansion.

Separately, Mettrum said it plans to voluntarily add a small number of additional product lots to the scope of its existing Type III voluntary withdrawal.

A voluntary Type III recall is defined by Health Canada as a situation in which the use of, or exposure to, a product is not likely to cause any adverse health consequences.

Mettrum said it would like to re-affirm a statement made in the November 1, 2016 release that the financial impact on the Company is expected to be non-material to its fiscal 2017 results.

In its statement, Canopy Growth said it is confident that Mettrum's response to the events that led to the recall will result in operational practices that will advance the quality and standards of the production of cannabis at Mettrum's facilities.

Mettrum will continue to lead site activities with Health Canada as it fulfills its obligations for products affected by the previously announced Type III recall.