Aurora Cannabis acquires controlling interest in Bevo Farms
by CM Staff
Concurrent with closing of the Bevo Transaction, Bevo entered into an agreement to acquire the Company's Aurora Sky facility in Edmonton, Alberta.
EDMONTON — Aurora Cannabis Inc. announces that a wholly-owned subsidiary of the Company has acquired a controlling interest in Bevo Agtech Inc., the sole parent of Bevo Farms Ltd., a supplier of propagated vegetables and ornamental plants in North America. Concurrent with closing of the Bevo Transaction, Bevo entered into an agreement to acquire the Company’s Aurora Sky facility in Edmonton, Alberta through the acquisition of one of Aurora’s wholly-owned subsidiaries.
The Transaction allows Aurora to immediately benefit from a cash flow positive and growing business, and may have the potential to drive long term value to Aurora’s existing cannabis business via the application of Bevo’s plant propagation expertise. Aurora, through its wholly-owned subsidiary, will acquire 50.1% of Bevo’s outstanding common shares, take a controlling position on Bevo’s board of directors and financially consolidate Bevo. Bevo’s management team are to remain significant shareholders and stay in place to embark on a growth plan, including the use of the Aurora Sky facility for orchid cultivation and vegetable propagation.
For the twelve months ended June 30, 2022, Bevo has achieved revenues of $39 million and Adjusted EBITDA of $9 million (excluding non-recurring rental revenue). Bevo’s business exhibits seasonality driven by agricultural grow cycles, with the strongest financial period being from January to June.
“This investment once again demonstrates our disciplined capital allocation approach and is consistent with both our short term needs and long-term vision to be the leading global cannabis company. Bevo’s track record in generating not only positive Adjusted EBITDA but free cash flow, world class propagation expertise, and established distribution networks in Canada and the United States makes them an ideal strategic partner,” said Miguel Martin, Chief Executive Officer of Aurora. “We expect this investment and collaboration between industry leaders will drive significant shareholder value and synergies for both parties. We are also excited about Bevo repurposing Aurora Sky and the potential to expand the scale and scope of their business and saving significant costs previously expected in connection with the wind down and sale of the facility”.
Total cash consideration paid by a subsidiary of Aurora on closing was approximately $45 million.
