In a stock and cash transaction, licensed marijuana producer Aphria Inc. will be buying Broken Coast Cannabis for $230 million.
Broken Coast Cannabis is a cannabis producer based in Vancouver Island, Canada that operates an indoor cannabis production facility.
Per the agreement, Aphria will pay up to $10 million in cash with the remainder in shares based on a deemed price of $15.09 per share.
Aphria chief executive Vic Neufeld in a statement, “Adding one of Canada’s most sought after premium brands represents a major triumph for Aphria and our shareholders and firmly establishes our position as a Canadian leader in premium indoor cannabis production.”
Shares of Aphria soared 20% after the news broke on Wall Street.
Shares of Aphria surged 20 per cent after the deal was announced, adding $3.68 on Monday to hit $21.70 on the TSX.
Per the transaction, Aphria has also approved a further expansion project that is expected to increase the facility’s annual capacity to 10,500 kilograms per year.
Roberto Bresciani, director and co-founder of Broken Coast, stated, “While we are joining a talented large-scale greenhouse operator, Broken Coast will retain a high level of independence and our existing management and production teams will continue to drive our corporate strategy.”
The deal is expected to close by the end of January.