Canadian cannabis company Hexo announces third deal of 2021, the purchase of Redecan for C$925 million in cash and stock

Canadian cannabis company Hexo Corp. said Friday it has agreed to acquire privately held Redecan for C$925 million ($764.7 million) in cash and stock. Under the terms of the deal, Hexo will pay C$400 million in cash and issue C$525 million in common stock at an implied price of C$7.53, five trading day-period volume-weighted average price (VWAP) of HEXO common shares on the Toronto Stock Exchange. The deal is expected to close in the third quarter and create the leader in the Canadian adult-use market. Redecan is a family-owned business with 30 years of history in the agricultural sector. The deal is the third by Hexo this year. In February, it announced the purchase of Zenabis Global Inc. for C$235 million in stock, and earlier in May, it announced the acquisition of 48North Cannabis Corp. for C$50 million in stock. Shares rose 5% premarket and have gained 77% in the year to date, while the Cannabis ETF has gained 38% and the S&P 500 has gained 11.8%.

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