Aurora Cannabis (ACB - Get Report) shares were rising 4.5% in trading Tuesday after the cannabis company announced it entered into a binding agreement to acquire the 48% stake of hemp product manufacturer Hempco that it doesn't already own.
Aurora will pay C$1.04 per Hempco share payable in Aurora shares at a deemed value of C$12.01 per Aurora share. The total deal is valued at C$63.4 million.
"This transaction will enable us to fully integrate Hempco and its new Nisku processing facility into Aurora's global hemp operations including Agropro, Borela and ICC," said Terry Booth, CEO of Aurora. "Our goal is to strengthen our CBD-from-hemp supply chain as well as our hemp business of hemp-based superfoods, nutraceuticals and fibers.
Hempco has been a partner of Aurora since 2017, providing the company with the company with hemp-based products.
"The assets, capabilities, networks and resources that Aurora can mobilize to drive and accelerate growth once Hempco is fully integrated will, we believe, result in significant long-term value for Hempco shareholders, and consequently our board recommends this transaction be approved at our upcoming special meeting," said Hempco Chairman Joel Watson.